2024 (7) TMI 1375 - AT - Income Tax

CIT(A) requesting for exemption from depositing of advance tax as is contemplated u/s 249(4)(b) - non appearance/non compliance before the AO by the assessee during reassessment proceedings - HELD THAT - Sufficient reasons for non appearance/non compliance before the AO by the assessee during reassessment proceedings , are also demonstrated by the assessee. Now, we set aside the appellate order passed by CIT(A) and direct the CIT(A) to make necessary preliminary enquiry as to the assessee s claim to have filed additional evidences before ld. CIT(A) by way of Land Records 7/12 and 8A, evidence of agricultural income etc., and if that be found to be prima-facie true, then CIT(A) shall admit the appeal as good and reasonable cause as are stipulated under proviso to Section 249(4)(b) is shown by the assessee to seek exemption from deposit of advance tax, before filing appeal with ld. CIT(A). CIT(A) shall give finding in writing on the claim of the assessee w.r.t. admission of appeal keeping in view provisions of Section 249(4)(b) read with proviso to Section 249(4)(b), by passing a reasoned and speaking order on this issue. If the ld. CIT(A) decides to admit the appeal of the assessee keeping in view provisions of Section 249(4)(b) read with proviso, then the CIT(A) shall proceed to adjudicate the appeal of the assessee, on merits in accordance with law, by passing a speaking and reasoned order, keeping in view provisions of Section 250(6) - CIT(A) shall admit the additional evidences filed by the assessee, while adjudicating the appeal of the assessee. As per section 250(6), CIT(A) has to state the points for determination, decision thereof and reasoning thereof. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues Involved:
1. Whether the cash deposit in the assessee's bank accounts should be considered as unexplained cash deposit.
2. Whether the appeal was rightly dismissed by the Commissioner of Income Tax (Appeals) due to non-payment of tax determined by the Assessing Officer.

Issue-Wise Detailed Analysis:

1. Unexplained Cash Deposit:
The Assessing Officer (AO) reopened the assessment under Section 147 of the Income-tax Act, 1961, based on information that the assessee had made a cash deposit of Rs. 11,65,300/- in his savings bank account. The assessee did not file a return of income in response to the notice issued under Section 148. Despite statutory notices under Section 142(1), there was no compliance from the assessee. The AO obtained bank statements under Section 133(6) and found total credits of Rs. 23,70,635/- in three bank accounts. The AO framed a best judgment assessment under Section 144, treating Rs. 21,20,635/- as undisclosed income under Section 69, excluding a returned cheque of Rs. 2,50,000/-. The assessee claimed the deposits were from agricultural income, which is exempt under Section 10(1).

2. Dismissal of Appeal by CIT(A) for Non-Payment of Tax:
The Commissioner of Income Tax (Appeals) dismissed the appeal under Section 249(4) due to non-payment of the assessed tax. The CIT(A) noted that the assessee did not file a return of income and did not pay the advance tax on the assessed income. The assessee argued that he was a farmer with agricultural income, which is exempt from tax, and thus believed he was not liable to file a return or pay advance tax. The CIT(A) rejected this contention, as the AO had assessed the income under 'income from other sources'.

Tribunal's Observations:
The Tribunal observed that the assessee did not file a return of income under Sections 139 and 148, believing his income was exempt as agricultural income. The Tribunal noted that the assessee provided land records and evidence of agricultural income as additional evidence under Rule 46A. The Tribunal found the assessee's explanation plausible and directed the CIT(A) to verify the claims. If the claims were found to be true, the CIT(A) should admit the appeal under the proviso to Section 249(4)(b), which allows exemption from depositing advance tax for good and sufficient reasons.

Conclusion:
The Tribunal set aside the CIT(A)'s order and directed the CIT(A) to make a preliminary enquiry into the assessee's claims. If the claims were found to be prima facie true, the CIT(A) should admit the appeal and adjudicate it on merits, considering the additional evidence provided by the assessee. The Tribunal allowed the appeal for statistical purposes, without commenting on the merits of the case.

Final Order:
The appeal filed by the assessee in ITA No.844/Ahd/2024 for the assessment year 2010-11 was allowed for statistical purposes.