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Facts
The assessee appealed against a CIT(A) order for AY 2017-18, which was dismissed in-limine due to the non-payment of advance tax and non-filing of the return of income, as per Section 249(4)(b). The original assessment by the AO was made ex-parte under Section 144, treating Rs. 25.40 crores in cash deposits during demonetization as income under Section 69A, as the assessee failed to file a return or respond to notices.
Held
The Tribunal noted the assessee's claim of having incurred losses, which, if true, would negate the need for advance tax, but this fact was not presented to the CIT(A). Consequently, the Tribunal set aside the CIT(A)'s order and remanded the case for fresh examination of Section 249(4) compliance and adjudication on merits, after providing the assessee an adequate opportunity to be heard.
Key Issues
Whether the appeal could be dismissed in-limine for non-payment of advance tax and non-filing of return when the assessee claims to have incurred losses. Whether the assessment of cash deposits under Section 69A via an ex-parte assessment under Section 144 was justified.
Sections Cited
Section 249(4)(b), Section 142(1), Section 144, Section 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI B.R. BASKARAN & SHRI SUNIL KUMAR SINGH
PER B.R. BASKARAN, ACCOUNTANT MEMBER :
The assessee has filed this appeal challenging the order dated 28/02/2024, passed by learned CIT (A), NFAC, Delhi and it relates to the assessment year 2017-18.
None appeared on behalf of the assessee. On perusal of the order passed by learned CIT(A), we notice that the First Appellate Authority has dismissed the appeal on technical ground that the assessee did not pay advance tax as mandated u/s. 249(4)(b) of the Act, which is applicable to assessees who have not filed return of income. In this regard, the learned D.R explained that the assessee did not file return of income for the year under consideration and hence in terms of sec.249(4)(b) of the Act, the assessee should have paid advance tax due for this year in order to get the appeal admitted. However, the assessee has not paid advance tax at all. Hence the Ld CIT(A) has dismissed the appeal in-limine without admitting it.
On merits of the addition, the Ld D.R submitted that the AO has noticed that the assessee has deposited cash into his bank account during the demonetization period and in order to examine the sources thereof, the AO issued notice u/s 142(1) of the Act to the assessee asking him to file return of income. However, the assessee did not file return of income and also did not appear before him. Hence, the Assessing Officer completed the assessment to the best of his judgment u/s. 144 of the Act assessing entire cash deposit of Rs.25.40 crores as income of the assessee u/s. 69A of the Act.
Since, the assessee has not filed return of income and has also not paid advance tax also, the learned CIT(A) did not admit the appeal and accordingly, dismissed the same in-limine.
However, in the ground of appeal urged by the assessee before the Tribunal, it is stated that the assessee has incurred loss in this year and hence, there was no necessity to pay any advance tax. We notice that this fact was not brought to the notice of learned CIT(A) and hence, he was constrained to dismiss the appeal. Further, it is not clear as to whether the assessee made proper representation before the learned CIT(A). Accordingly, we are of the view that the issue of compliance of provisions of section 249(4) of the Act may be examined by learned CIT(A) afresh after affording adequate opportunity of being head to the assessee. If the appeal is found to be admissible, then the Ld CIT(A) is also required to adjudicate the grounds on merits also. Accordingly, we set-aside the impugned order passed by learned CIT(A) and restore all the issues to his file for examining them afresh.
In the result, the appeal filed by the assessee is treated as allowed. Order pronounced in the open court on 18th June, 2024.