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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश/ O R D E R PER BENCH: These appeals filed by the assessee are directed against seven orders of Commissioner of Income Tax (Appeal), Chennai-18, all dated 11.08.2025, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Years are 2015-16 to 2021-22.
to 2519/Chny/2025 :- 2 -: 2. Common issues are raised in these appeals and they pertains to the same assessee, hence, they were heard together and are being disposed off by a consolidated order.
The assessee has primarily raised two grounds namely ground Nos.2 & 3. Ground No.2 relates to whether the CIT(A) has erred in invoking section 249(4)(b) of the Act and dismissing the appeals in limine by holding that advance tax liability is to be based on the assessed income instead of admitted income. Ground No.3 relates to the issue that the CIT(A) has erred in not condoning the delay in filing the appeals before him despite sufficient cause and reasons stated in the petition for condonation of delay. The other grounds namely Ground Nos.4 & 5 are with regard to the legal issue and on merits with regard to the additions made [the additions on merits were not adjudicated by the CIT(A)].
Firstly, the CIT(A) has dismissed the appeals of the assessee by invoking the provisions of section 249(4)(b) of the Act. The relevant finding of the CIT(A) in the assessment year 2015-16 dismissing the appeals in limine read as follows:- “5.3 Before considering the request to condone the delay in filing of appeals as well as adjudication the case on merits, the appellant has not satisfied the conditions specified u/s 249(4). Section 249(4) lays down a pre-condition for filing an appeal before the Commissioner of Income to 2519/Chny/2025 :- 3 -: Tax (Appeals). As per section 249(4) of the Act, “no appeal under this chapter can be admitted unless at the time of filing the appeal
a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him…”
The clause (a) is not applicable to the appellant as no return has been filed by the appellant either u/s 139 or in response to 153C or 142(1). As per clause (b) if the no return has been filed by the appellant, the appellant has to pay advance tax as per the assessment order before the appeal is admitted. The appellant has not paid the advance tax and the appeals are showing are deficient in ITBA. The appellant has not provided any reasons/evidences to exempt him from the application of this clause (b) before the undersigned. In view of the above, the appeal is not admitted for adjudication.”
The Ld.AR had submitted that advance tax liability of an assessee arises on admitted or undisputed income of the assessee and not on the addition which are disputed by the assessee. The Ld.AR by referring to the provisions of section 208 & 209 of the Act, submitted that the computation and payment of advance tax depend on the estimation of current years income based on latest previous year income assessed or any subsequent year income returned by the assessee whichever is higher. It was contended only on non- payment of advance tax payable as per section 208 & 209 of the Act, the FAA can dismiss the appeals in limine without adjudicating the issues on merits. In support of his contention, the Ld.AR relied on the following judicial pronouncements:- to 2519/Chny/2025 :- 4 -: i. ITAT, Ahmedabad Bench in the case of Laxmanji Khodaji Solanki (Thakor) vs. ITO in (order dated 28.08.2025) ii. ITAT, Raipur Bench in the case of Vishnusharan Chandravanshi vs. ITO in (order dated 10.04.2024) iii. ITAT, Chennai Bench in the case of Perumalpillai Srinivasan vs. ITO in ITA No.3186/CHNY/2024 (order dated 18.03.2025)
The Ld.DR relied on the orders of the CIT(A) on this issue.
We have heard the rival submissions and perused the material available on record. As regards the first issue raised whether the CIT(A) is justified in dismissing the appeals in limine by invoking the provisions of section 249(4)(b) of the Act. We find an identical issue has been considered by the Ahmedabad Bench of the Tribunal in the case of Laxmanji Khodaji Solanki (Thakor), supra. The Ahmedabad Bench of the Tribunal after considering the relevant provisions of the Act held that AO has to calculate advance tax as per the latest previous year income assessed or subsequent year income returned by the assessee whichever is higher. It was further held by the Tribunal that there can be no case at all for advance tax being paid on assessed income (i.e., on addition made to the income in assessment which are all disputed by the assessee). Therefore, advance tax that was payable by assessee is as per the provisions of section 208 & 209 of the Act and not the disputed income. The to 2519/Chny/2025 :- 5 -: relevant finding of the Ahmedabad Bench of the Tribunal in this context read as follows:- “10. Having held so, we have noted that before the AO the assessee remained unheard and the Ld. CIT(A) dismissed assessee’s appeal as non- maintainable on account of the fact that no return of income was filed by the assessee and no advance taxes were paid by the assessee. The Ld. CIT(A), we hold was grossly incorrect in treating the assessee’s appeal nonmaintainable for the aforesaid reasons. Advance tax liability of an assessee arises on admitted and undisputed income of the assessee and not on addition made to the income of the assessee which are disputed by the assessee. The provisions of section 208-211 of the Act deal with conditions, computation and payment of advance tax. And on perusal of the said sections it is abundantly clear that suo moto computation of advance tax liability of assesses is based on estimation of current years income and tax liability thereon and where the AO calculates advance tax liability, the same is based on latest previous year income assessed of the assessee or any subsequent year income returned by the assessee whichever is higher. Section 208 & 209 of the Act are reproduced hereunder for clarity:
Conditions of liability to pay advance tax.
Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is ten thousand rupees or more. Computation of advance tax. 209. (1) The amount of advance tax payable by an assessee in the financial year shall, subject to the provisions of sub-sections (2) and (3), be computed as follows, namely :— (a) where the calculation is made by the assessee for the purposes of payment of advance tax under sub-section (1) or sub-section (2) or sub-section (5) or sub-section (6) of section 210, he shall first estimate his current income and income-tax thereon shall be calculated at the rates in force in the financial year; (b) where the calculation is made by the Assessing Officer for the purpose of making an order under sub-section (3) of section 210, the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment or the total income returned by the assessee in any return of income furnished to 2519/Chny/2025 :- 6 -: by him for any subsequent previous year, whichever is higher, shall be taken and income-tax thereon shall be calculated at the rates in force in the financial year; (c) where the calculation is made by the Assessing Officer for the purpose of making an amended order under sub-section (4) of section 210, the total income declared in the return furnished by the assessee for the later previous year, or, as the case may be, the total income in respect of which the regular assessment, referred to in that sub-section has been made, shall be taken and income- tax thereon shall be calculated at the rates in force in the financial year; (d) the income-tax calculated under clause (a) or clause (b) or clause (c) shall, in each case, be reduced by the amount of income- tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income (as computed before allowing any deductions admissible under this Act) which has been taken into account in computing the current income or, as the case may be, the total income aforesaid; and the amount of income-tax as so reduced shall be the advance tax payable:”
In any case, logically also, the liability relates to payment of taxes in advance (advance tax liability) and the same can be based only on a realistic estimate of income to be earned during the year, which can be gathered on the basis of assesses knowledge of his income earning sources for the year or on the basis of income returned to tax and assessed in preceding years. There can be no case at all for advance tax being paid on assessed income for the year, i.e on additions made to the income in assessment which are all disputed by the assessee.
12. In the light of the same, we hold, that the Ld.CIT(A) was incorrect in law to have dismissed assesses appeal as non- maintainable for not having paid advance taxes on its income, as per section 249(4)(b) of the Act.”
In the instant case, admittedly assessee has not filed the return of income for the relevant assessment years. For the past years, assessee has been a non-filer. The assessee before the AO did not appear and the assessments were completed u/s.144 of the to 2519/Chny/2025 :- 7 -: Act. Before the FAA, the assessee had contested the entire additions made. Therefore, there is no admitted tax liability to be paid by the assessee. Nor, there was advance tax payable as per section 208 & 209 of the Act. Hence, the dismissal of appeal by the CIT(A) in limine for not having paid advance tax on the income assessed instead of advance tax payable by assessee by invoking the provisions of section 249(4)(b) of the Act is not justified in light of the aforesaid judicial pronouncement.
The CIT(A) has also dismissed the appeals of the assessee by not condoning the delay of 869 days in filing the appeals. The delay condonation application filed before the CIT(A) has been extracted at pages 4 & 5 of the impugned order of the CIT(A). The assessee had submitted that he is running a grocery shop and is into small time finance business. It was stated that the assessee being studied only up to 10th standard. It submitted that assessee had received notices under the Benami Transaction (Prohibition) Act, 1988 and out of fear and anxiety went into hiding. It was stated that deponent was completely unaware of the notices being issued and the assessment orders being passed. It is stated that out of fear and lack of understanding of legal and tax matters, the assessment orders were completed ex-parte. The deponent not being well-versed with the Income-tax matters, which further contributed to the unintentional to 2519/Chny/2025 :- 8 -: oversight. It is contended that only on receipt of show-cause notice issued u/s.263 of the Act, the assessee became aware of the original order being passed u/s.153C r.w.s.144 of the Act. The show-cause notice issued u/s.263 of the Act has been forwarded to the present counsel, who advised him to file appeals as against the original assessment orders which had resulted in a delay of 869 days.
The Ld.DR had opposed the condonation of delay.
11. We have heard the rival submissions and perused the material available on record. The assessment order has been passed u/s.144 of the Act. The assessee is not an educated person. There was requisition of money seized amounting to Rs.99.75 lakhs u/s.132A of the Act. The assessee was in receipt of notices under the Benami Transactions (Prohibition) Act, 1988. It is stated that on receipt of said notices, the assessee went into hiding and was completely unaware of the notice issued by the AO during course proceedings u/s.153C r.w.s.144 of the Act. It is submitted that only when show- cause notice is issued u/s.263 of the Act on 13.01.2013, assessee became aware of the original assessment order u/s.153C r.w.s.144 of the Act was passed. It is an admitted fact that assessee had filed response to the proceedings u/s.263 of the Act. After the PCIT had passed order u/s.263, assessee had filed appeals to the ITAT. The to 2519/Chny/2025 :- 9 -: ITAT had quashed the order passed u/s.263 in to 1513/CHNY/2024 (order dated 18.09.2024). After the impugned orders of the PCIT u/s.263 of the Act, assessee became aware and had filed the appeals before the CIT(A) against the original assessment orders. On the facts of the instant case, we are of the view that delay needs to be condoned since assessee is uneducated and is not well-versed in Income-tax matters. Therefore, we condone the delay in filing the appeals before the CIT(A) on a condition, assessee pays a sum of Rs.10,000/- each appeal filed totaling to Rs.70,000/- (Rupees Seventy Thousand only) to be paid to Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras.
The Ld.DR had contended that if the delay in filing the appeals before the CIT(A) is condoned, the matter may be restored to the files of the AO. It was stated by the Ld.DR that the AO had passed an ex-parte order making estimate addition of 8% of the total cash deposit without giving any cogent reasons. It was contended by the Ld.DR, the entire cash credits in the bank account are to be assessed u/s.69A of the Act instead estimation of 8% of total cash deposits made by the AO. to 2519/Chny/2025 :- 10 -: 13. Taking into consideration, the submission of the Ld.DR, we deem it appropriate to remit the matter back to the files of the AO. The assessee is directed to pay the sum of Rs.70,000/- (Rupees Seventy Thousand only) within a month’s time from the date of receipt of this order and produce the receipt before the AO. The AO is directed to examine the entire issues afresh. The AO shall afford a reasonable opportunity of hearing to the assessee. It is ordered accordingly.
In the result, the appeals filed by the assessee are allowed for statistical purposes.