Haribabu Yenuganti Vs ITO (ITAT Hyderabad)
Hyderabad ITAT Restores Appeal to CIT(A) — Opportunity Must Be Given Before Rejecting Appeal for Non-Compliance with s.249(4)(b):
Hyderabad Tribunal examined the legality of dismissal of an appeal by the CIT(A)/NFAC on the ground that the Assessee had not deposited “advance tax equivalent” as mandated under section 249(4)(b) where no return had been filed. AO had reopened the case u/s 147 & completed the assessment u/s 147 r.w.s 144/144B, determining income at Rs. 62,94,561/- by making additions of cash deposits u/s 69A, estimated profit on bank credits, & remuneration income.
CIT(A) dismissed the appeal as “not maintainable” solely because Assessee had not paid the amount of advance tax required under s.249(4)(b), nor filed a separate exemption request under the proviso to that section. Assessee had simply stated “Not applicable” at Sl.9 of Form-35 without explaining why the requirement did not apply.
Tribunal held that though s.249(4)(b) mandates pre-deposit, the proviso empowers CIT(A) to exempt Assessee for good & sufficient reasons. Assessee had a bona fide belief that no advance tax was payable as he believed he had no taxable income. This misunderstanding explained why no exemption application was filed. Tribunal found that CIT(A) should have called for a clarification instead of dismissing the appeal outright, thereby denying Assessee an opportunity to explain why exemption should be granted.
