Appeal allowed after rejection for non-payment of advance tax under section 249(4)(b) despite NIL taxable income from agricultural sources

ITAT Amritsar allowed the assessee's appeal after CIT(A) rejected it for non-payment of advance tax under section 249(4)(b). The assessee claimed only agricultural income and gifts from relatives, both non-taxable, resulting in NIL taxable income. ITAT held that assessee presented prima facie case of no advance tax obligation under section 208, as computation under section 209 showed NIL liability. The matter was remanded to CIT(A) for adjudication on merits with proper verification of documentary evidence.

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Issues:
Admission of appeal for nonpayment of advance tax as per provisions of section 249(4)(b) of the Act 61.

Detailed Analysis:
The appeal was filed by the assessee against the order of the Ld Commissioner of Income Tax (Appeals)-NFAC for the Assessment Year 2015-16, arising from the order of the AO passed under sections 147 and 144/144B of the Income Tax Act, 1961. The CIT (A) refused to admit the appeal for hearing due to nonpayment of advance tax as per section 249(4)(b) of the Act 61.

The grounds of appeal raised by the assessee before the Tribunal challenged the denial of admission of the appeal by the CIT (A) for nonpayment of advance tax. The appellant cited the principles of natural justice as laid down by the Hon'ble Apex Court in relevant cases. The appellant requested leave to add or amend the grounds of appeal before final disposal.

The case involved the assessee deriving income from agriculture during the relevant year, with no return filed in the normal course. The AO issued a notice under section 148 of the Act, and subsequent notices under section 142(1) remained unanswered. The assessee submitted written responses and documentary evidence during the assessment proceedings, explaining the source of income and cash deposits.

The issue before the CIT (A) was the incorrect filing of the memorandum of appeal due to nonpayment of advance tax and non-filing of a return of income for the relevant year. The CIT (A) dismissed the appeal for statistical purposes as not admitted, as the appellant did not make an application for exemption from the operation of section 249(4)(b) along with the appeal.

During the appeal hearing, the AR argued that the assessee had no taxable income and, therefore, was not liable to pay advance tax as per the provisions of the Act. The AR presented documentary evidence supporting the claim of no taxable income and argued that the appeal should be admitted for consideration on merits.

After hearing the submissions, the Tribunal held that the assessee had presented a prima facie case of no obligation to pay advance tax for the relevant year. The Tribunal set aside the order of the CIT (A) and directed the appeal to be admitted for adjudication on merits, considering the evidence provided by the assessee.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing that the assessee had shown no obligation to pay advance tax for the year under appeal. The order was pronounced on 28.05.2024, with the appeal being restored to the CIT (A) for further verification and proper opportunity for the assessee to be heard.

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