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Facts
The assessee's appeal was rejected by the CIT(A) for non-filing of the return under section 249(4)(b) of the Income Tax Act, 1961, despite the assessee having no taxable income. The additions of Rs. 21,11,000/- under section 69 were confirmed. The mother of the assessee received death cum retirement benefits which were used to make FDRs in the assessee's name.
Held
The Tribunal held that the CIT(A) erred in rejecting the appeal without considering the merits and quantum of tax liability. When an assessee has no taxable income, the provisions of the Income Tax Act do not require them to work out hypothetical advance tax liability. The CIT(A)'s decision was found to be arbitrary and mechanical.
Key Issues
Whether the CIT(A) was justified in rejecting the appeal on the ground of non-filing of return when the assessee had no taxable income? Whether the addition made under section 69 was justified?
Sections Cited
249(4)(b), 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES, “SMC” JAIPUR
Before: SH. SANDEP GOSAIN & DR. M. L. MEENA
The captioned appeal has been filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 08.01.2024 in respect of Assessment Year: 2011-12, challenging therein rejection of the appeal of the assesse on the ground of non-filing of Neha Meena v. ITO the return under section 249(4)(b) of the Income Tax Act 1961 although the assesse’s income was below taxable limits and that confirmation of the addition of Rs 21,11,000/- under section 69 of the Income Tax Act without considering the submissions of the assessee appellant.
At the outset the ld. council for assesse has submitted that the learned CIT appeal was not justified in not admitting the appeal of the assessee as he has just rejected the appeal of the assesse by referring to the provisions of section 249(4)(b) of the act without discussing and calculating the quantum of the stipulated tax liability to be paid by the assessee. The learned counsel argued that where the assessee was not having taxable income, the provisions of income tax do not stipulate that how the advance tax liability has to be worked out. The AR contended that since, appellant has no taxable income during the assessment year under consideration and hence, she has no advance tax liability payable and accordingly, the provisions of section 249(4)(b) of the act not applicable in the present case of the assessee.
On the merits of the case, the AR submitted that during the financial year relevant to the assessment year under consideration, the mother of the assesse Alka Meena has received various death cum retirement
Neha Meena v. ITO benefits of her husband Shri Jagdish Lal Meena in her account number 1586000200059802 on various dates and out of which she made time deposits in the name of the appellant (APB, Pgs * 0.3 - 20) . The learned AR contended that the bank statement of Smt. Alka Meena is self- explanatory regarding the source of investment in FDR in the name of the appellant in Punjab National Bank by transfer entry (APB, Pgs. 1-2). He submitted that the CIT appeal did not properly consider the submissions of the appellant filed in response to the deficiency letter issued by him that assessee had no taxable income during the year under consideration and therefore she was not liable for filing return of income and to pay any advanced tax. He argued that the action of the CIT appeal is unjustified and arbitrary in rejecting the appeal of the assessee. The AR pleaded that the addition may be deleted.
Per contra, the Id. AR stands by the impugned order.
We have heard the rival contention, perused the material on record and the impugned order. Admittedly, the appellant has no taxable income during the year under consideration. In our view, when the appellant assessee has no taxable income, the provisions of the Income tax do not Neha Meena v. ITO require the appellant assessee to work out any advance tax liability hypothetically and make payment thereof as alleged by the department.
From the record, it is evident that the Id. CIT(A) has not appreciated the merits of the case and rejected the appeal of the assessee by referring the provisions of section 249(4)(b) of the Act without discussing a single word about the quantum of the stipulated tax liability, required to be paid by the appellant assessee is in violation of provisions of law. It is undisputed fact on record that the mother of the assessee has received various deaths- cum retirement benefits in her aforesaid bank account out of which she made FDRs in the name of the appellant (APB pgs. 3 to 20). The bank statement of the appellant assessee is self-explanatory regarding source of the investment in FDRs made in the Punjab National Bank by way of transfer entry (APB pg. 1 & 2). Thus, the decision of the Id. CIT(A) is taken in arbitrary manner and mechanical manner ignoring the facts on record is not justified. In our view, the decision of the Id. CIT(A) suffer with infirmity and perversity to the facts on record which deserves to be quashed.
In the above view, we accept the grievance of the appellant assessee as genuine and as such the addition of Rs.21,11,000/- made u/s 69 of the Income Tax Act, 1961 is deleted.
In the result, the appeal filed by the assessee is allowed.