ARUNA SINGH ,THANE vs. ITO WARD 3(1), KALYAN

आदेश / ORDER

PER ASTHA CHANDRA, JM :

i. Purchase of residential Flat Rs.2,25,73,600/- ii. Purchase & Sales of securities / FO Rs.29,02,68,389/- iii. Rent from Delhi Metro Rail Corporation Rs.2,18,655/- iv. Commission Rs.90,472/- Total Rs.31,31,51,116/-

3.2. As per provisions of section 249(4)(b) of the Act, where no return has been filed by the assessee, the assessee has to pay an amount equal to the amount of advance tax which was payable by him otherwise appeal shall not be admitted. The provisions of section 249 (4) of the Act are reproduced as under – Section 249(4) "No appeal under this Chapter shall be admitted unless at the time of filing of 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: Provided that. 2 in a case falling under clause (b) and) on an application made by the appellant in this behalf, the Deputy Commissioner (Appeals)) or, as the case may be, the Commissioner (Appeals)) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause]] 3.3 As per provisions of section 2348(1), read with provisions of section 208 of the Act, the liability to pay advance tax, in a case where returned income is less than the assessed income, is calculated on the basis of assessed income. The provisions of section 2348(1) and provisions of section 208 of the Act are reproduced below – Section 234B(1) "(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed fax, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year 3 to the date of determination of total income under sub-section (1) of section 1434 and where a regular assessment is made, to the date of such regular assessment, on an amount]] equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. 5 Explanation 1-In this section," assessed tax" means,- (a) for the purposes of computing the interest payable under section 140A, the tax on the total income as declared in the return referred to in that section; (b) in any other case, the tax on the total income determined under sub- section (1) of section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income.] Explanation 2.- Where in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. 5 Explanation 3.- In Explanation 1 and in sub- section (3)," tax on the total income determined under sub- section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143.]" 3.4. Section 208 "208. 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 one thousand five hundred rupees or more." 3.5. The appellant has offered 'Not applicable' comments at sl. No. 9 of Form- 35 and the appellant failed to make payment of amount equal to the advance tax which was due on its income. It is, therefore, clear that information, given at sl. no. 9 of Form-35 is not correct and the appellant has not made payment of amount equal to the advance tax which was due on its income. The appellant has also not requested for exemption from operation of the provisions of clause (b) of sub-section (4) of section 249 of the Act.

4. Since the appellant has not filed return of income as well as not paid an amount equal to the amount of advance tax which was payable by it, present appeal is not liable to be admitted. The appeal is infructuous and is, therefore, dismissed.

“1. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (A) -NFAC Delhi, is not justified in dismissing the appeal solely on the ground of non-payment of advance tax required u/s 249(4)(b) of the Income Act, 1961 even when the provisions of sec 249(4)(b) are not attracted in the facts and circumstances of the case. The appeal before CIT(A) be restored by setting aside his order dt 06/11/2024.

2. Without prejudice to Ground No 1 above, in the facts and circumstances of the case as well as in law, the assessment is bad in law as the assessee was never served any physical notice during assessment proceedings. The assessee was not aware about the notices that were uploaded on the ITBA Portal. Thus, the principles of natural justice not being followed, the assessment order dt 19/12/2023 be set aside and restored to the file of AO for de novo assessment. The appellant craves leave to add, alter, omit or substitute any of the grounds at the time of hearing of the appeal.”

5. The Ld. AR submitted that the assessee is a senior citizen and house wife and the husband of the assessee who was looking after the tax matters passed away in September, 2023. The assessee was not aware about the notice(s) of hearing issued by the Ld. AO which was uploaded on ITBA portal. The assessee did not receive any physical notice and the show cause notice(s) sent via speed post were returned by the Postal Authorities with remark “Addressee Moved”. The SCNs were sent on the incorrect address inspite of the fact that the assessee had already communicated change of address to the tax authorities. The new and correct address was properly reflected in Form 26AS and other records of the Department. Owing to the above, the assessee and/or her authorized representative could not attend the hearing during the assessment proceedings. He further submitted that the provisions of section 249(4)(b) of the Act is not applicable to the assessee’s case as the assessee is having income below taxable limit and is therefore not required to file return of income as per the relevant provisions of law. The assessee is not liable to pay any advance tax. He submitted that the Ld. CIT(A) therefore grossly erred in dismissing the appeal of the assessee on the ground of non-payment of advance tax under the provisions of section 249(4)(b) of the Act even without admitting the appeal.

5.1 In support of the contention that the provisions of section 249(4)(b) of the Act are not applicable to the assessee’s case, reliance has been placed by the Ld. AR on the following decisions : i. T Govindappa Setty Vs. ITO (1998) 231 ITR 0892 (Kar) ii. Vishnusharan Chandravanshi iii. Dilip Hirala Chaudhari 5.2 The Ld. AR also relied on the decision of Mumbai Tribunal in the case of Nile Global Industries in wherein it has been held as under : “Here is the case of reassessment which is done for the benefit of Revenue. Hence, in our view, clause (b) of Section 249(4) of the Act will not apply as there is no question of paying advance tax in reassessment proceedings, even though assessee did not file Rol.”

5.3 On merits of the case, the Ld. AR submitted that the addition made by the Ld. AO in respect of the property transaction (i.e. purchase of residential flat) in the hands of the assessee is also not sustainable since the said property was purchased by her son who is a regular tax payer and that the required taxes have already paid in respect of such transaction by her son. The assessee’s son purchased the residential flat at Kanjur-Kurla Mumbai and included name of his mother as second holder. The assessee had not invested anything towards the purchase of the said flat. The said property was purchased by her son by availing housing loan from HDFC initially which was subsequently shifted to State Bank of India.

5.4 As regards, the addition made by the Ld. AO in respect of shares and F & O transactions, the Ld. AR submitted that the Ld. AO has considered the entire sale value as income instead of only capital gain arising out of such transaction(s) which is chargeable to tax under the provisions of section 45 of the Act and not the entire transaction value. He submitted that the assessee has all the relevant documentary evidence in support of her claim. The Ld. AR therefore, prayed that the matter may be set aside to the file of the Ld. AO to decide the above impugned issues afresh on merits after affording due opportunity of hearing to the assessee.

Order pronounced in the open court on 11th April, 2025.