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March 25, 2023

Individuals who are 60 years of age or older who do not have business income are exempt from paying advance tax

Individuals who are 60 years of age or older who do not have business income are exempt from paying advance tax

Fact and issue of the case

The appeal has been preferred by the Assessee against the order dated 31.12.2018 of Ld. Commissioner of Income Tax (Appeals)-I, Noida (hereinafter referred as Ld. First Appellate Authority or in short Ld. „FAA’) in appeal No. 425/2017-18/Noida arising out of an appeal before it against the assessment order dated 15.12.2017 passed u/s 144/147 of the Income Tax Act, 1961 (hereinafter referred as „the Act’) by the ld Assessing officer ITO, Ward-2(5), Noida (hereinafter referred as the Ld. AO).

Facts in brief are that a Non-PAN AIR information was received that the Assessee sold an immovable property of Rs. 2,62,35,074/- during the FY 2009-10. To verify the transaction an information was called u/s 133(6) of the Act. However, Assessee did not respond. The ld AO observed on the basis of sale deed that the plot bearing Khata No. 267, Village-Duryai, Pargana & Tehysil-Dadri, Noida, Distt. Gautam Budh Nagar was sold. Therefore, proceedings u/s 147 of the Act was initiated and notice u/s 148 of the Act was issued after prior approval of ld Pr. CIT, Noida. The Assessee did not furnish return of income u/s 148 of the Act. The Assessee had also not furnished PAN. Notice u/s 142(1) along with questionnaire was issued. The Assessee submitted that the land sold was agricultural land and was of ancestral nature. The Assessee claimed that it was situated at a distance of 12 kms from the local limits of Dadri Municipality and the land sold by him does not fall in the definition of capital asset as defined in section 2(14) of the Act. However, no return of income for Assessment Year 2010-11 or PAN was submitted therefore, show cause notice u/s 144 of the Act was issued and no reply was received. The assessment was completed u/s 147/144 of the Act holding that land sold was capital asset and that the Assessee had failed to submit ITR for Assessment Year 2010-11 and thus long term capital gain of Rs. 1,31,17,537/- was added to the income of the Assessee. As it was challenged in appeal before the ld CIT(A), the ld First Appellate Authority did not decide the appeal on merits but passed the impugned order by dismissing the appeal for non compliance of mandatory provision of section 249(4) of the Act.

Observation of the court

Perusal of the aforesaid provisions of section 207 of the Act show that it talks about payment of advance tax in regard to total income which would be chargeable to tax. However, an individual resident of 60 years or more who, any time during the previous year, was not having any income chargeable under the head “profit and gains” of business or profession, is not required to pay the advance tax. When read in context of section 249(4)(b) it has to be observed that where no return has been filed by the assessee, then in that case at time of appeal before the CIT(A), the assessee has to pay an amount equal to the amount of advance tax which was „payable by him‟. However, here no advance tax was payable as the assessee was over 60 years of age and not having any income from P&G. Further, the proviso to the Section 249(4) of the Act provides that if sufficient reason are brought on record in writing the CIT(A) may exempt the Assessee from the operation of provision of clause 249(4)(b) of the Act.

The record does not show if the Assessee has claimed before the ld CIT(A) that it was entitled to any exemption by virtue of section 207. The impugned order was passed in the absence of Assessee and the impugned order dated 31.12.2018 in paragraph Nos. 2 to 12 mention that inspite of notice being issued the same could not be served on the Assessee and therefore, there was no representation of the Assessee before the ld CIT(A) and who proceeded to dismiss the appeal by invoking provision of section 249(4)(b) of the Act without giving taking into consideration the facts which assessee claims made him not liable to pay the advance tax.

In the light of the aforesaid the impugned order is set aside and the issue is restored to the file of the ld CIT(A) to decide the question of applicability of section 249(4) of the Act on merits of claim of the assessee, after giving an opportunity of hearing to the Assessee.

The appeal is allowed for statistical purposes.

Order pronounced in the open court on 21/02/2023.


In the result, appeal of the assessee is allowed and ruled in favour of the assessee

Read the full order from here


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