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Judgment
PER MANISH AGARWAL, AM :
The present appeal is filed by assessee against the order dated 05.10.2025 of Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2018-19/10373137 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 26.02.2024 passed u/s 147 r.w.s 144 read with section 144B of the Act pertaining to Assessment Year 2019-20.
At the time of hearing, no one attended the proceedings on behalf of the assessee. Therefore, the appeal is being decided on the basis of material available on record and in the absence of the assessee.
At the outset, from the perusal of grounds appeal, it is observed that ld. CIT(A) has not admitted the appeal of the assessee for non-payment of advance tax. Since the ld. CIT(A) has dismissed the appeal of the assessee in limine thus, we first decide the issue of maintainability of the appeal of the assessee.
Brief facts are that since the assessee failed to participated in the assessment proceedings thus the AO has completed the assessment u/s 144 dt. 26.02.2024 by making additions of Rs.27,15,060/- on account of income from business, of Rs.51,34,000/- u/s 69A r.w.s 115BBE of the Income Tax Act, 1961 on account of unexplained money and of Rs.9,87,29,799/- u/s 69C r.w.s. 115BBE of the Income Tax Act, 1961 on account of unexplained expenditure. Aggrieved, the assessee carried matter in first-appeal. The CIT(A) has dismissed the appeal of the assessee in limine for want of payment of advance tax as per the provisions of Section 249(4)(b) of the Act. Against this order of ld. CIT(A), assessee is in appeal before Tribunal.
So far as the non-maintainability of assessee’s appeal on account of non-payment of advance tax we find that the ld. CIT(A) invoked the provisions of section 249(4) of the Act which reads as under:
“(4)No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,
(a)where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or
(b)where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him:
Provided that, in a case falling under clause (b) and on an application made by the appellant in this behalf, the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause.”
Admittedly, as per section 249(4)(b) of the Act, in a case where no return of income is filed, then the appeal is maintainable before the CIT(Appeals) only if the assessee paid the amount equal to the amount of advance tax which was payable by him. At the same time, the legislature had carved out an exception to the applicability of the aforesaid statutory requirement by way of a “proviso” to Section 249(4) of the Act, as per which, on an application made by the appellant, the CIT(Appeals) may, for any good and sufficient reason to be recorded in writing exempt him from the operation of the aforesaid statutory provision. The statutory requirement as contemplated in Clause (b) of sub-section (4) of Section 249 of the Act would stand triggered only where any obligation was cast upon the assessee to pay “advance tax”. In the instant case, assessee stated in the statement of facts that he was engaged in the business of trading in liquor and due to losses has to closed down the business within the year itself. Since the assessee has suffered losses, he was not supposed to pay advance tax.
In view of these facts, we are of the opinion that the view taken by the CIT(Appeals) while dismissing the appeal of the assessee as not maintainable for the sole reason of non-compliance of the mandatory condition contemplated in Clause (b) of sub-section (4) of Section 240 the Act is not correct. This view is supported by the orders of the ITAT, Bengaluru in the case of Shamanna Reddy Vs. ITO in ITA No.1120/Bang/2023 dt. 20.02.2024 and also of the ITAT, Delhi in the case of Vikram Singh Vs. ITO in ITA No.6559/Del/2019, dt. 21.02.2023.
It is further observed that the assessee neither participated even before the AO nor had filed any details in respect to the sales and cash deposited into bank. In view of these facts, in the larger interest of justice, we admit the appeal of the assessee as maintainable and set aside the orders of the lower authorities and remand back the same to the file of AO to pass the order denovo afresh. Needless to say, the AO in the course of set-aside proceedings, shall provide reasonable opportunity of being heard to the assessee. Assessee is also directed to appear before the AO and to file all the necessary details as called for in set aside proceedings. With these directions, all the grounds of appeal of the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.