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Judgment
PER MANISH AGARWAL, AM:
The captioned appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFCA) Delhi, [“ld. CIT(A)” in short] dated 30.10.2025 in Appeal No. NFAC/2016-17/10040792 arising out of the assessment order dt. 28.12.2019 passed u/s 144 of the Income Tax Act, 1961 (the Act) for AY 2017-18.
Heard the parties at length and perused the material available on record. It is observed that besides challenging the additions made by AO, assessee challenged the appellate order where the appeal of the assessee was not admitted for non-payment of advance tax though the assessee as not having taxable income. 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 the AO had the information that the assessee had deposited Cash of Rs. 34,11,000/- in his bank accounts during the demonetization period. Since no return was filed by assessee for the year under appeal, the assessee was identified as “Non-Filer” and a notice u/s 142(1) of the Act was issued. However, neither any return of income was filed by the assessee nor any compliance was made to the notice issued u/s 142(1) of the Act. Further assessee never appeared before the AO during the assessment proceedings thus the AO passed the assessment order u/s 144 vide order dt. 28-12-2019 by making addition of Rs. 1,44,73,116/- towards the cash and credit clearing entries appearing in both the bank accounts of the assessee. Aggrieved, the assessee filed the appeal before ld. CIT(A) where the appeal of the assessee was dismissed in limine for want of payment of advance tax as per the provisions of Section 249(4)(b) of the Act.
Against the order of ld. CIT(A), assessee is in appeal before Tribunal.
So far as the non-maintainability of assessee’s appeal for non-payment of advance tax, it is observed that ld. CIT(A) has invoked the provisions of section 249(4)(b) 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.”
As per section 249(4)(b) of the Act, in a case where no return of income is filed by an assessee, appeal is maintainable before the CIT(Appeals) only if an amount equal to the amount of advance tax which was payable by him stood deposited. 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 from the operation of statutory provision of section 249(4) of the Act. The statutory requirement contemplated in Clause (b) of sub-section (4) of Section 249 of the Act would stand triggered only where any obligation was casted upon the assessee to pay “advance tax”. As per the statement of facts and grounds of appeal filed by assessee alongwith the appeal memo, it is claimed that assessee was not having total income exceeding the maximum amount not chargeable to tax and thus in absence of any taxable income for the year under consideration, assessee was not under any legal obligation to pay any advance tax.
In the light of above facts, in our considered opinion, the view taken by ld. CIT(A) of treating the appeal of the assessee as not maintainable for the reason of non-compliance of mandatory condition contemplated in Clause (b) of sub-section (4) of Section 249 the Act is not acceptable. This view is supported by the judgement of Co-ordinate bench of ITAT, Bangalore in the case of Shamama Reddy Vs. ITO in ITA No.1120/Bang/2023 dt. 20.02.2024 and also of the Co-ordinate bench of ITAT, Delhi in the case of Vikram Singh Vs. ITO in ITA No.6559/Del/2019, dt. 21.02.2023. Therefore, we set aside the order of the CIT(Appeals). It is further observed that the assessee has not appeared and filed any submission before the AO therefore, in the interest of justice, we restore it to the file of AO with a direction to pass the order denovo fresh. Needless to say, the AO shall in the course of set-aside proceedings, provide a reasonable opportunity of being heard to the assessee. Assessee is also directed to participate in set aside proceedings and file all the relevant details to justify the source of the deposits in the bank accounts. The Grounds of appeal No. 4 & 5 of the assessee are thus, allowed for statistical purposes.
Since we have already restored the appeal of the assessee to the file of AO, the other grounds of appeal taken by the assessee are not adjudicated.
In the result, appeal filed by the assessee is allowed for statistical purposes.