Case Law Details
Chandran Sarath Vs ACIT (Kerala High Court)
The case of Chandran Sarath Vs ACIT before the Kerala High Court involves the dismissal of an appeal on a technical ground related to non-compliance with a pre-condition for maintaining the appeal. The appellant, engaged in the cashew business, faced an assessment for the assessment years 2015-2016. The appeal was rejected by the First Appellate Authority due to non-compliance with a specific requirement regarding advance tax payment, prompting the appellant to approach the High Court.
The appellant indicated ‘not applicable’ in a section of the appeal form, leading to the rejection of the appeal by the First Appellate Authority. However, the High Court recognized the appellant’s inadvertent omission and the absence of assessable income during the assessment year in question. The appellant’s senior counsel argued for an opportunity to rectify the oversight and for the First Appellate Authority to reconsider the case on its merits. The High Court, after considering the submissions, set aside the order of the First Appellate Authority and directed them to consider the appellant’s application for waiver within a specified timeframe. Additionally, the Court mandated a personal hearing for the appellant to ensure fair consideration.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
This writ appeal impugns the judgment dated 20.03.2024 of a learned Single Judge in W.P(C)No.8758 of 2024.
2. Briefly stated the facts necessary for disposal of this writ appeal are as follows:
The appellant is an assessee under the provisions of the Income Tax Act,1961 (‘the Act’ for short). He is engaged in the business of buying and selling of cashew. The assessment for the assessment years 2015-2016 was completed under Section 147 read with Section 144 and 144B of the Act on 22.03.2022. The appellant was assessed to an escaped income of Rs.2,08,64,696/- on which amount tax and penalty was demanded. Aggrieved by the assessment order, the appellant preferred an appeal before the Appellate Authority (2nd respondent). In the format of the appeal, against Serial No.9 which required the appellant to indicate whether he had paid an amount equal to the amount of advance tax as per Section 249(4)(b) of the Act, as a pre-condition for maintaining the appeal, as he had not filed any return for the assessment years in question, the appellant had indicated ‘not applicable’. This led the First Appellate Authority to presume that the appellant was not claiming any waiver of the pre-condition as envisaged under the proviso to Section 249(4)(b). The appeal preferred by the appellant was therefore rejected on the technical ground that the appellant had not complied with the precondition for maintaining the appeal before the First Appellate Authority. It was the said order of the appellate authority that was impugned in the writ petition aforementioned.
3. When the writ petition came up for hearing before the learned Single Judge, the learned Single Judge found that against the order of the First Appellate Authority, the appellant had a remedy by way of filing a Second Appeal before the Appellate Tribunal. The writ petition was therefore dismissed without prejudice to the right of the appellant to approach the Appellate Tribunal against the order of the First Appellate authority.
4. We have heard Sri. Anil D Nair, learned Senior Counsel assisted by Sri. Aditya Unnikrishnan for the appellant and Sri.P.R. Ajithkumar, the learned Standing Counsel for the respondents.
5. On a consideration of the rival submissions, we find that this is a case where the Appellate Tribunal cannot really consider the case of the appellant on merits in an appeal preferred by the appellant against the order of the First Appellate Authority. This is because the First Appellate Authority dismissed the appeal preferred by the appellant against the assessment order on a technical ground of non compliance with a pre-condition for maintaining the appeal. We take note of the submission of the learned Senior Counsel for the appellant that the appellant had inadvertently omitted to prefer a formal application in terms of the proviso to Section 249(4)(b) and it was because of the said omission that the First Appellate Authority did not consider his case for waiver of the requirement of payment of an amount equal to the amount of advance tax that was payable by him. He would submit that if an opportunity is afforded to him at this stage, he would prefer an application in terms of the proviso to Section 249(4)(b) and the First Appellate Authority may be directed to consider the same on merits. We find force in the said submission of the learned Senior Counsel especially when it is the case of the appellant that there was no income that had accrued to him during the said assessment year that could have been subjected to tax.
6. In the result, we set aside Ext.P3 order of the First Appellate Authority (2nd respondent) and direct the 2nd respondent to consider the application to be preferred by the appellant in terms of the proviso to Section 249(4)(b), within a month from the date of receipt of the same from the appellant herein. On his part, the appellant shall take steps to file the said application in terms of the proviso to Section 249(4)(b) before the 2nd respondent within ten days from the date of receipt of a copy of this judgment. To enable the appellant to file the said application, the respondents shall ensure that the portal of the Income Tax Department is kept open to receive the said application within the aforesaid period of ten days granted in this judgment. The 2nd respondent shall also ensure that the appellant is afforded an opportunity of personal hearing in the virtual mode before passing orders on the waiver application preferred by the appellant.
The writ appeal is thus allowed as above.
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