RAJ KISHORE UPADHYAY,GOPALGANJ vs. ITO WARD- SIWAN, SIWAN

Brief facts of the case are that the assessee did not file any return. The ld. Assessing Officer has issued a notice under section 148 of the Income Tax Act electronically and served upon the assessee through its e-filing account in the e-filing portal on 26.03.2021. According to the ld. Assessing Officer, the assessee failed to respond to the notice requiring him to filing the return. The ld. Assessing Officer has passed the assessment order under section 144 read with section 147 of the Income Tax Act. He was of the view that assessee has deposited cash amounting to Rs.2,23,88,245/- in his Bank account. Accordingly he made the addition.

Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee. The ld. CIT(Appeals) was of the view that as per section 249(4)(b), if an assessee failed to file his regular return, then, he will be required to pay

S.A. No.06/PAT/2023 (A.Y. 2017-18) (in A.Y. 2017-2018 Raj Kishore Upadhyay tax on the assessed income equivalent to the advance tax required to be paid by the assessee on that assessed income. Otherwise, if an assessee has filed return under section 139(1), then, he was required to pay agreed tax on voluntarily returned income. Therefore, ld. CIT(Appeals) has dismissed the appeal as infructuous. After perusal of both these orders, during the course of hearing we prima facie found that both the orders are not sustainable. Therefore, instead of deciding the said application alone, we took the appeal for hearing.

The ld. 1st Appellate Authority has failed to comprehend the true interpretation of section 249(4). This section provides that if an assessee has filed return of income and failed to pay the tax due on the income returned by him. He further observed that under clause (b) a condition has been provided that where no return has been filed by the assessee, the assessee was required to pay an amount equal to the amount of advance tax, which was payable by him on the assessed income. But in a given case, ld. 1st Appellate Authority would exempt the assessee from the operation of the provisions of this clause. The ld. CIT(Appeals) was of the view that as per section 208 read with section 234B, the assessee was required to pay advance tax on this income determined by the ld. Assessing Officer and since the assessee failed 3

The ld. Counsel for the assessee has submitted that the assessee is a School Teacher. He was not maintaining the Bank account as observed by the ld. Assessing Officer. Under some error committed by the Bank, his Permanent Account No. has been included in some other accounts and hence the addition has been made. According to the assessee, the ld. Assessing Officer failed to carry out complete exercise by calling of the details from the Bank, whether this account pertains to the assessee or not.

On the other hand, ld. D.R. contended that it was for the assessee to demonstrate that this account does not belong to him. Once Assessing Officer received information from the Annual Information Report Wing, he was bound to act as per the law. It is the assessee, who failed to submit any details before the ld. Assessing Officer or appear before him to explain the issue.

We have duly considered the rival contentions and gone through the record carefully. We find that attempts made by the ld. 1st Appellate Authority are gross misuse of its power and it is not adjudication with the justice 4

Though the ld. Assessing Officer has passed an ex- parte order but instead of making efforts as provided under section 144 of the Income Tax Act, he simply treated the information coming to his possession as a gospel truth without cross verifying the facts. In this manner, he has not only lost the valuable time for taxing the correct person, but unnecessarily burdened a person by a tax liability. Therefore, we are of the view that the impugned orders are not sustainable. We remit this issue to the file of ld. Assessing Officer for re-adjudication. The ld. Assessing Officer is directed to call for a complete record from the Bank authority including the account opening form, details of nominees, details of cheque book, if any, issued and thereafter determine as to how the assessee is to be treated as owner of this Bank 5

With the above direction, the appeal of the assessee is allowed for statistical purposes.

In the result, the Stay Application of the assessee is dismissed and appeal of the assessee is allowed for statistical purposes.