Lakhmi Chand Vs ITO (ITAT Agra)
Appeal Cannot Be Dismissed for Non-Payment of Advance Tax When Income Below Taxable Limit – Case Restored to CIT(A): ITAT Agra
Agra Bench of Tribunal dealt with the dismissal of an appeal by CIT(A) on the technical ground of non-payment of advance tax u/s 249(4)(b).
Assessee had deposited ₹63.32 lakh during demonetization in HDFC & Yes Bank accounts. He neither filed return u/s 139 nor complied with notices u/s 142(1). Consequently, the AO completed best judgment assessment u/s 144 & added the entire deposits as unexplained money u/s 69A r.w.s. 115BBE.
On appeal, CIT(A) refused to admit the appeal, holding it non-maintainable u/s 249(4)(b) since Assessee had not paid advance tax, treating this as a mandatory pre-condition.
Before Tribunal, it was argued that Assessee’s income was below the taxable limit, hence no advance tax liability arose u/s 208 & 209. Therefore, section 249(4)(b) had no application. Further, the assessee had expired in 2017, but assessment & appellate orders were passed in his name without bringing legal heirs on record. Reliance was placed on multiple ITAT decisions (Vishnusharan Chandravanshi, Dilip Hiralal Chaudhari, Ritika Jain, Neeraj Tripathi), where similar dismissals were set aside.
Tribunal observed that the obligation under section 249(4)(b) arises only when advance tax is payable. If the assessee’s income is below taxable limit, advance tax is NIL, & hence non-payment cannot be a bar to admission of appeal. Dismissal of appeal by CIT(A) was therefore erroneous. Tribunal emphasized that appellate authorities must adjudicate appeals on merits instead of rejecting them on hyper-technical grounds. CIT(A)’s dismissal was set aside. The matter was restored to CIT(A) with direction to admit the appeal & decide it on merits after giving reasonable opportunity of hearing.
