No Obligation to Pay Advance Tax if There is No Taxable Income | Appeal Can’t Be Dismissed for Sec. 249(4) Non-compliance

Case Details: Vishnusharan Chandravanshi vs. ITO - [2024] 161 taxmann.com 803 (Raipur-Trib.)

Judiciary and Counsel Details

• Ravish Sood, Judicial Member
• Tanmay Jain, CA for the Appellant.
• Satya Prakash Sharma, Sr. DR for the Respondent

Facts of the Case

The assessee made cash deposits during the demonetization period in his bank account. On enquiring by the Assessing Officer (AO), the assessee claimed that the cash deposits were sourced from his agricultural income from 33 acres of agricultural land that remained under his self-cultivation.

However, the assessee failed to substantiate his explanation regarding the source of the cash deposits based on supporting documentary evidence. Thus, the AO held the entire amount as the assessee’s unexplained money under section 69A(1).

Aggrieved by the order, the assessee preferred an appeal to the CIT(A). CIT(A) dismissed the appeal and held that the assessee failed to comply with the provisions of Section 249(4)(b) as he had not paid an amount equal to the amount of advance tax that was payable by him.

Assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that as per section 249(4)(b), in a case where no return of income has been filed by the assessee, then his appeal shall be maintainable before the CIT(A) only if he had paid an amount equal to the amount of advance tax which was payable by him. At the same time, the Legislature had carved out an exception to the applicability of the aforesaid statutory requirement by way of a ‘proviso’ to section 249(4).

It is to be noted that the statutory requirement contemplated in clause (b) of sub-section (4) of section 249 would stand triggered only where any obligation was cast upon the assessee to pay ‘advance tax’. In the present case, the assessee had not only before the Tribunal but also in the ‘Statement of facts’ stated before the CIT(A) that he had no taxable income.

Therefore, in the absence of any obligation cast upon the assessee to compute/pay ‘advance tax’ under sections 208 and 209 for the subject year, the CIT(A) could not have held that he had failed to comply with the statutory conditions contemplated in section 249(4)(b).

List of Cases Reviewed

• Shamanna Reddy v. ITO [IT Appeal No. 1120 (Bang.) of 2023, dated 20-2-2024]
• Vikram Singh v. ITO [IT Appeal No. 6559 (Delhi) of 2019, dated 21-2-2023] (para 14) followed.

List of Cases Referred to

• T. Govindappa Setty v. ITO [1998] 144 CTR 28/231 ITR 892 (Karnataka) (para 8).