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2025 (5) TMI 128 - AT - Income TaxDismissal of appeal by CIT(A) as infructuous as assessee had not paid the amount equal to the advance tax as per section 249(4)(b) HELD THAT - AO had clearly mentioned that the assessee had filed his return of income in response to the notice issued u/s. 148 of the Act. In such circumstances the finding of the CIT(A) that the assessee had not paid the admitted tax amount as per section 249(4)(b) of the Act is not correct. The provision 249(4)(b) would attract only in cases where the assessee had not filed their return of income and not in other cases. We find that the order of the Ld.CIT(A) is not in accordance with the provisions of the Act and therefore we set aside the order of the CIT(A) and remit the issue to his file to decide the appeal on merits -Appeal filed by the assessee is allowed for statistical purposes.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal are: (a) Whether the CIT(A) was correct in dismissing the appeal on the ground that the assessee had not paid advance tax equal to the amount specified under section 249(4)(b) of the Income Tax Act, 1961; (b) Whether the CIT(A) erred in interpreting section 249(4) of the Act by applying the provision applicable to cases where no return of income has been filed, despite the assessee having filed a return in response to notice under section 148; (c) Whether the assessee was entitled to have the appeal admitted and decided on merits, given that the return of income was filed and applicable taxes were paid; (d) Whether the CIT(A) failed to provide adequate opportunity to the assessee by granting only one hearing and prematurely dismissing the appeal; (e) The correctness of the CIT(A)'s conclusion that the assessee was required to pay advance tax despite the total taxable income being below the threshold limit of Rs. 3,00,000/-; (f) The overall legality and propriety of the CIT(A)'s order dismissing the appeal without considering the merits. 2. ISSUE-WISE DETAILED ANALYSIS Issue (a) and (b): Interpretation and Application of Section 249(4) of the Act The relevant legal framework is section 249(4) of the Income Tax Act, which governs the admission of appeals before the Commissioner of Income Tax (Appeals). Section 249(4)(a) applies where the assessee has filed a return of income and has paid the amount of advance tax due, whereas section 249(4)(b) applies where no return is filed and the appeal is liable to be dismissed if the advance tax or self-assessment tax is not paid. Precedents establish that dismissal under section 249(4)(b) is only justified when the assessee has not filed any return of income and has not paid the requisite advance tax. Conversely, if a return is filed and tax dues are paid, the appeal cannot be dismissed summarily under this provision. The Tribunal noted that the Assessing Officer's order explicitly recorded that the assessee had filed a return of income in response to the notice under section 148 and had paid the applicable taxes. Therefore, the CIT(A)'s dismissal of the appeal relying on section 249(4)(b) was a misapplication of the law. The Tribunal emphasized that section 249(4)(b) is not applicable in cases where a return has been filed, and the correct provision to consider is section 249(4)(a). The Court's interpretation was that the CIT(A) erred in concluding that the assessee had failed to pay advance tax when the facts on record showed otherwise. The Tribunal set aside the CIT(A)'s order on this ground and remitted the matter for fresh adjudication on merits. Issue (c): Admission of Appeal and Merits Consideration The assessee contended that since the return of income was filed and taxes were paid, the appeal deserved to be admitted and decided on merits. The CIT(A) had dismissed the appeal as infructuous without considering the merits, which was challenged. The Tribunal agreed with the assessee's position, holding that the appeal should not have been dismissed at the threshold stage and that the CIT(A) was required to examine the appeal on its substantive merits after ensuring compliance with the procedural requirements under section 249(4)(a). This conclusion was based on the principle that procedural provisions should not be used to deny substantive rights when the statutory conditions for admission of appeal are fulfilled. Issue (d): Adequacy of Opportunity to the Assessee The assessee argued that only one hearing was granted and that the CIT(A) prematurely dismissed the appeal. The CIT(A)'s notice indicated the appeal was admitted and called for written submissions, yet the appeal was dismissed without adequate opportunity. The Tribunal implicitly recognized the importance of providing sufficient opportunity to the appellant to present arguments before dismissal. While not expressly detailed in the order, the remand for fresh adjudication inherently requires the CIT(A) to afford proper hearings and consider submissions. Issue (e): Applicability of Advance Tax Payment Requirement The assessee contended that advance tax was not payable as the total taxable income was below the threshold limit of Rs. 3,00,000/-. The CIT(A) did not appreciate this fact. The Tribunal did not explicitly rule on this issue but by setting aside the CIT(A)'s order and remanding the matter, it implied that such factual and legal contentions should be examined on merits by the CIT(A). This includes verifying the applicability of advance tax provisions in light of the assessee's income level. Issue (f): Legality and Propriety of CIT(A)'s Order The Tribunal found that the CIT(A)'s order was not in accordance with the provisions of the Act, particularly due to the misapplication of section 249(4)(b) and failure to consider the return filing and tax payment facts. The order was set aside, and the matter remitted for fresh decision after hearing the assessee. 3. SIGNIFICANT HOLDINGS The Tribunal held: "The provision 249(4)(b) would attract only in cases where the assessee had not filed their return of income and not in other cases." "In such circumstances, the finding of the Ld.CIT(A) that the assessee had not paid the admitted tax amount as per section 249(4)(b) of the Act is not correct." "We find that the order of the Ld.CIT(A) is not in accordance with the provisions of the Act and therefore we set aside the order of the Ld.CIT(A) and remit the issue to his file to decide the appeal on merits and in accordance with law after hearing the assessee." Core principles established include:
Final determinations:
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