Failure to File Return and Pay Tax: ITAT Remands Case to CIT(A) [Read Order]

The Kolkata Bench of Income Tax Appellate Tribunal(ITAT) remanded the case to the Commissioner of Income Tax(Appeals)[CIT(A)] after the appeal was dismissed due to the failure to file a return and pay advance tax.

Raj Kishor Prasad,appellant-assessee,was flagged by the INSIGHT portal for possible tax evasion in the 2018-19 assessment year. The Assessing Officer(AO) found that no income tax return was filed despite financial transactions. Since there was no response to a notice under Section 148, cash deposits of ₹1,32,98,550 were added as unexplained income under Section 68 of the Act.

The assessee challenged the order before the CIT(A), but the appeal was dismissed. The CIT(A) held that since no income tax return was filed, advance tax had to be paid as required under Section 249(4)(b). As this was not done, the appeal was rejected on this ground.

The assessee aggrieved by the order of the CIT(A) appealed before the tribunal.

Read More: Madras HC upholds Proceedings u/s 276CC of the Income Tax Act due to Non-Filing of ITR even After Issuing Notice [Read Order]

The assessee’s counsel explained that the income for the year was ₹2,40,983, below the taxable limit. He said the return was not filed because there was no tax liability and asked for the case to be sent back to the CIT(A) for reconsideration.

The revenue counsel did not oppose the assessee’s request but noted that the assessee failed to explain the non-payment of tax to the CIT(A). He therefore asked for the appeal to be dismissed.

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The two member bench comprising Sonjoy Sarma(Judicial Member) and Sanjay Awasthi(Accountant Member) after reviewing the submissions and documents, found that the CIT(A) had not properly considered the documents and dismissed the appeal without addressing the case’s merits.

The tribunal decided to remand the issue to the CIT(A) for a fresh review. The assessee was asked to submit documents to prove there was no tax liability. The CIT(A) was directed to re-examine the case and pass a new order based on the law. In short,the appeal filed by the assessee was allowed for statistical purposes.

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