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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
This appeal by assessee is directed against the order dated 01.01.2024 of the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi for A.Y.2012-13. The assesse has raised following grounds of appeal:
“1 That the Ld. CIT(A) erred in dismissing the appeal filed by the assessee by invoking provisions of Sec.249(4) of the Act. 2 That the Ld. CIT(A) erred in not admitting the appeal filed by the assessee by invoking provisions of Sec. 249(4) of the Act.
ITANo.163/Ind/2024 Ramdas Yadav 3 That the Ld. CIT(A) ought to have heard the ground of appeal raised by the assessee in tho appeal proceeding. 4 That the Ld. ITAT may kindly direct the AO to refund the appeal fee to assesse.”
2. Ld. AR of the assesse has submitted that the CIT(A) has dismissed the appeal of the assessee as inadmissible for want of payment of advance tax as per provisions of section 149(4)(b) of the Act. He has pointed out that there is no liability or obligation on the assessee to pay the advance tax as there is no taxable income of the assessee for the year under consideration. He has further submitted that the assesse did not file any return of income and AO initiated the reassessment proceedings by issuing notice u/s 148 and thereafter completed the assessment u/s 144 r.w. section 147. Thus, Ld. AR has submitted that when the assessee did not file any return of income then the provisions of section 249(4) of the Act would not apply in the appeal against the reassessment order passed by the AO. Ld. AR has relied upon the decision of Mumbai Benches of the Tribunal dated 16.04.2024 in case of M/s Nine Globe Industries Pvt. Ltd. vs. ACIT in ITANo.3889/Mum/2023.
3. On the other hand, Ld. DR has relied upon impugned order of the CIT(A).
We have considered the rival submissions as well as relevant material on record. The AO has stated in the assessment order passed u/s 144 r.w. section 147 of the Act dated 26.11.2019 that the assesse has not filed any return of income for assessment year under consideration. On the basis of the AIR information regarding Page 2 of 9
ITANo.163/Ind/2024 Ramdas Yadav deposit of cash of Rs.49,00,000/- in the Saving Bank Account with State Bank of India the AO has issued notice u/s 148 on 25.03.2019 but there was no response on behalf of the assessee nor any return of income was filed. The assesse even did not respond to the notice issued by the AO u/s 142(1) and consequently the assessment was framed as best judgment assessment u/s 144 of the Act whereby the AO has assessed the total income of the assessee at Rs.49,00,000/-. The assessee challenged the action of the AO before the CIT(A) and raised various grounds however, the CIT(A) has dismissed the appeal of the assessee in para 2.5 to 2.7 as under:
“2.5. As per the deficiency letter, the details of deficiency is "Tax on returned income not paid/particulars of payment not mentioned, which includes two parts, one part is tax on returned income not paid and secondly particulars of payment not mentioned. The second part of the provision is applicable to the case of the appellant. Particulars of payment not mentioned pertains to Section 249(4)(b) of the Act, which is particulars of payment of advance tax as per the said provision. It is seen that the appellant has not responded to the deficiency letters goes to suggest that the appellant has not paid an amount equal to the amount of advance tax which was payable by him, on or before filing the appeal. Moreover, the appellant has also not made an application as per the Proviso to Section 249(4). 2.6. In this regard, the Column nos, 8 & 9 of Form No. 35 is reproduced here under:
8 Where a retum has been filed by the Not applicable appellant for the Not assessment year in connection with which the appeal is filed, Applicable whether tax due on income
ITANo.163/Ind/2024 Ramdas Yadav returned has been paid in full 8.1 If reply to 8 is Yes, then enter details of return and taxes paid a Acknowledgement number b Date of filing C Total tax paid 9 Where no return has been filed by the Not applicable appellant for the Not assessment year, whether an amount equal to the amount of Applicable advance tax as per section 249(4)(b) of the Income Tax Act. 1961 has been paid
As can be seen from the above, the appellant has stated "Not Applicable" in the above columns. In these columns, the appellant was required to mention the details of return filed and particulars of payment of advance tax prior to filing the appeal respectively, which is not mentioned. Therefore, it is clear that, the appellant has not paid an amount equal to the amount of advance tax which was payable on or before filing the appeal. 2.7. As per 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. As the applicable advance tax has not been paid by the appellant before filing of the appeal, the appeal shall not be admitted. Therefore, the present appeal filed is not admitted as per the provisions of Section 249(4) of the Act.” 4.1 Thus, the appeal was dismissed in limine as not admissible for want of payment of advance tax u/s 249(4) of the Act. At the outset, Page 4 of 9
ITANo.163/Ind/2024 Ramdas Yadav we note that an identical issue has been considered by this Tribunal in case of Shri Pushpendra Singh Chouhan vs. ITO in ITANo.122/Ind/2024 vide order dated 24.06.2024 in para 7 & 8 as under:
“7. We have considered the rival submissions as well as relevant material on record. The Assessing Officer initiated proceedings u/s 147 on the basis of the AR information regarding the cash deposit of Rs.36,03,600/- in the savings bank account of the assessee. Since there was no response on behalf of the assessee to the notices issued by the Assessing Officer, therefore, the assessment was framed ex-parte as best judgment assessment thereby the Assessing Officer has assessed total income of the assessee at Rs.36,03,600/-. The assessee has explained the reasons for non appearance before the Assessing Officer as the assessee belongs to a rural area and having no computer or internet facility in the village and therefore, the assessee was not having access to the notice issued by the Assessing Officer and consequently could not furnish any reply or submissions as well as evidence during the assessment proceedings. Further the CIT(A) has dismissed the appeal of the assessee in limine for want of payment of tax as per the provisions of Section 249(4)(b) of the Act. This is a case of reassessment framed by Assessing Officer u/s 147 r.w.s. 144 of the ACT and therefore, there is no obligation of payment of advance tax as per Clause(b) of Section 249(4) as held by the Mumbai Benches of the Tribunal in case of M/s. Nine Globe Industries Pvt. Ltd Vs. ACIT (supra) in para 4 to 6 as under: “4. In that view of the matter, the appeal came to be dismissed on the ground that the appellant has not filed Rol as well as not paid an amount equal to the amount of advance tax, which was payable by it. It can thus be seen that the CIT(A) had no occasion to examine the merits of the impugned additions.
5. We have heard parties. Perused record. It can be seen that the case was Initially selected for scrutiny, which was completed on 29.03.2015, and there was no change in the returned income of Rs.51.80.800/- in the Page 5 of 9 ITANo.163/Ind/2024 Ramdas Yadav absence of any additions being made. It is a matter of record that originally the return was filed for the relevant year under consideration on 29.09.2012. It was not disputed during the course of hearing that the advance tax has per the assessed income of Rs. 51,80,800/- has been paid. Here is the case of reassessment which is done for the benefit of Revenue. Hence, in our view, clause (b) of Section 249(4) of the Act will not apply as there is no question of paying advance tax in reassessment proceedings, even though assessee did not file Rol.
In the said circumstances, we find that the impugned order dismissing the appeal on the ground of non-compliance of Section 249(4) of the Act cannot be sustained and deserves to be set-aside”. In the case in hand the assessee has filed return of income and thereafter, the Assessing Officer has initiated reassessment proceedings and passed reassessment order. Therefore, for filing the appeal before CIT(A) the question of payment of advance tax by the assessee as per clause(b) of Sub Section 4 of Section 249 does not arise. Similarly the Raipur Bench of the Tribunal in case of Vishnusharan Chandravanshi Vs. ITO in order dated 10.04.2024 has also considered the identical issue in para No.10 to 15 as under:
Admittedly, it is a matter of fact borne from record that the assessee had neither filed his return of income u/s 139 of the Act nor in compliance to notice issued to him u/s. 142(1) of the Act, dated 10.03.2018. As the assessee had failed to file his return of income, the CIT(Appeals) had brought his case within the meaning of Clause (b) of sub-section (4) of Section 249 of the Act. For the sake of clarity, Section 249(4) of the Act is culled out as under: "(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,- (a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or ITANo.163/Ind/2024 Ramdas Yadav (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him: Provided that, in a case falling under clause (b) and on an application made by the appellant in this behalf, the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause." The CIT(Appeals) observed that as the assessee who had not filed his return of income had neither paid an amount equal to the amount of advance tax which was payable by him; nor filed any application seeking exemption from operation of the aforesaid statutory provision for any good and sufficient reason, therefore, he had failed to comply with the statutory requirements contemplated u/s 249(4)(b) of the Act. Accordingly, the CIT(Appeals) dismissed the appeal on the said count itself.
Controversy involved in the present appeal lies in a narrow compass, i.e. sustainability of the view taken by the CIT(Appeals) that the appeal of the assessee who had not filed his return of income for the subject year was not maintainable for the reason that he had failed to satisfy the conditions contemplated in Section 249(4) of the Act.
Admittedly, as per section 249(4)(b) of the Act, in a case where no return of income has been filed by the assessee, then his appeal shall be maintainable before the CIT(Appeals) only if he had paid an amount equal to the amount of advance tax which was payable by him. At the same time, the legislature had carved out an exception to the applicability of the aforesaid statutory requirement by way of a "proviso" to Section 249(4) of the Act, as per which, on an application made by the appellant, the CIT(Appeals) may, for any good and sufficient reason to be recorded in writing exempt him from the operation of the aforesaid statutory provision.
At this stage, I may herein observe that the statutory requirement contemplated in Clause (b) of sub-section (4) of Section 249 of the Act would stand triggered only where any obligation was cast upon the assessee to pay "advance tax". As stated by the Ld. AR, and rightly so, in absence of any taxable income for the year under consideration [as was stated by him in the "SOF" filed before the CIT(Appeals)] no obligation was cast upon him to compute and pay any advance tax u/ss. 208 & 209 of the Act. Considering the fact that as no obligation was cast upon the assessee to compute/deposit any amount towards "advance tax' for the subject year, I am unable to concur with the view taken by the CIT(Appeals) who dismissed the appeal as not maintainable for the reason of non-compliance off mandatory condition contemplated in Clause (b) of sub-section (4) of Section 240 the Act. Although, at the first blush, I was of ITANo.163/Ind/2024 Ramdas Yadav the view that the amount assesse the A.O vide his order u/s. 144 of the Act dated 23.11.2019 of Rs. 10 lacs would saddle the assessee with an obligation to pay "advance tax", but stood corrected a careful perusal of Section 208 and Section 209(1)(a) of the Act, which contemplates determination of the said tax liability at the behest of the assessee.
As in the present case, the assessee had not only before me but had in the "Statement of facts" stated before the CIT(Appeals) that he had no taxa income, therefore, in my view in absence of any obligation cast upon the ass to compute/pay "advance tax" u/ss. 208 and 209 of the Act for the subject year first appellate authority could not have held that he had failed to comply with statutory conditions contemplated in Sec. 249(4)(b) of the Act. My aforesaid we fortified by the orders of the ITAT, Bengaluru in the case of Shamama Reddy Vs. ITO, dated 20.02.2024 and that of ITAT, Deih in the of Vikram Singh Vs. ITO, ITA No.6559/Del/2019, dated 21.02.2023 15. I, thus, in terms of my aforesaid observations, set aside the order of the CIT(Appeals) and restore the same to his file with a direction to dispose appeal after considering the merits of the case. Needles to say, the CIT( Appeals) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee.”
Accordingly, to maintain the rule of consistency we follow the earlier decisions of the Tribunal cited above and consequently the impugned order of CIT(A) is set aside being contrary to the provisions of law. 4.2 Thus, the Tribunal has held that for filing the appeal before the CIT(A) against the reassessment order passed by the AO the question for payment of advance tax by the assessee as per clause (b) of sub-section (4) of section 249 of the Act does not arise. Accordingly this issue is now covered by the earlier decisions of this tribunal and consequently the impugned order of the CIT(A) is set aside being contrary to the provisions of law. Since the assessment order was also passed ex-parte due to non-appearance of the assessee therefore, in the facts and circumstances of the case when the CIT(A) has not adjudicated appeal of the assessee on merits the matter is remanded to the record of the jurisdictional AO for fresh Page 8 of 9
ITANo.163/Ind/2024 Ramdas Yadav adjudication after considering relevant details/evidences as well as explanation about the source of deposit in the bank account to be filed by the assessee. Needless to say the assessee be given an appropriate opportunity of hearing before passing fresh order
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 27.06.2024.