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Facts
The assessee, an individual, did not file an income tax return for AY 2020-21. The AO received information about a property sale for Rs. 25,00,000 and reopened the assessment, eventually adding Rs. 50,00,000 as long-term capital gain.
Held
The CIT(A) dismissed the assessee's appeal, holding it was not maintainable under Section 249(4) of the Act for non-payment of advance tax. The Tribunal held that Section 249(4) is triggered only when there's an obligation to pay advance tax, and in this case, the income assessed was not admitted income.
Key Issues
Whether the CIT(A) was correct in dismissing the appeal for non-payment of advance tax on assessed income when the assessee contended the income was below the taxable limit and no return was filed.
Sections Cited
250, 148A, 148, 249(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: MS. PADMAVATHY.S & SHRI MANU KUMAR GIRI
Kathirvelu Subbarayan, The Income Tax Officer, No.3/2, NGO Colony, 2nd Street, Vs. Non Corporate Ward-19(4), Pazhavanthangal, St. Thomasmount, Chennai. Chennai – 600 016. PAN: CXJPS 2254Q (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� की ओर से/ Appellant by : Mr. Subash Anbaraju.K, Advocate ��थ� की ओर से /Respondent by Ms. Gouthami Manivasagam, Addl.CIT : सुनवाई की तारीख/Date of Hearing : 13.02.2026 घोषणा की तारीख /Date of Pronouncement : 17.02.2026 आदेश / O R D E R PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 12.09.2025 for Assessment Year (AY) 2020-21.
The assessee is an individual and did not filed the return of income for the assessment year 2020-21. The assessing officer received information that the assessee has sold property for consideration of Rs.25,00,000/-. Therefore the assessing officer issued the notice under section 148A(b) on 03.02. 2024.
The assessing officer subsequently passed an order under section 148A(d) on 28.03.2024 and also reopened the assessment by issuing notice under section 148 of the act. Since the assessee did not respond to the show cause notice the assessing officer concluded the assessment by adding a sum of Rs.50,00,000 being the entire sale consideration as long-term capital gain in the hands of the assessee. Aggrieved the assessee filed before the CIT(A). The CIT(A) dismiss the appeal by invoking the provisions of section 249(4) of the act stating that the assessee has not paid an amount equal to the amount of advance tax payable by him. The assessee is in appeal before the tribunal against the order of the CIT(A).
We heard the parties and perused the material on record. In the present case the assessing officer reopened the assessment on the ground of the assessee though has entered into transaction towards sale of immovable property failed to filed the return of income. The assessing officer while concluding the assessment made an addition towards the entire sale consideration under the head long-term capital gains. In other words the obligation to pay tax arises out of the assessed income in the hands of the assessee. The CIT(A) dismiss the appeal stating that the assessee has not paid the advance tax and therefore the appeal is not maintainable under section 249(4) of the act. Before proceeding further we will look at the relevant provisions of the act which read as under – 249 - Form of appeal and limitation. (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 asssssessee has paid an Kathirvelu Subarayan :- 3 -:
amount equal to the amount of advance tax which was payable by him:
In our considered view the statutory requirement contemplated in clause (b) of sub-section (4) of section 249 would be triggered only where any obligation was cast upon the assessee to pay ‘advance tax’. In other words the appeal could not be admitted where the assessee fails to pay the tax on the admitted income and not "assessed income". In the given case the assessee is contending that the return of income is not filed for the reason that his income for the year under consideration is below the taxable limit. Accordingly, the income assessed as long-term capital gain is not an admitted income but is an assessed income in the hands of the assessee and that the obligation to pay advance tax for the purpose of section 249(4) does not arise. Therefore we are of the considered view that the CIT(A) is not correct in dismissing the appeal on the ground that the assessee has not paid the tax on the assessed income. Having held so we notice that the order of assessment is passed ex parte the assessee did not respond to the notices issued by the assessing officer. The Ld. AR during the course of hearing prayed for one more opportunity to represent the case properly before the lower authorities. Considering the facts and circumstances peculiar to assessee's case, we are inclined to give one more opportunity to the assessee by producing the required details. Accordingly we remit the back to the AO with the direction to call for necessary details and decide the issue in accordance with law. The assessee is required to submit the necessary details as may be called for and cooperate with assessment proceedings. It is ordered accordingly.
In result the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 17th day of February, 2026 at Chennai.