SYED ASIF ALI,LUCKNOW vs. DCIT-1, , LUCKNOW
Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW
Before: SH. KUL BHARAT & SH. NIKHIL CHOUDHARYA.Y. 2021-22
PER NIKHIL CHOUDHARY, A.M.:
This is an appeal filed by the assessee against the orders of the ld. Addl /
JCIT(A), Ahmedabad dated 27.01.2025, wherein the ld. Addl / JCIT has dismissed the appeals of the assessee against the orders of the ld. AO dated 22.07.2022, in limine. The grounds of appeal are as under: -
“1. The Learned Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred to as the "Ld. CIT(A)"] has erred on facts and in law in dismissing the appeal of the appellant without looking into the merit of the case.
The Ld. CIT(A) has erred on facts and in law in confirming the aggregated additions of Rs. 3,04,76,240/-made by the Assessing Authority to the returned income of the assessee while processing the return of income u/s 143(1) of the I.T. Act by grossly ignoring the settled law that the provisions contained u/s 143(1) of the Act does not empower the Assessing Officer to make any addition which is in the nature of debate and discussions and also requires detailed explanations and submissions from the assessee.
The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.2,33,88,200/-made by the Ld. A.O. on the wrong premise that the amount of the contingent liabilities of Rs.2,33,88,200/- disclosed by the Auditors at column 21(g) of their Form 3CD were debited to the Profit and Loss Account of the year under consideration ignoring the fact that it was just a disclosure of the contingent Syed Asif Ali
A.Y. 2021-22
liabilities on the part of the auditors and no such liability was debited to the Profit and Loss Account of the year under consideration.
The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.70,81,346/-made by the Ld. A.O. on the wrong premise that the amount of duty draw-back of Rs.70,81,346/-was not credited to the Profit & Loss Account ignoring the fact that this amount was very much credited to the Profit & Loss Account and it appears that this amount was inadvertently punched by the tax Auditor at column 16(b) of his Tax Audit Report in Form 3CD.
That it appears that the Statutory Auditors / Tax Auditors while finalizing their Tax Audit Report submitted in Form 3CA-3CD, disclosed all the aggregate demand of Rs. 77,58,060/- and Rs. 1,56,30,140/- as contingent liabilities at column 21(g) of Form 3CD with a view to make true disclosure of the facts.
That the CPC, Bangaluru processed the return of income filed by the appellant vide intimation dated 22.07.2022 passed u/s 143(1) of the Act and added the whole amount of the contingent liability of Rs.2,33,88,200/- [ Rs.77,58,060 + Rs.1,56,30,140] to the returned Income on the wrong premise that these Ilabilities were debited to the Profit and Loss Account of the year under consideration whereas the fact is that the whole of contingent liabilities of Rs.2,33,88,200/- pertains to previous years not a single paise of this liability was debited to the Profit and Loss Account of the current year.
Similarly, duty draw-back of Rs.70,81,346/-stood very much credited to the Profit
& Loss Account but the addition has been made on the wrong premise that this amount was not credited to the Profit & Loss Account
Amount of Rs.6,691/-was on account of GST Refund which was in the form of receivable found place in the current assets in Balance Sheet and as there was no need to credit this amount to the Profit & Loss Account. But here also, the addition has been made on the wrong premise that this amount was not credited to the Profit & Loss Account.
It is also pertinent to mention here that though a letter regarding adjustment of these liabilities is seen on the portal but no any such letter was served on the postal address of the appellant and because of non-viewing of portal frequently could not become possible and hence the appellant was not aware that any such addition is going to be made in his returned income.
That being aggrieved by the additions so made in his case, appellant filed his appeal before the office of the Learned Commissioner of Income Tax (Appeals), which has been vide order dated 27.01.2025 by observing that the appeal filed by the assessee is not maintainable on the ground that the admitted tax as disclosed in the return of income has not been deposited by the assessee as required under sup 249(4) of the I.T. Act, 1961.”
The facts of the case are that the assessee filed a return of income on 31.03.2022 declaring a total income of Rs. 37,35,950/-. As per the return filed by the assessee, the tax liability with regard to the same worked out to Rs. 9,70,616/- Syed Asif Ali
A.Y. 2021-22
and after levy of interest, it worked out to Rs. 11,84,911/-. As per the return of income filed by the assessee, the total amount of prepaid taxes were Rs. 21, 347/-.
Subsequently, the ld. AO made adjustments on account of draw back of Rs.
70,88,037/- and other amounts not allowable under section 37 of the return, which was claimed in Schedule OI and the Audit Report of Rs. 2,33,88,200/-. As a result of this, the total income of the assessee was computed at Rs. 3,42,92,124/- and a demand of Rs. 1,64,89,370/- was created upon the assessee during the processing under section 143(1).
Aggrieved with the said adjustments made during processing, the assessee filed an appeal before the ld. JCIT(A), which was transferred to JCIT(A)-1, Ahmedabad under the e-appeals Scheme, 2023. The ld. JCIT(A) observed that the assessee had only paid total tax of Rs.21, 347/- out of the tax on admitted income that amounted to Rs. 9,70,616/-. He quoted from the provisions of section 249(4) of the Income Tax Act which held that no appeal could be admitted unless at the time of filing of the appeal, the assessee had paid the tax due on income returned by him or where no return had been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax that was payable by him. He, therefore, issued a notice to the assessee on 27.12.2024, pointing this out to the assessee and asking the assessee to show cause as to why the appeal filed by him should not be dismissed as he had not fulfilled the conditions, as per the provisions of section 249(4) of the Act. The ld. JCIT(A) records that no reply was received from the assessee in this regard. Therefore, he issued an another notice on 16.01.2025 which was mailed to ID of the assessee syedasifali104@gmail.com but upon failure to receive any reply, quoting from the provisions of section 249(4), the appeal filed by the assessee was dismissed in limine.
Aggrieved with this dismissal, the assessee has come in appeal before us. Sh. B.P. Yadav, Advocate (hereinafter referred to as the ld. AR) submitted that the assessee had not been provided with any opportunity to be heard before making Syed Asif Ali
A.Y. 2021-22
additions and before the dismissal of his appeal. It was, therefore, prayed that the matter may kindly be restored back to the file of the ld. JCIT(A) so that the assessee could explain his position.
On the other hand, Sh. Mazhar Akram, CIT DR (hereinafter referred to as the ld. DR) pointed out that as the assessee had not been able to meet the pre- conditions for admission of appeal, the ld. CIT DR was justified in dismissing the same and his decision should be sustained.
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6. We have duly considered the facts and circumstances of the case. We find that as per the provisions of section 249(4), the ld. CIT(A) could not have admitted the appeal unless the assesseee had paid taxes due on the income returned by him.
In the instant case, the assessee has furnished a return of income where it has admitted an income of Rs. 37,35,950/- and the tax on the same works out to Rs.
9,70,616/-. However, as per the computation, it is seen that the assessee has only paid taxes to the extent of Rs. 21, 347/-. Thus, taxes to the extent of Rs. 9,49,269/- remained unpaid on returned income. The ld. JCIT(A) had provided two opportunities to the assessee to explain why the appeal should not be dismissed on this account, but the assessee did not offer any explanation in this regard. Even before us, it is noticed that the assessee was completely silent on the issue of whether he has paid taxes on admitted income or not. In these circumstances, since the ld. JCIT(A) is precluded from admitting any appeal unless the taxes on admitted income have been deposited, as per the provisions of section 249(4) of the Act, it stands to reason that his order to dismiss the appeal in limine is justified. That being the case, there is no occasion to entertain appeal on the issue of lack of opportunity to explain the merits of the additions made by the ld. AO. Accordingly, we dismiss the appeal of the assessee as not maintainable. However, in the interest of justice, we hold that in the event that the assessee pays the tax on admitted income, he is at liberty to approach us in a fresh appeal with proof of such payment so that the case can be heard on its merits.
Syed Asif Ali
A.Y. 2021-22
In the result, the appeal of the assessee is dismissed.
Order pronounced on 16.10.2025 in the Open Court. [KUL BHARAT] [NIKHIL CHOUDHARY]
VICE PRESIDENT
ACCOUNTANT MEMBER
DATED: 16/10/2025
Sh..