Senior citizen constantly filing salary return not liable to advance tax

Case Details: Jayantilal D Ray v. DCIT - [2022] 138 taxmann.com 157 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• • P.M. Jagtap, Vice President & Siddhartha Nautiyal, Judicial Member
  • Sunil Talati, A.R. for the Appellant.
  • C.S. Sharma, Sr. DR for the Respondent.

Facts of the Case

Assessee was a senior citizen deriving income from salary, income from other sources, and income from shares from a partnership firm. The assessee was served with the intimation under section 143(1) passed by CPC for non-compliance with advance tax provisions along with the demand of interest under sections 234B & 234C.

Assessee approached CIT(A) against the intimation of CPC. CIT(A) held that in absence of a copy of the terms of service, the assessee had failed to prove the employer-employee relationship. Accordingly, CIT(A) held that the assessee was earning business and professional income.

Aggrieved-assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that as per section 207(2), a resident individual who does not have any income chargeable under the head “profit and gains from business or profession” and who is of the age of 60 years or more is not required to pay advance tax.

The assessee was clearly above the age of 60 years. Further, he had no income which is chargeable under the head “profits and gains” of business and profession. The CIT(A) had not brought on record any cogent material to demonstrate that the assessee was earning income from business or profession and is not drawing a salary.

The CIT(A) primarily relied on the understanding that the assessee himself was a managing director of the company in which he is having control and thus he is not entitled to earn a salary from the said company. Further, the assessee didn’t furnish a copy of the terms of service with other employers.

Since the assessee was a senior citizen above 60 years of age, had been consistently filing returns declaring income earned as salary income from these concerns and tax had been deducted under section 192, the CIT(A) had erred in confirming the charging of interest for non-compliance of advance tax provisions.

List of Cases Referred to

• • CIT v. Anjum M. H. Ghaswala [2001] 119 Taxman 352/252 ITR 1 (SC) (para 4).