GOLI PICHAIAH,GUNTUR vs. INCOME TAX OFFICER, WARD-2(3), GUNTUR

The brief facts are that, the Assessing Officer (“AO” for short) vide order dated 07.12.2019 had made an addition of Rs. 20,00,000/- under section 69A of I.T.A.No.443/VIZ/2024 Goli Pichaiah the said Act as “Unexplained Money” which was the deposit allegedly made by the Appellant in his bank account, during the demonetization period. The Appellant is a non-filer for the relevant assessment year. The Appellant challenged the said order of the AO before the Ld.CIT(A). The Ld.CIT(A) has noticed that the appeal could not be admitted unless there is a compliance of section 249(4)(b) of the Act as the Appellant having failed to deposit the advance tax which was payable on the assessed income.

We have heard the Ld. AR for the Appellant and Ld.DR for the respondent, with their assistance we have gone through the record.

It is submitted by the Ld.AR that the Appellant had no income during the relevant period and as such the provisions of section 249(4)(b) of the Act cannot be called into aid. Reliance in this regard is placed on the decision of the Coordinate Bench of this Tribunal in decided on 10.09.2024 (Sree Sai Sameera Pharmacy v. ITO, Ward-1(1), Vijayawada). It is submitted that in similar circumstances this Tribunal has found that the provisions of section 249(4)(b) of the Act would not be applicable.

Ld. Sr. AR on behalf of the Revenue, submitted that the decision in Sree Sai Sameera Pharmacy v. ITO (supra) is distinguishable on the facts in as-much-as in that case, subsequently the assessee had filed the return of income showing taxable income as NIL and had also produced the Profit and Loss Account in order to ascertain that there was no taxable income. Page No. 2

I.T.A.No.443/VIZ/2024 Goli Pichaiah 6. We have considered the submissions made. Section 249(4)(b) of the Act, read as under: - “S.249(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 (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 Joint Commissioner (Appeals) or 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.”

It can thus be seen that Clause (b) of sub-section 4 of section 249 of the Act would apply where no return has been filed by the assessee. However, at the same time the payment of advance tax would also always be subject to there being a taxable income which according to the assessee he had not earned any taxable income. It is true that in the case of Sree Sai Sameera Pharmacy v. ITO (supra) subsequently the return was filed. However, what essentially Coordinate Bench has held that when the assessee had no taxable income, the question of being the advance tax does not arise and in such case the provisions of section 249(4)(b) of the Act would not be applicable. In the given circumstances, it would be appropriate if the Ld.CIT(A) decides the appeal on its own merits and in accordance with law. The appeal is therefore partly allowed, the impugned order is set-aside. The appeal is restored back to the file of the Ld.CIT(A) for disposal according to law and on merits of the challenged Page No. 3

I.T.A.No.443/VIZ/2024 Goli Pichaiah impugned addition made under section 69A of the Act by providing one more opportunity to the assessee. The assessee shall cooperate for appropriate disposal of the appeal. The Appeal is disposed off in the aforesaid terms.

In the result, appeal of the assessee is partly allowed in the aforesaid terms.