2024 (4) TMI 598 - AT - Income Tax

Dismissal of appeal in limine u/s 249 by CIT(A) - Addition of purchase price of the property bought by assessee son - as argued payment made for purchase of property for which the investment is made by assessee's son from his own independent source - D.R. submitted that as per section 249(4)(b) the assessee is liable to file the return of income and pay the advance tax before filing the appeal before the CIT(A) but assessee failed to do so HELD THAT - The provisions of section 249(4)(b) of the Act is clear that the appeal before the CIT(A) should be admitted only when the assessee paid the advance tax where return of income has not been filed. The proviso to said section also describes that the assessee will get exemption from this clause if the application is made before the CIT(A) for not filing return of income or paying advance tax. But in the present case assessee has explained that the assessee herself has not obtained the said property but her son has paid the said amount for purchase of property from his own fund. In fact, the assessee s son is a joint owner of the said property and for the sake of conveyance specially the conveyance deed, the stamp deed is lesser therefore the assessee s name has been utilised in the conveyance deed. The relation is direct relation between the mother and son and therefore this should have been considered by the Assessing Officer as well as by the CIT(A). In the peculiar circumstances of the present case, the proviso to section 249(4)(b) of the Act should have been pointed out by the CIT(A) during the hearing which the CIT(A) failed to do so. Merely on the technical ground, the appeal before the CIT(A) cannot be dismissed and in fact after seeing the merit of the case, it appears that the transaction was not doubted and the investment made by the son of the assessee was also not questioned by the Assessing Officer. Decided on favour of assessee.

Summary

Issues involved:
The judgment involves issues related to the addition made by the Assessing Officer, maintainability of appeal u/s 249(4)(b) of the Income Tax Act, 1961, and the requirement of filing return of income.

Issue 1 - Addition made by Assessing Officer:
The appellant's appeal challenged the addition made by the Assessing Officer concerning the purchase of property by the appellant's son, where the appellant's name was used for convenience in the conveyance deed. The appellant contended that the entire purchase price was paid by the son from his independent source, which was disclosed in the son's income tax return. The Assessing Officer assessed the total income of the appellant based on the property transaction, leading to the appeal.

Issue 2 - Maintainability of appeal u/s 249(4)(b):
The CIT(A) dismissed the appellant's appeal on the grounds that the appellant did not file the original return of income for the assessment year in question and failed to pay advance tax as required under section 249(4)(b) of the Act. The appellant argued that she was not liable to file the return or pay taxes due to having income below the taxable limit. The appellant sought exemption from the provisions of section 249(4)(b) based on her income status.

Issue 3 - Requirement of filing return of income:
The appellant's case involved the non-filing of the original return of income for the relevant assessment year. The Assessing Officer reopened the case due to the property purchase transaction and issued notices under various sections of the Income Tax Act. The appellant responded stating her income was below the taxable limit, thus not requiring her to file a return. The Assessing Officer proceeded to assess the appellant's total income, resulting in the appeal before the CIT(A).

Judgment Summary:
The ITAT Ahmedabad allowed the appellant's appeal, emphasizing the peculiar circumstances of the case. The tribunal noted that the appellant's son had actually made the payment for the property purchase, and the appellant's name was used for convenience in the conveyance deed. The tribunal found that the Assessing Officer and the CIT(A) failed to consider this direct relation between the mother and son, leading to the dismissal of the appeal on technical grounds. The tribunal highlighted that the appellant's case was unique, and the provisions of section 249(4)(b) should have been applied differently. As a result, the appeal was allowed based on the specific facts of the case, setting a non-precedent decision.