2024 (4) TMI 406 - HC - Income Tax

Exemption from paying advance tax - Seeking permission to prosecute appeal against order of assessment without having to pay the advance tax u/s 249(4) - DR submitted that even in the year 2017-18, the petitioner has made substantial investments in immovable property while not filing a return of income or paying even the admitted tax in respect of the assessment year 2016-17, since the demand in order of assessment is in excess of Rs. 68 crores, a substantial amount will have to be remitted by the petitioner for maintaining the appeal. HELD THAT - Since it is not seriously disputed that the case of the petitioner falls under the proviso Section 249(4)(b) of the 1961 Act, Ext. P17 appeal filed by the petitioner against Ext. P15 order of assessment for the assessment year 2016-17 can be directed to be disposed of on merits after affording an opportunity of hearing to the petitioner on the condition that the petitioner remits a total sum of Rs 12 crores against the demands in Ext. P15 order of assessment. An amount of Rs. 11.75 crores shall be remitted by the petitioner in 8 equal monthly installments commencing from 15.04.2024. Subsequent installments shall be paid on or before the 15th day of the succeeding months. The petitioner shall remit a sum of Rs. 25 lakhs towards the demand in Ext. P15 on or before 31.03.2024. If the petitioner fails to remit the amounts as directed above, it will be open to the Department to proceed for recovery of amounts assessed in terms of Ext.P15. Since the above condition is to be satisfied for maintaining the appeal, it is directed that the appeal filed by the petitioner shall be taken up and adjudicated only after the entire amounts (Rs 12 crores) payable by the petitioner in terms of this judgment are paid, as directed.

Issues: Assessment under Section 147 r/w Section 144 and Section 144B of the Income Tax Act, 1961 for non-filing of return of income, application of Section 69 for unexplained investment, appeal under Faceless Appeal Scheme, 2021, exemption from paying advance tax under Section 249 of the 1961 Act.

Judgment Details:

1. The petitioner, a Private Limited Company in real estate, faced assessment proceedings for the year 2016-17 due to non-filing of income return, leading to an order under Section 147 r/w Section 144 and Section 144B of the Income Tax Act, 1961, citing unexplained investment under Section 69. The petitioner was taxed at a higher rate under Section 115 BBE.

2. The petitioner previously challenged the assessment order in a writ petition which was dismissed, directing the petitioner to pursue statutory remedies. The petitioner filed an appeal under the Faceless Appeal Scheme, 2021, seeking exemption from paying advance tax under Section 249 of the 1961 Act, given a demand of Rs. 68 crores in the assessment order.

3. The petitioner's counsel referred to Section 249(4)(b) of the 1961 Act, arguing for exemption from advance tax payment for the appeal.

4. The respondent Department highlighted substantial investments made by the petitioner in subsequent years without filing returns or paying taxes for the 2016-17 assessment year, with a demand exceeding Rs. 68 crores in the assessment order.

5. The Court acknowledged the petitioner's case falling under the proviso Section 249(4)(b) of the 1961 Act, allowing the appeal against the assessment order to proceed on the condition that the petitioner pays Rs. 12 crores in installments, with a deadline for initial payment and subsequent monthly installments. Failure to comply would lead to recovery proceedings by the Department.

6. The writ petition was disposed of accordingly, with the appeal to be adjudicated only after full payment of the specified amount by the petitioner.

Judge's Name: HONOURABLE MR. JUSTICE GOPINATH P.

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