ITAT allows appeal after CIT(A) refused admission for non-payment of advance tax under section 249(4)(b)

The ITAT Amritsar allowed the assessee's appeal for statistical purposes, setting aside the CIT(A)'s order refusing to admit the appeal for non-payment of advance tax under section 249(4)(b). The Tribunal found that the assessee presented a prima facie case of having no taxable income, claiming only agricultural income and exempt receipts from agricultural land sales. Since the assessee declared NIL taxable income with supporting documentary evidence, the Tribunal held no obligation existed to pay advance tax under section 208. The matter was restored to CIT(A) for adjudication on merits with proper verification and hearing opportunity.

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Issues involved:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) for non-payment of advance tax u/s 250 of the Income Tax Act 1961, arising from an order passed u/s 147 rws 144/144B of the Act 61.

Admission of appeal for non-payment of advance tax:
The CIT (A) refused to admit the appeal for hearing due to nonpayment of advance tax as per provisions of section 249(4)(b) of the Act 61. The grounds of appeal challenged this decision, arguing that the requirement of payment of tax before filing the first appeal is directory, not mandatory.

Assessment and grounds of appeal:
The assessee derived income from agriculture and received substantial amounts from the sale of agricultural lands and advance for sale. Despite filing written submissions and providing documentary evidence, the AO assessed the total income at Rs. 89,42,000. The appeal filed before the CIT (A) raised various grounds challenging the addition made by the AO.

Deficiency notice and response:
In response to a deficiency notice, the appellant explained that no income tax return was filed, hence no tax was deposited. The CIT (A) found the reply unsatisfactory and noted the absence of an application for exemption from the provision of section 249(4)(b) along with the appeal.

Arguments and decision:
The AR argued that the assessee had no taxable income and therefore no liability to pay advance tax. The AR cited relevant provisions and a precedent to support the argument that the appeal should not be rejected for non-payment of advance tax. The ITAT held that the assessee had no obligation to pay advance tax for the year under appeal and directed the CIT (A) to admit the appeal for adjudication on merits.

Conclusion:
The ITAT allowed the appeal for statistical purposes, setting aside the order of the CIT (A) and directing a review of the case on its merits. The decision emphasized the absence of taxable income for the assessee and the consequent lack of obligation to pay advance tax, leading to the appeal being considered valid for further proceedings.

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