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Facts
The assessee purchased an immovable property for Rs. 34,20,000/- during AY 2012-13, allegedly paid in cash from the sale consideration of other properties. Based on AIR information, the AO reopened the assessment and added the property value as "income from other sources", which was upheld by the CIT(A). The CIT(A) dismissed the assessee's appeal in limine for non-payment of advance tax as per Section 249(4)(b) of the Income Tax Act.
Held
The Tribunal set aside the order of the CIT(A), noting that the CIT(A) dismissed the appeal *in limine* without considering the assessee's contention of having no taxable income and thus no liability for advance tax. The matter was restored to the CIT(A) for a fresh decision on merits after providing the assessee with a reasonable opportunity of being heard.
Key Issues
The key issue was the maintainability of the assessee's appeal before the CIT(A) due to non-payment of advance tax under Section 249(4)(b) of the Income Tax Act, and whether the CIT(A) correctly exercised discretion regarding the pre-condition for appeal admission.
Sections Cited
Section 249(4)(b), Section 133(6), Section 147, Section 148, Section 142(1), Section 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of learned CIT(Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 09.01.2024, pertaining to the assessment year 2012-13. The assessee has raised following grounds of appeal:
“1. That the order of the Id. Commissioner of Income-Tax (Appeals) is erroneous both on facts and in law.
That the Id. CIT (A) has erred in holding that the appeal filed by the appellant is not maintainable. The Id. CIT (A) has not considered that no
That without prejudice to the above, the Id. CIT (A) has erred in dismissing the appeal in limine without considering that the appellant was covered by the proviso to clause (b) of Section 249(4) of the Income Tax Act, which vests a discretion with him to exempt the appellant as good and sufficient reasons were placed on record to exempt the appellant from the pre-condition of payment of tax and admit the appeal.
That without prejudice to the above, the Id. CIT (A) and the Ld. AO have failed to appreciate the settled position of law that when an immoveable property was purchased out of the money invested by the husband, in the name of his wife, the wife cannot be taxed under the head "income from other sources for purchasing the immoveable property.
Even otherwise, the Id. CIT (A) and the Id. Assessing Officer have erred in not appreciating the fact that the no income arises in the AY 2012-13 as the payments were made pursuant to an agreement and possession was taken in the AY 2011-12 and the Id. AO has erred in issuing reopening notice u/s. 148 of the Income Tax Act, 1961 for AY 2012-13.
That the Id. AO had erroneously proceeded with reopening the case of the appellant solely on the basis of information received without any application of his mind. It is settled position of law that reopening on the basis of borrowed satisfaction is invalid.
That the assessment proceedings are vitiated since the computation of income has not provided to the appellant.
The Id. CIT (A) ought to have considered the ground and submissions agitated before him and decided the appeal on merits.”
Facts, in brief, are that on the basis of AIR information received to the effect that the assessee had purchased immovable property worth Rs.39,49,000/- during F.Y. 2011-12, relevant to Α.Υ.2012-13, to verify the source of by the assessee. Therefore, the case of assessee was reopened u/s 147 of the I. T.
Act. 1961 (the “Act”). The statutory notices issued by the AO were not responded by the assessee. The assessee also did not file her ITR for A.Υ. 2012-13.
Subsequently, in response to notice u/s 142(1)/144, it was submitted on behalf of the assessee that during A.Y. 2012-13 the assessee had purchased a property for Rs.34,20,000/- and the whole amount had been paid in cash available with her as sale consideration received from the two properties sold in 2008 and 2014 respectively. Rejecting the explanation furnished on behalf of the assessee the AO completed the assessment by adding Rs. 34,20.000/- to the net income of the assessee as income from other source. Aggrieved against this the assessee preferred appeal before learned CIT(A) who dismissed the appeal and upheld the action of AO. Aggrieved against it, now the assessee is in appeal before this Tribunal.
At the outset learned counsel for the assessee submitted that learned CIT(Appeals) has dismissed assessee’s appeal in limine, without going into the merits of the case. He prayed that order of learned CIT(Appeals) may be set aside and matter may be restored to his file for fresh decision after affording reasonable opportunity of being heard to the assessee.
On the other hand learned DR supported the orders of authorities below.
The learned CIT(A) has dismissed assessee’s appeal, inter alia, by observing as under:
“As per the provisions of the section 249(4)(b) of the Act, the appeal shall not be admitted, unless the appellant has paid an amount equal to the amount of advance tax which was payable by him if no return of income has been filed.
In the present case, the appellant did not file return of income. On or before filing the present appeal, the appellant has failed to make the required payment of the amount equal to the amount of advance tax which was payable by him, Further, the appellant neither provided any satisfactory clarification/explanation in response to the deficiency letter issued by this office nor did he offer any reason, leave alone any good and sufficient reasons seeking exemption from the operation of the sec. 294(4)(b) even though sufficient opportunities were provided to him.
On careful consideration of the above facts and circumstances, as the appellant has failed to fulfill the necessary conditions for admission of appeal before CIT(A) as per sec 249(4)(b) the present appeal is liable to be held as not eligible for admission and hence, the appeal is not admitted.”
5.1 The stand of the assessee is that her case is covered by the proviso to clause (b) of Section 249(4) of the Income Tax Act, which vests a discretion with the learned First Appellate Authority to exempt the appellant from the pre-condition of payment of tax and admit the appeal. The learned First Appellate Authority has dismissed assessee’s appeal, in limine, as not admitted. It is the case of the assessee that she did not file return of income as she had no taxable income. Therefore, she was not liable for paying advance tax. Considering the totality of facts of the justice I hereby set aside the order of learned CIT(Appeals) and restore the matter back to the file of learned First Appellate Authority to decide the appeal on merit after affording adequate opportunity of being heard to the assessee. Grounds are allowed for statistical purposes.
Assessee’s appeal is allowed for statistical purposes.
Order pronounced in open court on 13.08.2024.