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Facts
The assessee's appeal was directed against an order of the NFAC. The NFAC dismissed the appeal in limine, holding that the assessee had an obligation to pay advance tax under Section 249(4) of the Act, which was not fulfilled. The assessee's grounds for appeal included that the NFAC erred in dismissing the appeal without considering explanations and that the firm was not in existence.
Held
The Tribunal held that the assessee's case was below the taxable limit and that the addition of Rs. 10 lakhs made by the AO was the subject matter of appeal. Therefore, there was no question of payment of advance tax under Section 249(4)(b) of the Act. The NFAC was not justified in dismissing the appeal on the ground of non-payment of admitted tax.
Key Issues
Whether the NFAC was justified in dismissing the appeal in limine for non-payment of advance tax, and whether the addition made by the AO was debatable.
Sections Cited
250, 144, 249(4), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI SOUNDARARAJAN K
Per Chandra Poojari, Accountant Member The appeal by the assessee is directed against the order of NFAC, New Delhi both dated 30/01/2024 passed u/s 250 of the Act for the assessment years 2017-18.
The grounds raised by the assessee s reproduced as under:- “1. The order of the Hon'ble National Faceless Appeal Centre (NFAC), Delhi, is opposed to law and facts of the case.
ITA No.378/Bang/2024 Page 2 of 4
The Hon'ble NFAC erred in dismissing the appeal in limine. 3. The impugned order is passed without considering the explanation of the Appellant, hence, bad in law. 4. The Hon'ble NFAC's finding that there was an obligation on the Appellant to pay the advance tax is on a misinterpretation of Section 249(4) of the Act and erroneous. 5. The Hon'ble (NFAC) ought to have appreciated that the Firm having PAN: AADFB7544B is not in existence, hence. assessment order on the said Firm is bad in law. 6. Without prejudice, the Hon'ble NFAC ought to have appreciated that the Appellant Firm has not deposited any cash, much less a sum of Rs. 10 lakhs during the demonetization period. 7. The Hon'ble NFAC ought to have held that the provisions of Section 69A of the Act are not applicable in the facts of the case. 8. The Appellant craves for leave to add to, delete from or amend the grounds of appeal.
In this case, the order has been passed u/s 144 of the Act by making various additions.
Against this, assessee went in appeal before the NFAC, New Delhi.
The NFAC observed that there was a demand of Rs.12.36 lakhs as the assessee has not filed return of income as well as the equal to the amount of advance tax, which was payable by the assessee. Hence, the appeal filed by the assessee was not admitted by the NFAC, New Delhi.
ITA No.378/Bang/2024 Page 3 of 4
Against this, the assessee is in appeal before us.
We have heard both the parties and perused the material available on record. Before us, the ld. AR submitted that the assessee in this case has not filed the return of income, as there was no taxable income for the assessment year under consideration. There was addition of Rs. 10 lakhs in the order passed by the AO towards cash deposited into the assessee’s bank account during the demonetization period. This entire addition has been challenged before the NFAC, New Delhi, as such, no income was admitted. Hence, the provision of sec. 249(4)(b) is not applicable to the assessee’s case. We agree with the assessee counsel. The assessee case is below taxable limit. The total addition made by the AO is subject matter of appeal before the NFAC, New Delhi. Hence, there is no question of payment of advance tax u/s 249(4)(b) of the Act. Accordingly, the NFAC, New Delhi is not justified in dismissing the appeal on the reason that no payment of admitted tax. Accordingly, the order of the NFAC, New Delhi is vacated.
After going through the AO order, we find that it is appropriate to remit this issue regarding the addition
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made by the AO to the file of the AO for reconsideration to decide the same after giving reasonable opportunity to the assessee since the order passed by the AO is ex-parte u/s 144 of the Act. Accordingly, the addition disputed by the assessee in this appeal is remitted to the file of AO for fresh consideration.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 20th May, 2024. Sd/- Sd/- (SOUNDARARAJAN K) ( CHANDRA POOJARI) Judicial Member Accountant Member Bangalore, Dated, 20th May, 2024 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order
Asst. Registrar, ITAT, Bangalore