Case Law Details
Hingora Ali Mohd Vali Mohd Vs ITO (ITAT Pune)
Income Tax Appellate Tribunal (ITAT) Pune heard an appeal by Hingora Ali Mohd Vali Mohd against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], which dismissed the appeal due to non-payment of advance tax under Section 249(4) of the Income-tax Act, 1961. The case pertained to Assessment Year 2017-18, with the assessee challenging multiple additions made by the Assessing Officer (AO), including a ₹6,20,000 cash deposit during the demonetization period, business income computation under Section 44AD, and estimated additions based on turnover. The CIT(A) had dismissed the appeal on procedural grounds without considering the case’s merits.
Upon review, ITAT noted that the assessee, a senior citizen, had paid advance tax of ₹4,000 and self-assessment tax of ₹1,750 but had a minor shortfall. Given that tax estimations may have variations, the tribunal emphasized that the CIT(A) had discretionary power under the proviso to Section 249(4) to admit the appeal. The ITAT found the assessee’s explanation reasonable, considering health issues and subsequent tax payments. The tribunal ruled that the CIT(A) should take a lenient approach and decide the appeal based on its merits. As a result, ITAT set aside the dismissal order and directed CIT(A) to provide the assessee with a hearing opportunity and review the case with relevant documents. The appeal was thus allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT PUNE
This is an appeal filed by the assessee against the order of ld. Commissioner of Income Tax(Appeals)[NFAC] passed under section 250 of the Income-tax Act, 1961 for Assessment Year 2017-18; dated 14.08.2024, emanating from assessment order under section 144 of the Act, dated 27.12.2019. The Assessee has raised the following grounds of appeal :
“1. In the facts and circumstances of the case and in law the Ld. CIT(A) erred in dismissing the appeal as non-admitted u/s 249(4) of the Act.
2. In the facts circumstances of the case and in law the Ld. CIT(A) erred in not appreciating the fact and law that the liability to pay advance tax as per section 208 arises only when the tax payable is Rs.10,000 and more.
3. In the facts circumstances of the case and in law the Ld. CIT(A) ought to have taken a liberal view that the appellant is not liable for payment of advance tax but for shortfall is Rs.285 and erred in dismissing the appeal without considering the merits.
4. In the facts circumstances of the case and in law the Ld.AO erred in making the addition of Rs.6,20,000 on account of cash deposited in Bank during the period 08.11.2016 to 19.11.2016 demonetisation period holding it as unexplained cash deposit.
5. In the facts circumstances of the case and in law the ld.AO erred in making the addition and erred in not appreciating the fact that the appellant is engaged in carrying on business of grading and regrading and packing of Cashew Kernels. The income is computed u/s 44AD and the cash deposited is from business source.
6. In the facts circumstances of the case and in law the Ld.AO erred in not appreciating that the appellant is liable for sales tax. He has paid sales tax and furnished the details of sales, purchase etc. When the other financial results are accepted, the cash deposited cannot be held as unexplained.
7. In the facts circumstances of the case and in law the Ld.AO erred in making estimated addition @8% of turnover of Rs.1,05,23,217 which comes to Rs.8,41,857 over and above the cash deposited in bank during the period 08.11.2016 to 19.11.2016.
8. In the facts circumstances of the case and in law the ld.AO erred in initiating penalty u/s 271AAC and u/s.270A.
9. The appellant seeks any other relief in the facts and circumstances of the case and in law.
The appellant craves leave to add, alter, modify, omit and delete all or any of the grounds of appeal on or before hearing.”
Findings & Analysis :
2. We have heard both parties and perused the records. It is observed that ld. CIT(A) has dismissed the appeal of the assessee in limine on the ground that assessee has not paid advance tax, hence assessee’s appeal was dismissed under section 249(4) of the Act.
2.1 On perusal of the paper book filed by the assessee, it is observed that assessee had paid advance tax of Rs.4,000/- on 30.12.2016 and self-assessment tax of Rs.1,750/- on 07.08.2017. Copies of the challans are on record. Advance tax is the tax payable on the estimated total income of the relevant financial year, which is chargeable to tax in the assessment year but is payable in that very financial year. A catena of decisions by various Hon’ble High Courts has reiterated that the advance tax payable under chapter XVII is based on an estimate of the total income of the assessee. An estimate always has an element of guess work. There could be various reasons due to which an estimate may be faulty and inaccurate which is why, there is a provision for payment of interest on deficient or excess payment of advance tax when there is variation between advance tax paid and actual liability to tax.
2.2 In this case, admittedly, assessee has not filed Return of Income. Assessment Order was passed under section 144 of the Act on 27.12.2019. Assessee’s case falls under section 249(4)(b) of the Act. The proviso to section 249(4) also gives a discretion to the ld. Commissioner of Tax (Appeal) to admit the appeal even if advance tax is not paid when assessee is able to show sufficient reason. In this case, admittedly assessee is a Senior Citizen. During the period, assessee was suffering from illness. Assessee had estimated his tax liability and paid the advance tax as per his estimation. It is a fact that there is a shortfall of advance tax, but estimations may go wrong. In this case, it has been submitted by the ld.AR that the shortfall advance tax has been paid by the assessee subsequently. In these facts and circumstances of the case, we are of the opinion that a lenient view needs to be taken as Assessee is a Senior Citizen. Therefore, we set-aside the order of ld. CIT(A) to ld. CIT(A) to decide the appeal on merits. CIT(A) shall provide opportunity of hearing to the assessee. Assessee shall provide necessary documents before the ld. CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
3. In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 10th January, 2025.
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