The Income Tax Appellate Tribunal ( ITAT ), Hyderabad recently quashed an Order issued by the Commissioner of Income Taxes (Appeals) – National Faceless Assessment Centre ( CIT (A) ), Delhi citing the lack of proof warranting the taxpayer to pay advance tax under the provisions of Section 209 of the Income Tax Act, 1961. The Income Tax Appeal was instituted by Ramadevi Nelaturi Cuddapah, an individual who had abstained from filing her income tax returns for the Assessment Year ( A.Y. ) 2019-20. It had come to the knowledge of the jurisdictional Assessing Officer ( AO ) that the Appellant made cash deposits of Rs.16,50,000/- with the District Cooperative Central Bank Ltd, Kadapa, on the basis of which Notices under Section 148 and 142(1) of the Income Tax Act, 1961 were issued. Receiving no response from the Appellant-Assessee, the AO completed the “Best Judgment Assessment” and brought to tax an amount of Rs.16,50,000/- as ‘Unexplained Expenditure’ under Section 69C of the  Income Tax Act, 1961.

The Assessment was appealed  and dismissed in limine by the CIT(A) according to Section 249(4) of the Income Tax Act, 1961. Master GST Notice Replies – Drafting 20 Notices, Including Appeals – Register Now In the Present Appeal, the Income Tax Appellate Tribunal, Hyderabad, solely presided over by Inturi Rama Rao, Accountant Member, after perusing the material on record and the Order of the Commissioner of Income Taxes (Appeals) – National Faceless Assessment Centre observed that none of the material available on record suggests that the Assessee had an obligation to pay advance tax in terms of Section 209 of the Income Tax Act, 1961. In light of such observation, the ITAT Bench held that the CIT(A) had erred in invoking the provisions of Section 249(4) of the Income Tax Act, 1961 while dismissing the case of the Appellant in limine. Subsequently, ITAT set aside the impugned Order of the CIT(A), while directing the NFAC to dispose of the appeal on merits in accordance with law. To Read the full text of the Order CLICK HERE