The Indore bench of Income Tax Appellate Tribunal(ITAT) set aside the CIT(A)’s
m order, noting that advance tax payment under Section 249(4)(b) of the Income Tax Act,1961 was not applicable in this case, and remanded the case to the AO for a proper assessment.
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Manoj Kumar Motwani, the appellant-assessee, deposited Rs. 24,65,550/- in a bank account during the financial year 2012-13 relevant to assessment year (AY) 2013-14 . The Assessing Officer (AO) issued a notice under section 148 on 13.03.2020 to initiate proceedings under section 147.The assessee did not file a return in response and failed to comply with notices under section 142(1) as well.
Consequently, the AO passed an assessment order under section 147 read with section 144, treating the entire deposit of Rs. 24,65,550 as income from unexplained sources under section 69A read with section 115BBE.
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The assessee being dissatisfied by the decision of the AO filed an appeal before the Commissioner of Income Tax (Appeals)[CIT(A)]. The CIT(A) dismissed the appeal for being non-admitted due to non-payment of tax as required by section 249(4)(b). The assessee then filed an appeal before the tribunal against the orders of the lower authorities.
The appeal of the assessee was delayed by 9 days. The assessee counsel submitted that the delay was due to the assessee’s health issues including recent cardiac surgery and ongoing illness,supported by an affidavit.
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The Tribunal contended that Section 253(5) of the Act allows the ITAT to admit an appeal after the prescribed time if there is a sufficient cause for the delay.The tribunal condoned the 9-day delay, citing the Supreme Court’s ruling in Collector, Land Acquisition Vs Mst. Katiji (1987), which emphasizes that substantial justice should prevail over technicalities.
The Tribunal noted the submission made by the counsel for the assessee, who stated that the assessee operates a small kirana/general store, and that the total income did not exceed the tax-exempt limit. Therefore, there was no obligation to file a return or pay advance or self-assessment tax.
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The tribunal contended that the CIT(A) was incorrect in stating that there was a non-compliance with section 249(4)(b), and set aside the order. The decision was based on the ITAT,, Indore decision in Shri Pushpendra Singh Chouhan vs. ITO, dated 24.06.2024, the decision is as follows:
“In our view, clause (b) of Section 249(4) of the Act will not apply as there is no question of paying advance tax in reassessment proceedings, even though assessee did not file Rol. In the said circumstances, we find that the impugned order dismissing the appeal on the ground of non-compliance of Section 249(4) of the Act cannot be sustained and deserves to be set-aside”
The Tribunal noted that the Assessing Officer (AO) assessed the case under Section 144, treating the cash deposits as income because the assessee did not respond to notices or submit documents.
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The counsel for the assessee submitted that the assessee tried to e-file documents but faced technical issues, resolved by the department on 30.09.2021. Despite this, the AO issued an ex-parte assessment order under Section 144 on 24.09.2021.
The Tribunal noted that the AO acknowledged that the assessee had already provided some information about the deposits. Given these circumstances, respondent counsel suggested sending the case back to the AO for a proper review, which the assessee counsel agreed to.
The two member bench comprising Vijay Pal Rao (Judicial Member) and B.M. Biyani(Accountant Member) decided to remand the case to the AO for a fair assessment. The assessee must attend hearings and avoid delays. If the assessee does not cooperate, the AO may proceed based on the available information.
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