2015 (7) TMI 1066 - AT - Income Tax

Non maintainability of appeal invoking the provisions of Section 249(4) - assessee had not paid the admitted taxes - Held that - As far as the order of CIT(A) in invoking the provisions of Section 249(4)(a) the same cannot be faulted as assessee had not remitted the admitted tax. However assessee s contention that it has financial difficulty at that time for payment of tax was not examined by the CIT(A). Now assessee has remitted the admitted tax and furnished the challan in support of the same. We are of the opinion that assessee s appeal should be considered on merits. For this purpose we set aside the impugned order of the CIT(A) and restore the appeal memo for fresh consideration. Since the appeal will be deemed to have been filed on the date admitted tax has been paid assessee is directed to make necessary condonation petition and CIT(A) should consider it on its merits. CIT(A) is also directed to examine the appeal on merits after granting the necessary condonation. Assessee s grounds are considered allowed accordingly.

Summary

Issues:
Dismissal of appeal for non-payment of admitted taxes invoking Section 249(4) of the Income Tax Act.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) by the assessee, a domestic company not substantially interested by the public. The issue in the appeal was the dismissal of the appeal for not being maintainable due to non-payment of admitted taxes, as per Section 249(4) of the Income Tax Act. The Assessing Officer had raised a demand of &8377; 6,15,76,682/- after making certain additions in the scrutiny assessment. The CIT(A) did not entertain the appeal as the admitted taxes were not paid by the assessee.

The assessee, through its counsel, argued that they had paid the due taxes of &8377; 70,70,428/- as self-assessment tax after the dismissal of the appeal by the CIT(A). The counsel cited various case laws to support the argument that the appeal should be restored since the taxes were paid subsequently. The Departmental Representative (DR) contended that the CIT(A) was justified in dismissing the appeal for non-payment of admitted tax.

The ITAT considered the contentions of both parties and examined the records. While acknowledging the validity of the CIT(A)'s decision based on Section 249(4)(a), the ITAT noted that the financial difficulties of the assessee at the time of non-payment were not considered by the CIT(A). Referring to a similar case, the ITAT set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication.

Citing the decision of the Karnataka High Court, the ITAT emphasized that if the admitted tax is paid after the dismissal of the appeal, the appellate authority can recall the order and decide the appeal on merits. Since the assessee had remitted the admitted tax and provided supporting documents, the ITAT directed the CIT(A) to consider the appeal on merits after necessary condonation. The appeal was allowed for statistical purposes, and the order was pronounced on 30th July 2015.