2022 (1) TMI 232 - AT - Income Tax

Tribunal overturns CIT(A)'s ruling on appeal admissibility, remands for fresh decision under section 249(4)(b).

The Tribunal found that the ld. CIT(A)'s decision on the admissibility of the appeal under section 249(4)(b) was incorrect as the appellant had filed the ... Validity of reopening of assessment - maintainability of appeal under section 249(4)(b) requiring deposit equal to advance tax - effect of filing original return under section 139(1)/139(4) and compliance with requisitions under section 148/142(1) - remand for fresh adjudication and requirement of effective opportunity of hearingMaintainability of appeal under section 249(4)(b) requiring deposit equal to advance tax - effect of filing original return under section 139(1)/139(4) - Whether the first appellate authority was correct in holding the appeal not maintainable under section 249(4)(b) on the ground that the assessee had not filed the original return or paid admitted tax. - HELD THAT: - The Tribunal found that the CIT(A)'s conclusion that the appellant had not filed any return and therefore was barred by section 249(4)(b) was contrary to the material on record. The assessee had stated in Form 35 that the original return was filed and produced a copy of the return filed on 04.12.2009 along with details of taxes paid. The CIT(A) proceeded on the assumption of non-filing without seeking clarification from the assessee despite apparent inconsistency in his own order. The Revenue conceded that if the return was filed and admitted tax paid, the matter could be restored to the CIT(A) for adjudication on merits. In these circumstances the finding of inadmissibility under section 249(4)(b) was incorrect. [Paras 6]Finding of inadmissibility by CIT(A) under section 249(4)(b) set aside as incorrect; appeal not to be rejected on that ground.Remand for fresh adjudication and requirement of effective opportunity of hearing - validity of reopening of assessment - Whether the matter should be remanded to the CIT(A) for decision on merits after verification of filing of return and taxes paid. - HELD THAT: - Since the CIT(A) did not decide the appeal on merits and reached an inadmissibility conclusion de hors the material, the Tribunal directed that all issues and grounds raised before it be remitted to the CIT(A) for fresh adjudication on merits. The CIT(A) is to hear the assessee after giving due and effective opportunity and decide the issues in accordance with law, including any question relating to the validity of reopening, having regard to the fact that the return was filed and taxes paid as presented before the Tribunal. [Paras 6]Appeal remanded to the CIT(A) for fresh decision on merits after giving the assessee effective opportunity of hearing.Final Conclusion: The impugned appellate finding of inadmissibility under section 249(4)(b) is set aside; the matter is remitted to the CIT(A) to decide all issues on merits after affording effective opportunity to the assessee. Appeal allowed for statistical purposes. Issues:1. Validity of reopening on jurisdiction.2. Merits of the additions based on the primary issue of non-filing of original return of income.3. Admissibility of the appeal under section 249(4)(b) of the Income-tax Act.Validity of Reopening on Jurisdiction:The appeal was filed against the order dated 30.08.2018 passed by the ld. CIT(A)-I, Noida for the assessment year 2009-10. The assessee challenged the validity of reopening on jurisdiction. The ld. CIT(A) invoked the provisions of section 249(4)(b), stating that the appeal was not maintainable as the assessee had not filed the original return of income u/s. 139(1) or under the requisitions of the AO. The ld. CIT(A) held that for the appeal to be eligible for admission, the assessee must deposit an amount equal to the advance tax payable. The assessee argued that they had indeed filed the original return of income on 04.12.2009 for A.Y. 2009-10 and provided evidence to support this claim. The Revenue accepted that if the return had been filed and the admitted tax paid, the matter could be reconsidered by the ld. CIT(A).Merits of the Additions Based on Non-filing of Original Return of Income:The ld. CIT(A) noted in the order that the appellant had not filed the return of income under the specified sections of the Income-tax Act. However, the appellant contended that they had filed the original return of income and provided supporting documentation. The ld. CIT(A)'s finding that the appeal could not be admitted for want of jurisdiction was deemed incorrect. The appellant's counsel produced a photocopy of the income-tax return originally filed for the assessment year in question and detailed the taxes paid on the returned income. The Tribunal found the ld. CIT(A)'s decision to be erroneous and remanded all issues and grounds raised back to the ld. CIT(A) for a decision on merits after providing the appellant with a proper opportunity to be heard.Admissibility of the Appeal under Section 249(4)(b) of the Income-tax Act:The ld. CIT(A) had held that the appeal was not admissible under section 249(4)(b) due to the alleged non-filing of the original return of income. However, the Tribunal found that the appellant had indeed filed the original return of income and paid the admitted tax. The ld. CIT(A)'s conclusion that the appeal was not admissible was based on incorrect assumptions and lack of proper verification. The Tribunal allowed the appeal for statistical purposes and directed a reconsideration of the matter on merits in accordance with the law.In conclusion, the Tribunal found that the ld. CIT(A)'s decision regarding the admissibility of the appeal under section 249(4)(b) was incorrect as the appellant had filed the original return of income and paid the admitted tax. The matter was remanded back to the ld. CIT(A) for a fresh decision on merits, providing the appellant with a fair opportunity to present their case.