APEX HOSPITAL AND TRAUMA CENTER,MEERUT vs. ITO, WARD -1(1), MEERUT

This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 25.01.2024 pertaining to A.Y 2017-18.

The assessee has raised the following grounds of appeal:

The representatives of both the sides were heard at length, the case records carefully perused.

Briefly stated the facts of the case are that the assessee is a partnership firm incorporated on 08.02.2016, to operate and maintain a multi-facility hospital and to provide other medical services. The assessee did not file any ITR for the AY 2017-18.

The Assessing Officer received an information that during the year under consideration that the assessee has deposited a sum of Rs.12,55,000/-, in cash in its bank account, and has invested a sum of Rs 2,40,00,000/- in purchase of immovable property during the year.

During the course of the reassessment proceedings the assessee submitted that the cash was deposited out of the current year business receipts and immovable property was purchased after taking a term loan of Rs. 1,50,00,000/- from Union Bank of India and remaining amount was paid out of capital introduction of Rs.95,60,000/- by the partners of the assessee firm. The reassessment proceedings were completed vide reassessment order dated 31.03.2022 passed u/s 147 r.w.s. 144 of the Act, by the Assessing Officer/ NFAC, wherein addition of Rs.2,55,05,000/- was made holding that the cash deposits of Rs.15,05,000/- in the bank account of the assessee and the investment of Rs.2,40,00,000/-in purchase of immovable property were unexplained.

Aggrieved, the assessee filed an appeal before the ld. CIT(A)/ NFAC, who, vide order dated 25.01.2024 refused to admit the appeal on the ground that advance tax payable by it in terms of provisions of section 249(4)(b) of the Act was not paid by the assessee.

Aggrieved further, the assessee is in appeal before us.

It is the say of the ld. AR of the assessee that the assessee firm did not earn any income during the year under consideration hence its partner's were under the impression that the ITR of the partnership firm was not required to be filed. Hence, no ITR of the assessee firm was filed for the relevant year. The ld. counsel for the assessee produced the accounts of the assessee to show that there was nil income for the year. It is further submitted that neither any notice u/s 210 was issued to the assessee determining its liability to pay advance tax nor the AO levied any interest u/s 234C for non payment of advance tax. The ld AR reiterated that there was no advance tax payable by the assessee and prayed for restoration of the issue to CIT(A) for a fresh adjudication.

We have heard the rival submissions and have perused the relevant material on record. From the profit & loss a/c of the assessee it can be seen that no taxable income has been declared by the assessee during the relevant year.In terms of provisions of section 209 of the Act, the assessee firm was not required to deposit any advance tax as no income was earned during the year and also that no order u/s 210 of the Act, was passed upon it determining any liability to deposit advance income tax.

The fact that no advance tax was payable by the assessee firm is also supported from the income tax computation sheet as provided along with the assessment order wherein no interest u/s 234C has been charged by the Assessing Officer.

On the above noted facts and under the circumstances, we are of the considered view that the ld. CIT(A), has erred in law and facts of the case by holding that the assessee has not paid the advance tax it was required to pay, as no advance tax was payable by the assessee firm for the year under consideration. We, therefore, hold that in the interest of justice and fair play the issue be restored to the file of the CIT(A) to adjudicate the matter afresh. The CIT(A) is directed to rehear the appeal after affording a reasonable and adequate opportunity of being heard to the assessee. The assessee is directed to furnish all necessary details called for by the ld. CIT(A).

In the result, the appeal of the assessee in is allowed for statistical purposes.