2024 (5) TMI 1368 - AT - Income Tax

Appeal before CIT(A) u/s 249 - Non admission of appeal for non-payment of advance tax as per provisions of section 249(4)(b) - obligation to make payment of advance tax u/s 208 or not? - determination of documentary evidences filed by the assessee HELD THAT - We find that the assessee has taken a stance from the very first stage itself , before the AO that he has no taxable income for the year under appeal and his income is only agricultural income which is exempted income under the Act 61 and the gift received from relative ( within the meaning of explanation (e) of clause (vii) of sec 56 of the Act ) is also non-taxable, and has filed documentary evidence of the same before the AO , as evident from the assessment order, and in the computation of income filed by the assessee before the Tribunal, he has declared NIL taxable income , thereby indicating that he is not liable to pay any advance tax as per provisions of section 207 of the Act 61 because he has no total income which would be chargeable to tax and computation of advance tax , as per sec 209 of the Act is NIL, and according to the assessee the payment of advance tax u/s 210 of the Act , of his own accord , does not arise in this case. We also note that the assessee has filed a reply before the first appellate authority to the deficiency letter, dated 03/01/2024, stating that he has no taxable income. Thus we are of the opinion, that the assessee has presented a prima facie case, of no obligation, to make payment of advance tax u/s 208 of the Act 61, for the year under appeal, and we hold that the CIT(A) should have admitted the appeal for adjudication on merits, and the amount of advance tax payable by the assessee, for the purpose of presenting the appeal, as per provisions of section 249(4)(b), should be taken as NIL. We set aside the order of the CIT(A) and restore the same to his file for adjudication on merits, after causing all necessary verification of all documentary evidences he deems fit and proper, as per procedure of law, (un influenced by any observation we might have made in the above paragraphs), and after allowing proper opportunity to the assessee of being heard. Appeals of the assessee is allowed for statistical purposes.

Summary

Issues:
Admission of appeal for nonpayment of advance tax as per provisions of section 249(4)(b) of the Act 61.

Detailed Analysis:
The appeal was filed by the assessee against the order of the Ld Commissioner of Income Tax (Appeals)-NFAC for the Assessment Year 2015-16, arising from the order of the AO passed under sections 147 and 144/144B of the Income Tax Act, 1961. The CIT (A) refused to admit the appeal for hearing due to nonpayment of advance tax as per section 249(4)(b) of the Act 61.

The grounds of appeal raised by the assessee before the Tribunal challenged the denial of admission of the appeal by the CIT (A) for nonpayment of advance tax. The appellant cited the principles of natural justice as laid down by the Hon'ble Apex Court in relevant cases. The appellant requested leave to add or amend the grounds of appeal before final disposal.

The case involved the assessee deriving income from agriculture during the relevant year, with no return filed in the normal course. The AO issued a notice under section 148 of the Act, and subsequent notices under section 142(1) remained unanswered. The assessee submitted written responses and documentary evidence during the assessment proceedings, explaining the source of income and cash deposits.

The issue before the CIT (A) was the incorrect filing of the memorandum of appeal due to nonpayment of advance tax and non-filing of a return of income for the relevant year. The CIT (A) dismissed the appeal for statistical purposes as not admitted, as the appellant did not make an application for exemption from the operation of section 249(4)(b) along with the appeal.

During the appeal hearing, the AR argued that the assessee had no taxable income and, therefore, was not liable to pay advance tax as per the provisions of the Act. The AR presented documentary evidence supporting the claim of no taxable income and argued that the appeal should be admitted for consideration on merits.

After hearing the submissions, the Tribunal held that the assessee had presented a prima facie case of no obligation to pay advance tax for the relevant year. The Tribunal set aside the order of the CIT (A) and directed the appeal to be admitted for adjudication on merits, considering the evidence provided by the assessee.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing that the assessee had shown no obligation to pay advance tax for the year under appeal. The order was pronounced on 28.05.2024, with the appeal being restored to the CIT (A) for further verification and proper opportunity for the assessee to be heard.