In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Kolkata Bench has set aside the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, for failing to consider the merits of the case and not granting an exemption for advance tax payment under Section 249(4)(b) of the Income Tax Act, 1961.
The case pertains to an appeal filed by Mohammad Amjad Ali Sahaji for the Assessment Year 2017-18.The appeal was against the order of the CIT(A) dated February 23, 2024, arising from an assessment order framed under Section 144 of the Act on December 10, 2019. The CIT(A) dismissed the appeal on the grounds that the assessee had not paid the applicable advance tax before filing the appeal, as mandated under Section 249(4)(b). The assessee contended that since his income was below the taxable limit, no advance tax was payable, and therefore, Section 249(4)(b) was not applicable to him.
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During the tribunal proceedings, the assessee argued that the CIT(A) failed to consider his explanation and submissions regarding the non-applicability of advance tax. Additionally, the assessee stated that the CIT(A) did not allow him an opportunity to apply for an exemption under the proviso to Section 249(4)(b), which provides discretionary relief based on good and sufficient reasons.
The ITAT bench, comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member), observed that the CIT(A) had not provided clarity on whether the provisions of Section 208 regarding advance tax liability were applicable to the assessee. The tribunal further noted that the CIT(A) had not examined the assessee’s claim that his income was below the taxable threshold.
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Referring to the statutory provisions, the ITAT emphasized that an assessee who has not filed a return is required to pay advance tax before filing an appeal. However, the proviso to Section 249(4)(b) allows the appellate authority to exempt the assessee from this requirement if a reasonable cause is shown. In this case, the assessee did not file a separate application for exemption, which led to the automatic dismissal of the appeal.
Considering the failure of the CIT(A) to address the exemption provision and the merits of the case, the ITAT ruled that the matter should be remanded back for fresh adjudication. The tribunal directed the CIT(A) to allow the assessee to file an exemption application and provide him with an opportunity to present his case on merits.
In Conclusion, the appeal was allowed for Statistical Purposes.
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