2011 (9) TMI 1060 - AT - Income Tax

Form of appeal and limitation - Section 249(4) stipulate payment of admitted tax on the returned income as a pre-requisite and mandatory condition for admission of an appeal - Held that - The provisions of section 249(4) as they stand subsequent to 1.4.1989 do not leave any discretion in the appellate authority since such a discretion earlier vested in the appellate authorities was withdrawn by Direct Tax Laws (Amendment) Act 1989 with effect from 1.4.1989. The undisputed fact that the assessee had paid entire tax and interest as on 30-4-2010 and the first appellate authority in our considered view should have condoned the delay in payment and disposed off the appeal on merit. The impugned order of the CIT (A) is set aside and matter is restored to his file with a direction to admit the appeal of the assessee after taking on record the evidences of TDS deposited by the assessee and then to decide the appeal before him in accordance with law on merits thereof after allowing reasonable opportunity of hearing to both the parties.

Summary

Issues:
Appeal against order of CIT (A) - Assessment year 2008-09 - Dismissal of appeal in limine without considering merits - Interpretation of section 249(4) - Payment of tax and interest as prerequisite for admission of appeal - Discretion of appellate authority - Condonation of delay in payment - Restoration of appeal for decision on merits.

Analysis:
The appeal was filed against the order of the CIT (A) for the assessment year 2008-09. The grounds raised by the assessee included challenging the CIT (A)'s dismissal of the appeal without considering the merits, interpretation of section 249(4), and the requirement of payment of tax and interest as a prerequisite for admission of the appeal. The assessee argued that tax had been paid before the appeal was filed, and only interest remained, which was also paid later. The departmental representative contended that compliance with section 249(4) was necessary before the appeal's disposal.

The Tribunal considered the submissions and the provisions of section 249(4) of the Act. It noted that the section mandated the payment of admitted tax on the returned income as a prerequisite for appeal admission, without discretion for the appellate authority. The Act, post 1.4.1989, withdrew any discretion previously available to appellate authorities. The Tribunal found that the assessee had paid the entire tax and interest before a certain date, and the delay in payment should have been condoned by the CIT (A) for the appeal to be decided on its merits. Consequently, the Tribunal set aside the CIT (A)'s order and directed the appeal's admission, instructing the CIT (A) to consider the TDS evidence and decide the appeal on its merits after providing a fair hearing to both parties.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the importance of deciding the issue on its merits. The judgment highlighted the necessity of complying with statutory provisions, the lack of discretion in certain matters, and the obligation of appellate authorities to ensure fair consideration of appeals based on the facts and circumstances of each case.