Real estate firm allowed appeal against tax assessment despite non-filing, must pay Rs. 12 crore to proceed.

The HC permitted the petitioner, a real estate company, to appeal against the assessment order under the Faceless Appeal Scheme, 2021, despite non-filing of returns and a Rs. 68 crore tax demand. The Court allowed the appeal under Section 249(4)(b) of the Income Tax Act, 1961, contingent upon the petitioner paying Rs. 12 crores in installments. The appeal will proceed only after full payment; non-compliance will trigger recovery proceedings. The writ petition was disposed of accordingly.

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Issues: Assessment under Section 147 r/w Section 144 and Section 144B of the Income Tax Act, 1961 for non-filing of return of income, application of Section 69 for unexplained investment, appeal under Faceless Appeal Scheme, 2021, exemption from paying advance tax under Section 249 of the 1961 Act.

Judgment Details:

1. The petitioner, a Private Limited Company in real estate, faced assessment proceedings for the year 2016-17 due to non-filing of income return, leading to an order under Section 147 r/w Section 144 and Section 144B of the Income Tax Act, 1961, citing unexplained investment under Section 69. The petitioner was taxed at a higher rate under Section 115 BBE.

2. The petitioner previously challenged the assessment order in a writ petition which was dismissed, directing the petitioner to pursue statutory remedies. The petitioner filed an appeal under the Faceless Appeal Scheme, 2021, seeking exemption from paying advance tax under Section 249 of the 1961 Act, given a demand of Rs. 68 crores in the assessment order.

3. The petitioner's counsel referred to Section 249(4)(b) of the 1961 Act, arguing for exemption from advance tax payment for the appeal.

4. The respondent Department highlighted substantial investments made by the petitioner in subsequent years without filing returns or paying taxes for the 2016-17 assessment year, with a demand exceeding Rs. 68 crores in the assessment order.

5. The Court acknowledged the petitioner's case falling under the proviso Section 249(4)(b) of the 1961 Act, allowing the appeal against the assessment order to proceed on the condition that the petitioner pays Rs. 12 crores in installments, with a deadline for initial payment and subsequent monthly installments. Failure to comply would lead to recovery proceedings by the Department.

6. The writ petition was disposed of accordingly, with the appeal to be adjudicated only after full payment of the specified amount by the petitioner.

Judge's Name: HONOURABLE MR. JUSTICE GOPINATH P.

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