Case Law Details
Shashi Structural Engineers Private Limited Vs ACIT (ITAT Pune)
Introduction: In a landmark decision by the Income Tax Appellate Tribunal (ITAT) Pune, the case involving Shashi Structural Engineers Private Limited against the ACIT has gained attention in the tax circles. Central to this appeal was the question surrounding the adjustment of self-assessment tax against refunds by the Revenue.
Understanding Section 249(4): The crux of the appeal lies within the tenets of Section 249(4) of the Income-tax Act, 1961. It stipulates conditions under which an appeal can be filed, notably:
- When a return is filed by the assessee, the tax due on the returned income should be fully paid.
- If no return is filed, the assessee should pay an amount equivalent to the advance tax payable by him.
Background of the Appeal: The appeal by the assessee against the order by the CIT(A) for the assessment year 2017-18 was delayed by 85 days. Upon satisfactory explanation for the delay, ITAT decided to consider the appeal on its merits.
The Core Issue: The primary contention arose when the CIT(A) dismissed the appeal because the conditions under section 249(4) of the Act weren’t met. The tax due at the time of filing was more than what was paid as self-assessment tax. However, the representative of the assessee pointed out that the return for A.Y. 2022-23 showed a significant refund, which was used to adjust the tax dues for various years, including the year in question.
A Precedent Upheld: Drawing reference from a prior decision by the Hon’ble Karnataka High Court in the case of CIT Vs. K. Satish Kumar Singh, the ITAT highlighted that if the tax is paid later, an appeal dismissed due to a violation of section 249(4) can be revived. Since the tax due for the concerned year was offset by the refund from A.Y. 2022-23, the ITAT acknowledged that the appeal merits a review.
Conclusion: The ITAT Pune’s verdict underscores the essence of fairness in tax proceedings. The case exemplifies that timely tax payments, even if achieved through refunds, should allow for appeals to be considered on their merits. The ITAT has remanded the case back to CIT(A) to pass the order based on the appeal’s merits, ensuring the principles of justice are upheld.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee is directed against the order dt. 21-01-2023 passed by the CIT(A) in National Faceless Appeal Centre (NFAC) u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2017-18.
2. The appeal is time barred by 85 days. The assessee has filed an affidavit explaining the reasons for the delay. We are satisfied with the reasons so stated. Therefore, the delay is condoned and the appeal is admitted for disposal on merits.
3. We have heard both the sides and gone through the relevant material on record. Shorn off unnecessary details, it is seen that the assessee filed appeal before the ld. CIT(A) which was dismissed on the preliminary issue of the assessee not having satisfied the conditions of section 249(4) of the Act. The ld. CIT(A) observed that the tax payable as on the date of filing of the return of income was Rs.53,38,200/- and the assessee had paid only a sum of Rs.29,98,181/- as self-assessment tax. The ld. AR has brought to our notice the fact of the assessee’s return for the A.Y. 2022-23 having been processed on 14-04-2023 determining refund of Rs.1,03,68,414/-. Our attention has further been invited towards pages 66, 68 and 69 of the paper book showing the adjustment of refund for the A.Y. 2022-23 against the demand of the assessee for various years including the year under consideration. A sum of Rs.69,74,612/- has been adjusted in respect of the assessment year under consideration against the refund for the A.Y. 2022-2023. This shows that the amount of tax payable by the assessee with reference to the returned income for the year in appeal, now stands duly paid. The Hon’ble Karnataka High Court in CIT Vs. K. Satish Kumar Singh (2012) 02 KAR CK 0004 has held that where tax is paid subsequently, the appeal which was earlier dismissed by the first appellate authority for violation of section 249(4), gets revived. In view of the admitted factual position that the amount of tax payable by the assessee with reference to the returned income for the year under consideration now stands fully adjusted against the refund for the A.Y. 2022-23, we are satisfied that the assessee deserves disposal of its appeal on merits. We, therefore, set-aside the impugned order and direct the ld. CIT(A) to pass the order on merits of the appeal. Needless to say, the assessee will be allowed an opportunity of hearing.
4. In the result, the appeal is allowed for statistical purposes.
Order pronounced in the Open Court on 01st August, 2023.
