Appeal allowed for fresh adjudication after payment of admitted taxes (A)

The appeal was allowed by the ITAT for statistical purposes, remitting the matter back to the CIT(A) for fresh adjudication. The ITAT emphasized that if admitted taxes are paid after appeal dismissal, the appellate authority can recall the order for merit consideration. The ITAT directed the CIT(A) to review the appeal on merits after necessary condonation, considering the assessee's payment of admitted taxes and supporting documents. The decision was based on a similar case and the Karnataka HC ruling, with acknowledgment of the assessee's financial difficulties during non-payment.

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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.

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