Vijaya Ragava Sai Kumar Jannumahanty Vs ITO (ITAT Visakhapatnam)
Summary: The Visakhapatnam Bench of the Income Tax Appellate Tribunal considered two appeals filed by Vijaya Ragava Sai Kumar Jannumahanty for AY 2018-19 arising from orders of the CIT(A), National Faceless Appeal Centre, Delhi. The first appeal, ITA No. 834/Viz/2025, challenged the dismissal of the assessee’s quantum appeal under section 249(4) of the Income-tax Act, 1961, while ITA No. 50/Viz/2026 concerned the penalty imposed under section 270A. Since a common issue was involved, both appeals were disposed of through a consolidated order.
The reassessment arose from information that the assessee had received salary of Rs.26,97,623/- from the Sub-Treasury Office, Paderu during the relevant year, on which tax had been deducted at source under section 192, but that no return of income had been filed. The Assessing Officer initiated proceedings under section 147, passed an order under section 148A(d) dated 01.04.2022 and issued notice under section 148 dated 03.04.2022. The assessee did not comply with the notice or subsequently issued notices under section 142(1).
The Assessing Officer thereafter passed an order under section 147 read with section 144 dated 28.03.2024 and determined income at Rs.26,97,263/- after making an addition of the salary income. The assessee appealed to the CIT(A), but the CIT(A) did not admit the appeal because the assessee had neither filed a return under section 139(1) nor, in response to the section 148 notice, paid an amount equivalent to the advance tax said to be payable under section 249(4)(b).
Before the Tribunal, the assessee contended that he was a State Government employee who had inadvertently failed to file the return and had bona fide believed that his tax liability had already been discharged through TDS. In Form-35, he had stated that the requirement under section 249(4)(b) was “Not applicable”. He argued that the CIT(A) should have called for an explanation rather than summarily dismissing the appeal. However, in response to a specific query from the Bench, the assessee’s authorised representative acknowledged that no application had been filed before the CIT(A) under the proviso to section 249(4)(b) seeking exemption from its operation.
The Department supported the CIT(A)’s action on the ground that the assessee had failed to file the application contemplated by the proviso.
The Tribunal examined section 249(4)(b), which requires, where no return has been filed, payment of an amount equal to the advance tax payable before an appeal can be admitted, while its proviso permits exemption for good and sufficient reasons on an application made by the appellant.
The Tribunal observed that the assessee’s case fell within clause (b) because no return had been filed. It then considered section 209, concerning computation of advance tax. Neither the Assessing Officer nor the assessee had calculated the advance tax in the manner contemplated by section 209(1). The Tribunal therefore held that the assessee’s claim that his only income was salary subjected to TDS under section 192 and that he had no advance-tax liability could not have been summarily discarded by the CIT(A).
At the same time, the Tribunal noted that the assessee himself had failed to comply with the proviso to section 249(4)(b), under which an application should have been filed before the CIT(A) seeking exemption. Consequently, the Tribunal did not finally determine whether section 249(4)(b) was applicable or whether the assessee was liable to pay advance tax.
Instead, the Tribunal set aside the matter to the file of the CIT(A). The CIT(A) was directed to reconsider the appeal after taking cognizance of the assessee’s specific claim that no obligation existed to estimate and pay advance tax under section 249(4)(b), and to afford the assessee an opportunity of being heard. If the CIT(A) found the provision inapplicable, or if exemption was granted pursuant to an application under the proviso, the CIT(A) was directed to dispose of the appeal on merits. The quantum appeal was accordingly allowed for statistical purposes.
The connected penalty appeal under section 270A, which arose from the same reassessment order and the CIT(A)’s consequential order, was also set aside to the CIT(A). The Tribunal directed that the penalty appeal be decided after adjudication of the restored quantum appeal. The penalty appeal was likewise allowed for statistical purposes.
Ultimately, both appeals were allowed for statistical purposes in terms of the Tribunal’s observations. The Tribunal therefore provided a fresh opportunity for examination of the section 249(4)(b) issue and, if the appeal was found maintainable, adjudication of the substantive issues.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
1. The present appeals filed by the assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, “CIT(A)”), dated 17/10/2025 and 29/09/2025, which in turn arises from the respective orders passed by the Assessing Officer (for short, “AO”) under section 147 r.w.s 144 of the Income Tax Act, 1961 (for short, “the Act”), dated 28/03/2024 and under section 270A of the Act, dated 18/09/2024. As a common issue is involved in the captioned appeals, the same are being taken up and disposed of vide a consolidated order. We shall first take up the appeal filed by the assessee in ITA No.834/Viz/2025, wherein the impugned order has been assailed by the assessee on the following grounds of appeal:
“1. That under the facts and circumstances of the case, the order passed u/s 147 r.w.s 144B IT Act dt: 28.03.2024, which was upheld by the Ld. CIT(A), NFAC vide order passed u/s 250 of the I.T. Act dt: 17.10.2025 is not in accordance with the facts of the case and the provisions of law.
2. The learned CIT(A) erred in dismissing the appeal in limine by invoking the provisions of section 249(4) of the Income-tax Act, 1961, without appreciating that the said provision has no application to the facts of the assessee’s case.
3. The learned CIT(A) misdirected himself in law in applying section 249(4) and consequently rejecting the appeal on a technical ground, rendering the impugned finding invalid, unsustainable, and bad in law.
4. That the learned CIT(A) erred in not adjudicating the legal ground challenging the validity of notices issued under sections 148A(b), 148A(d) and 148, and further passing the assessment order, all by JAO, which were issued in violation of sections 144B, 130 and 151A of the Income Tax Act, rendering the entire reassessment void ab initio.
5. That the learned CIT(A) violated the principles of natural justice by dismissing the appeal on technical grounds without adjudicating the Issues on merits, despite the appellant having challenged the validity of reopening and the additions made in the assessment.
6. The Ld. CIT(A) is not correct in confirming the entire amount of Rs. 26,97,623/- when the same does not pertain to the impugned assessment year and as well as the subject amount also includes Gratuity which is not liable for tax.
7. For these and other reasons that have to be urged at the time of hearing of the case the assessee prays that the addition made by the assessing officer and sustained by learned CIT(A) are to be deleted in the interest of Justice.”
2. Succinctly stated, the AO, based on information that the assessee during the subject year was in receipt of salary from the Sub-Treasury Office, Paderu of Rs.26,97,623/- on which tax was deducted at source under section 192 of the Act, but had not filed his return of income for the year under consideration, initiated proceedings under section 147 of the Act. Thereafter, the AO passed an order under section 148A(d) of the Act, dated 01/04/2022. Notice under section 148 of the Act, dated 03/04/2022, was issued to the assessee. However, the assessee failed to comply with the said notice and did not file his return of income in response thereto.
3. Thereafter, the AO vide his order passed under section 147 r.w.s 144 of the Act, dated 28/03/2024, in the absence of any compliance by the assessee to the notices issued under section 142(1) of the Act, determined his income at Rs.26,97,263/- after making an addition of the aforementioned salary income.
4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, as the assessee who had neither filed the return of income under section 139(1) of the Act, nor in response to the notice issued under section 148 of the Act had failed to pay an amount equivalent to the advance tax which was due on his income. i.e., as required per the mandate of section 249(4)(b) of the Act, the CIT(A) taking cognizance of the aforesaid material aspect refrained from admitting the appeal and dismissed the same.
5. The assessee, aggrieved with the order of the CIT(A), has carried the matter in appeal before us.
6. We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record.
7. Shri C Subrahmanyam, CA, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the CIT(A) had grossly erred in law and facts of the case by most arbitrarily declining to admit the appeal and dismissing the same. Elaborating on his contention, the Ld. AR submitted that the assessee is a State Government employee who, for the year under consideration, inadvertently omitted to file his return of income. The Ld. AR further submitted that though the assessee in the Memorandum of Appeal, i.e., “Form-35” had against the “Column No.9” wherein information was sought as to whether the amount equal to the amount of advance tax as per section 249(4)(b) had been paid, specifically stated that the same was “Not applicable”, but the CIT(A) had summarily brushed aside the same and wrongly observed that the assessee had failed to comply with the mandate of section 249(4)(b) of the Act. The Ld. AR submitted that the CIT(A) ought to have called for an explanation from the assessee instead of summarily treating him as being in default of the aforesaid statutory compliance and dismissing the appeal by treating the same as infructuous. However, the Ld. AR on a specific query by the Bench as to whether the assessee, as required per the “proviso” to section 249(4)(b) of the Act, had filed any application before the CIT(A) explaining as to why he be exempted from the operation of the said statutory provision, answered in the negative. The Ld. AR submitted that as the assessee remained under a bona fide belief that the tax liability on his salary income had already been recovered by deducting the tax at source (TDS), therefore, no obligation was cast upon him for either estimating the advance tax, much less payment of the said amount. The Ld. AR submitted that now when the assessee had specifically stated that obligation to pay any amount of advance tax as per section 249(4)(b) was not applicable in his case, then, there was no reason for the CIT(A) to have summarily discarded his said claim and dismiss the appeal as not maintainable for non-compliance of the said statutory provision. The Ld. AR submitted that the matter, in all fairness, be set aside to the file of the CIT(A), with a direction to admit the appeal and adjudicate it on the merits.
8. Per contra, Shri A.P. Babu, Learned Senior Departmental Representative (for short, “Ld. Sr-DR”), submitted that as the assessee had failed to file any application based on which he had sought for an exemption from the operation of the provisions of section 249(4)(b) of the Act as was mandatorily required by the “proviso” to section 249(4) of the Act, the CIT(A) had rightly dismissed the appeal as not maintainable.
9. We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the orders of the authorities below.
10. Before proceeding further, we deem it apposite to cull out the provisions of section 249(4) of the Act, as under:
“249. (1) to (3)………
(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,—
(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or
(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.”
11. Ostensibly, section 249(4) of the Act contemplates the conditions which are statutorily required to be satisfied failing which the appeal filed by an assessee before the CIT(A) shall not be admitted, viz., (a) where the assessee has filed a return of income, the tax due on the income returned by him has been paid; or (b) where the assessee has not filed any return of income, then an amount equal to the amount of advance tax which was payable by him has been paid. At this stage, we may herein observe that the second situation contemplated under clause (b) of section 249, i.e., a case where the assessee has not filed the return of income comes with a concession as per which on an application made by the assessee/appellant, the Commissioner (Appeals), for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause. Accordingly, in a case where the assessee has not filed any return of income, then he, though, remains under an obligation to pay an amount equal to the amount of advance tax which was payable by him, but the CIT(A) may, for any good and sufficient reason given by an assessee by filing an application, dispense with the satisfaction of the said pre-condition. However, the said concession is available only for cases falling within the meaning of clause (b).
12. As in the case before us, the assessee had failed to file his return of income; therefore, his case is regulated by clause (b) of section 249(4) of the Act.
13. Controversy involved in the present case lies in a narrow compass, i.e., as to whether or not the CIT(A) is right in law and facts of the case in observing that the assessee/appellant was required to pay an amount equal to the advance tax which was due on his assessed income despite the fact that tax was deducted at source from his salary income, i.e., the only steam of income as admitted by the AO in his order passed under section 147 r.w.s. 144 of the Act, dated 28/03/2024?
14. In our view, the answer to the aforesaid issue would require adverting to section 209 of the Act, which contemplates the “computation of advance tax”. We find that section 209(1) of the Act envisages the determination of the amount of advance tax payable by the assessee. We find on a careful perusal of section 209(1) of the Act that the same encompasses two situations, viz., (i) where the computation of the advance tax is based on the estimation of the current income and the income tax by the assessee; and (ii) where the calculation of the advance tax is made by the AO. Admittedly, in the case before us, there has been no calculation of the advance tax by the AO as provided in section 209(1)(b) of the Act. Also, we find that there has been no calculation made by the assessee for the purpose of payment of advance tax as contemplated in section 209(1)(a) of the Act.
15. Considering the aforesaid fact, that there has been no calculation of the advance tax payable either by the assessee or by the AO, we are of the view that the claim of the assessee that except for his salary income which had already been subjected to deduction of tax at source under section 192 of the Act, he had no other income chargeable to tax for the subject year and he was not liable for any advance tax liability could not have been summarily discarded by the CIT(A). In our view, the CIT(A), instead of calling for an explanation from the assessee as to why the obligation to pay an amount equal to the amount of advance tax as per section 249(4)(b) of the Act was not applicable in his case, had, however, erred in summarily discarding the same. At the same time, we cannot also remain oblivion of the fact that the assessee had failed to comply with the obligation that was cast upon him as per the “proviso” to section 249(4) of the Act, where he ought to have filed an application before the CIT(A) based on which he had claimed that the obligation under section 249(4)(b) of the Act was not applicable in his case.
16. Be that as it may, we are of a firm conviction that in the totality of the facts involved in the present case, the matter requires to be set aside to the file of the CIT(A) who is directed to redecide the appeal taking cognizance of the fact that the assessee had specifically claimed before him that no obligation was cast upon him to estimate the amount of advance tax and pay the same per the mandate of section 249(4)(b) of the Act. Needless to say, the CIT(A) shall, in the course of the set-aside proceedings, afford an opportunity of being heard to the assessee regarding his claim that the provisions of section 249(4)(b) of the Act were not applicable to his case. In case the CIT(A) finds favor with the claim of the assessee that the provisions of section 249(4)(b) were not applicable in his case, or on an application filed by the assessee exempts him from the operation of section 249(4)(b), then he shall dispose of the appeal on the merits. We thus, in terms of our aforesaid observations, set aside the matter to the file of the CIT(A) in terms of our aforesaid observations.
17. In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.
18. We shall now deal with the appeal filed by the assessee, which in turn arises from the order passed by the CIT(A), NFAC, Delhi, dated 29/09/2025, wherein he has assailed the penalty imposed by the AO under section 270A of the Act vide his order dated 18/09/2024.
19. As we have while disposing of the assessee’s quantum appeal in ITA No.834/Viz/2025, set aside the matter to the file of the CIT(A) with a direction to re-decide the appeal, therefore, the present appeal wherein the assessee has assailed the order of the CIT(A) approving the penalty imposed under section 270A of the Act, which in turn finds its genesis in the aforesaid assessment order passed by the AO under section 147 r.w.s 144 of the Act, dated 28/03/2024 is also set aside to the file of the CIT(A) with a direction to decide the same after adjudicating the quantum appeal as had been restored to his file.
20. Resultantly, the appeal filed by the assessee in ITA No.50/Viz/2026 is allowed for statistical purposes.
21. Ex-consequenti, both the appeals filed by the assessee are allowed for statistical purposes in terms of our aforesaid observations.
Order pronounced in open court on 17th July, 2026.
