Case Law Details
Mohammad Amjad Ali Sahaji Vs ITO (ITAT Kolkata)
Income Tax Appellate Tribunal (ITAT) Kolkata heard the appeal of Mohammad Amjad Ali Sahaji against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, for the assessment year 2017-18. The appeal arose from an assessment order passed under Section 144 of the Income-tax Act, 1961, which was issued after the assessee failed to file a return in response to a notice under Section 142(1). The Assessing Officer determined a total income of Rs. 24,27,435/-, leading the assessee to appeal. However, the CIT(A) dismissed the appeal citing Section 249(4)(b), which requires the payment of advance tax before an appeal can be admitted. The CIT(A) noted that the assessee neither paid the advance tax nor applied for an exemption under the proviso to Section 249(4)(b).
Upon review, ITAT Kolkata found that the CIT(A) had not specified whether the assessee was liable for advance tax under Section 208. The assessee contended that his income was below the taxable limit, making advance tax inapplicable. The tribunal observed that the CIT(A) had not examined the merits of the case and had not considered the possibility of granting an exemption. ITAT Kolkata set aside the order and remanded the case for fresh consideration. It directed the CIT(A) to provide the assessee with an opportunity to file an application for exemption and to submit necessary evidence. The appeal was thus allowed for statistical purposes, ensuring that the matter would be reconsidered with due process and a fair hearing.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeal filed by the assessee pertaining to the AY 2017-18 is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as ld. ‘CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (in short, ‘the Act’) dated 23.02.2024 arising out of the assessment order framed u/s 144 of the Act dated 10.12.2019.
2. The assessee is in appeal before the Tribunal raising the following grounds of appeal as annexed to the memo of appeal:
“GROUND NO. 1:- For the facts and circumstances of the case, the CIT Appeal(NFAC) has eared in law and also in merit while he passed the purported order/orders. He pointed out a deficiency that the appellant filed appeal before him in Form 35 and thereafter deficiency letters were issued on 05/02/2024 on the point of, “Tax on returned income not paid/particulars of payment not mentioned” on the view of section 249(4) of the Income Tax Act.
He also pointed out that the appellant submitted response in view of the said deficiency notice and stated inter-alia the facts and circumstances of the case.
GROUND NO. 2:- That your appellant beg to submit that the CIT appeal failed to understand the submission of the appellant that when the income of the appellant was below the taxable quantum during the period under appeal, there is no question to pay tax or advance tax. Hence, appellant filed “not applicable” in the said column of Form 35.
GROUND NO 3:- That in view of the notice issued by the appellant, your appellant submitted his submission through portal before the CIT, but in which reason the said submission was not entertained by the CIT.
GROUND NO 4:- That the CIT appeal failed to provide any other opportunity to the appellant. It is also stated that section 249(4)(b) of the Act, is not applicable upon the appellant. He failed to provide adequate and sufficient opportunity of being heard. He ignoring the procedure and application of NATURAL JUSTICE AND EQUILITY upon the appellant. He at least given a single opportunity before passing his purported order.
GROUND NO. 5:- CIT (Appeal) dismissed the appeal of the appellant only for STATISTICAL PURPOSES. He did not go through the merit of the case. Without findings the merit of the case passed his order which is injustice, unreasonable, and not according to the natural justice and equality.”
3. Brief facts of the case of are that during the demonetization period and also during the financial year corresponding to AY 2017-18, the assessee had made huge cash deposit in his bank account and did not file his return of income even in response to the notice u/s 142(1) of the Act. The Assessing Officer (hereinafter referred to as ‘AO’) made the assessment at the total income of Rs. 24,27,435/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal by holding as under:
“2.8. As per section 249(4)(b) of the Act, the appeal shall not be admitted, unless the appellant has paid an amount equal to the amount of advance tax which was payable. Moreover, the appellant has also not made an application as per the Proviso to Section 249(4). As the applicable advance tax has not been paid by the appellant before filing of the present appeal and the appellant has not made application as per the proviso, the present appeal shall not be admitted. In the present appeal, it is held that the appellant has not complied with the provisions of section 249(4)(b) of the Act and hence the appeal is not admitted and is also treated as dismissed.”
3.1 Aggrieved with the order of Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
4. Rival contentions were heard and the record and the submissions made were Before adjudicating the appeal, it is important to refer to the provisions of Section 249(4)(b) of the Act, which is relied upon by the Ld. CIT(A) while dismissing the appeal and which is as under:
“249(4)(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.”
4.1 As per the proviso thereof, there is an option available to the assessee to file an application before the Ld. CIT(A) who may dispense with the requirement of payment of advanced tax on the basis of facts. Apparently, no such application was filed by the assessee and, therefore, the appeal was dismissed.
4.2 However, the liability to pay the advance tax is determined by the provisions of Chapter XVII-C relating to Advance payment of tax is governed by the provisions of section 208 as per which advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions in this regard is Rs. 10,000/- or more. Further, Section 209 of the Act r.w.s. 210 specifies the manner of computation of advance tax, section 209(1) of which is reproduced as under:
“209. (1) The amount of advance tax payable by an assessee in the financial year shall, subject to the provisions of sub-sections (2) and (3), be computed as follows, namely :—
(a) where the calculation is made by the assessee for the purposes of payment of advance tax under sub-section (1) or sub-section (2) or sub- section (5) or sub-section (6) of section 210, he shall first estimate his current income and income-tax thereon shall be calculated at the rates in force in the financial year;
(b) where the calculation is made by the Assessing Officer for the purpose of making an order under sub-section (3) of section 210, the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment or the total income returned by the assessee in any return of income furnished by him for any subsequent previous year, whichever is higher, shall be taken and income-tax thereon shall be calculated at the rates in force in the financial year;
(c) where the calculation is made by the Assessing Officer for the purpose of making an amended order under sub-section (4) of section 210, the total income declared in the return furnished by the assessee for the later previous year, or, as the case may be, the total income in respect of which the regular assessment, referred to in that sub-section has been made, shall be taken and income-tax thereon shall be calculated at the rates in force in the financial year;
(d) the income-tax calculated under clause (a) or clause (b) or clause (c) shall, in each case, be reduced by the amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income (as computed before allowing any deductions admissible under this Act) which has been taken into account in computing the current income or, as the case may be, the total income aforesaid; and the amount of income-tax as so reduced shall be the advance tax payable:
Provided that for computing liability for advance tax, income-tax calculated under clause (a) or clause (b) or clause (c) shall not, in each case, be reduced by the aforesaid amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income, if the person responsible for deducting tax has paid or credited such income without deduction of tax or it has been received or debited by the person responsible for collecting tax without collection of such tax.”
4.3. The Ld. CIT(A) has not specified as to how much advance tax was payable or even whether the provisions of Section 208 of the Act was applicable to the assessee or On the contrary, the assessee contends that since the income was below the maximum amount not chargeable to tax, therefore, there was no question of payment of any advance tax. Further, the Ld. CIT(A) has not decided the appeal on the merits of the case. Hence, in view of the facts since the Ld. CIT(A) has not mentioned as to how much advance tax was payable by the assessee which has not been paid, and the assessee had the option of filing an application before the Ld. CIT(A), which however, was not filed and consequently the discretion available to the Ld. CIT(A) to exempt the assessee from the applicability of the rigours of section 249(4) could not be exercised by him and the appeal has also not been decided on merit, therefore, in the interest of justice, the order of the Ld. CIT(A) is set aside to be done afresh. The assessee may file an application for exemption from the requirement of payment of advance tax, which shall be decided by the Ld. CIT(A) in accordance with law and considering the totality of facts. The assessee shall also be at liberty to file necessary evidences in support of the relief claimed before the Ld. CIT(A) as per law. Needless to say, the assessee shall be given a reasonable opportunity of being heard and to make any further submissions he wants to make in support of the relief claimed. Accordingly, the grounds taken by the assessee in his appeal are allowed for statistical purposes.
5. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 13th January, 2025.
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