2021 (6) TMI 1135 - AT - Income Tax

Dismissal of appeal by CIT-A as non effective - CIT-A held appeal filed by the appellant as not maintainable - applicability of the provisions of section 249(4)(b) - CIT (A) ought to have given the assessee an opportunity to explain her case - Whether Commissioner of Income-Tax (Appeals) erred in holding that the appellant is liable to pay any advance tax and that there was failure as mentioned in Sec.249(4)(b) - HELD THAT - We find that the provisions of section 249(4)(b) are applicable to the case on hand since the assessee has not filed the return of income, nor has paid the advance tax payable by her. Therefore, she ought to have filed an application under the proviso to section 249(4)(b) of the Act for exemption from the application of section 249(4)(b) of the Act. In such circumstances, The CIT (A) had no choice but to dismiss the appeal as it was defective. Purely in the interest of justice and taking the prayer of the assessee into consideration, we set aside the issue to the file of the CIT (A) with a direction to the assessee to file the application under the proviso to section 249(4)(b) of the Act within a period of one month from the date of receipt of this order and thereafter, the CIT (A) shall dispose of such application of the assessee and decide on the issue of exemption from the application of the provisions of section 249(4)(b) and thereafter, the CIT (A) shall also decide the appeal on merits. Needless to mention that the assessee shall be given a fair opportunity of hearing. Assessee s appeal is treated as allowed for statistical purposes.

Summary

Issues:
1. Maintainability of the appeal under section 249(4)(b) of the Income Tax Act.
2. Exemption under section 54F of the Income Tax Act.
3. Opportunity for the assessee to explain her case before dismissal of the appeal.

Analysis:
1. The appeal before the Appellate Tribunal concerned the assessment year 2010-11 and was filed by the legal heir of the deceased assessee against the order of the CIT (A). The Assessing Officer had reopened the assessment as the assessee had not declared capital gains from a development agreement. The CIT (A) dismissed the appeal on the grounds that the assessee did not file the return of income or pay advance tax, rendering the appeal not maintainable under section 249(4)(b) of the Act.

2. The assessee contended that she was eligible for exemption under section 54F of the Act and challenged the computation of long-term capital gains by the Assessing Officer. The Tribunal acknowledged the grounds raised by the assessee and directed her to file an application under the proviso to section 249(4)(b) within a month. The Tribunal emphasized that the CIT (A) should consider the application for exemption and decide the appeal on its merits, ensuring a fair opportunity for the assessee to present her case.

3. The Tribunal noted the argument of the assessee's counsel regarding the lack of opportunity given by the CIT (A) to explain the case before dismissing the appeal. In the interest of justice, the Tribunal set aside the issue to the file of the CIT (A) with directions for the assessee to file the necessary application and for the CIT (A) to decide on the exemption application and the appeal on merits, providing a fair hearing to the assessee.

In conclusion, the Tribunal allowed the appeal for statistical purposes, highlighting the importance of procedural fairness and adherence to legal requirements in tax assessment matters.