SRINIVAS GADHE,WARANGAL vs. INCOME TAX OFFICER, WARD-1, WARANGAL

At the outset, we find that there is a delay of 229 days in filing of the appeal by the assessee for which a petition for condonation of delay along with an affidavit explaining the reasons for such delay in filing of the appeal was filed. After hearing both the sides and considering the relevant reasons given by the appellant for not filing the appeal in time, we are of the considered view that the reasons given by the appellant that the order of the learned CIT (A) was communicated to wrong email address appears to be reasonable and bonafide. Thus, we condone the delay in filing of the appeal and admit the appeal for adjudication.

The brief facts of the case are that the assessee is an individual and has not filed his return of income for the A.Y 2017- 18. Notice u/s 14291) of the I.T. Act, 1961 dated 14.03.2018 was issued and called upon the assessee to furnish the return of income in respect of which the assessee is assessable under the Act. The said notice was served on the assessee through email id available in the earlier return of income filed. The assessee neither appeared nor filed any return of income. The assessee also failed to explain the source for cash deposits during the demonetization period. Therefore, the Assessing Officer passed the best judgment assessment order u/s 144 of the I.T. Act, 1961 and determined the total income of the assessee at Rs.10,44,768/- by estimating 8% profit on gross sales and addition of Rs.10.00 lakhs towards cash deposit u/s 69A of the I.T. Act, 1961 r.w.s. 115BBE of the Act.

Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT (A). The learned CIT (A) dismissed the appeal filed by the assessee on technical ground by invoking the provisions of section 249(4)(b) of the I.T. Act, 1961 on the ground that the assessee has failed to pay advance tax equal to the amount of tax payable for the relevant A.Y.

Aggrieved by the order of the learned CIT (A), the assessee is in appeal before us.

The learned Counsel for the assessee submitted that the learned CIT (A) erred in dismissing the appeal filed by the assessee on totally technical ground by invoking the provisions of section 249(4)(b) of the Act, without appreciating the fact that the assessee does not have taxable income for the A.Y 2017-18 and thus, the question of payment of advance tax does not arise and for this reason, the learned CIT (A) should not have dismissed the appeal filed by the assessee.

The learned DR, on the other hand, supporting the orders of the learned CIT (A) submitted that the assessee is a non- filer and also not paid any advance tax even though he has taxable income of Rs.10,44,768/- which is evident from the assessment order passed by the Assessing Officer. Since the appellant has not paid advance tax, the learned CIT (A) has rightly dismissed the appeal filed by the assessee and the order of the learned CIT (A) should be upheld.

I have heard both the parties, perused the material available on record and gone through the orders of the authorities below. It is the case of the assessee that his taxable income for the A.Y in question does not exceed the maximum amount which is chargeable to tax for payment of advance tax. Since the taxable income for the A.Y in question does not exceed the maximum amount of income chargeable to tax, the assessee did not pay any advance tax. I find that the assessee has filed the relevant evidences including the necessary bank statement and argued that the total taxable income of the assessee for the A.Y in question is less than the taxable limit. Once the assessee claims that his income is below the taxable limit, then the learned CIT (A) cannot dismiss the appeal by invoking the provisions of section 249(4)(b) of the Act, unless he proves that the appellant income for the relevant A.Y is in excess of the amount of income liable for tax. Even assuming for a moment, the assessee is having income which is in excess of maximum amount liable for tax, still he can move an application in this behalf before the Jt. Commissioner of Appeals or Commissioner of Income Tax (A), for the good and sufficient reasons to be recorded in writing exempt him from operation of provision of clause (b) of sub-section (4) of section 249 of the I.T. Act, 1961. Since the learned CIT (A) dismissed the appeal filed by the assessee, without following due procedure provided under the Act, in my considered view, the issue needs to go back to the file of the learned CIT (A) for fresh adjudication. Thus, I set aside the order passed by the learned CIT (A) and restore the issue in light of the argument of the assessee that it does not require to pay advance tax, because of his income below the maximum amount liable for tax for the impugned A.Y in light of any evidences, that may be filed by the assessee and decide the issue in accordance with law.