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Facts
The assessee, an individual engaged in motorcycle retail trade, failed to file his Income Tax Return for A.Y. 2018-19 despite large bank deposits. Following non-compliance to notices, the Assessing Officer estimated income at 8% of deposits and completed the assessment. The CIT(A) dismissed the assessee's appeal without considering its merits, solely on the ground of non-payment of advance tax under Section 249(4)(b) of the Act.
Held
The Income Tax Appellate Tribunal (ITAT) ruled that the CIT(A)'s order violated principles of natural justice and Section 250(6) of the Income Tax Act, as it was passed without providing sufficient opportunity to the assessee and failed to record reasons or analyze facts. The ITAT set aside the CIT(A)'s order as unsustainable and remanded the issue back to the CIT(A) for fresh adjudication, ensuring the assessee is given a reasonable opportunity to present its case.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-payment of advance tax without hearing the merits of the case, and if such dismissal violated natural justice and Section 250(6) of the Income Tax Act.
Sections Cited
249(4)(b), 271A, 44AA, 139(1), 148A(b), 148, 270A, 156, 249(4), 234B(1), 208, 210, 143, 140A, 147, 250, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘GUWAHATI’ BENCH, GUWAHATI’
Before: SHRI RAJESH KUMAR, AM & SHRI MANOMOHAN DAS, JM
O R D E R PER BENCH:
These appeals preferred by the assessee against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 28.01.2025, A.Ys. 2018-19 & 2019-20.
The facts and circumstances are similar in all the appeals in to 74/GHY/2025, hence, we will take the for A.Y. 2018-19 as lead case and will decide the issue. The grounds raised in ITA No. 70/GHY/2025 is as under: -
“1. For that the Learned Commissioner of Income Tax (Appeals) erred in law as well as on facts in dismissing the appeal filed by the appellant on the ground of non-payment of deposit u/s 249(4)(b).
Aggrieved assessee preferred an appeal before the ld. CIT (A), who without going into the merits of the case, simply dismissed the appeal of the assessee by holding as under: -
“Decision – 3.1 I have examined facts of the case as also gone through relevant provisions of Income Tax Act (the Act). In the present case, the appellant failed to file return of income. The impugned order was passed u/s 270A of the Act, creating demand of Rs. 5,02,001/- and the appellant was asked by notice u/s 156 of the Act to deposit the demand but it is noticed that the appellant has not deposited the demand before filing of this appeal. The appellant, at sl. no. 16 of Form-35, has stated to have made payment of appeal fee of Rs. 1,000/- only. At sl. No. 9
9. Where no return has been filed by the appellant for the assessment Not year,whether an amount equal to the amount of advance tax as per applicable section 249(4)(b) of the Income-tax Act, 1961 has been paid
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 3 Deputy Commissioner (Appeals)] 4 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 5 that clause].] 3.3 As per provisions of section 234B(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 234B(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 tax, 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 143 4 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,-
On the other hand, the learned Departmental Representativeheavily relied on the decisions of the ld. lower authorities.
We after hearing the parties and perusing the material available on record, find that instant impugned order passed by NFAC was dismissed without looking into the merits of the case. In our opinion, the order passed by the ld. appellate authority is in violation of Provision of Section 250(6) of the Act. Sub-section (6) of section 250 of the Income Tax Act, 1961, mandates the ld. CIT(A) to state the point in dispute, and thereafter record reasons in support of his conclusion. A perusal of the order of the ld. CIT(A) would indicate that it is not in consonance with mandate given in the Act. The ld. CIT(A) has not made any analysis of facts available on record, including the assessment records and has passed an ex-parte order. Therefore, the impugned order is not sustainable, it deserves to be set aside. We therefore, feel it necessary in the larger interest of justice and fair play, deem it appropriate to restore the issue to the file of the ld. CIT (A) for necessary adjudication for which reasonable opportunity to be provided to the assessee to furnish the reply and file relevant details and evidences if needed. It is further clarified that assessee should also not seek any adjournments unless otherwise required for reasonable cause. The appeal of the assessee is allowed for statistical purposes.
In the result, all the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 28.07.2025.