Tax Appeal Revived for Adjudication After Payment - ITAT Emphasizes Fair Hearing

Ms. Radhika R. Desai Versus Dy. Commissioner of Income-tax

Ms. Radhika R. Desai Versus Dy. Commissioner of Income-tax - TMI Issues:
1. Whether the appeal order dismissing the appeal due to non-payment of taxes can be restored by the CIT(A) or only by the Tribunal.
2. Whether the provisions of sec. 249(4) apply to cases where the income offered in the return is disputed.
3. Whether the delay in filing the appeal can be condoned due to reasonable and sufficient cause.
4. Whether the various grounds of appeal arising from the assessment order can be adjudicated.

Analysis:
1. The appeal filed by the assessee was dismissed by CIT(Appeals) for non-payment of taxes as per section 249(4) of the Income-tax Act, 1961. The assessee argued that the tax was paid later and requested the appeal to be restored. CIT(Appeals rejected this citing lack of power to recall the order. However, the ITAT held that if the defect of non-payment is cured, the appeal can be revived. The ITAT referred to a similar case from Ahmedabad ITAT and directed CIT(Appeals to decide the appeal on merits after the tax payment, following the decision of a coordinate bench.

2. The ITAT considered the arguments of the learned A.R. that the appeal should be admitted on merits after the tax payment, citing a case precedent where a similar situation led to the revival of the appeal by the first appellate authority. The ITAT found that the deficiency of non-payment was removed, and thus, the appeal should have been admitted and decided on merits by the CIT(Appeals).

3. The ITAT reviewed the submissions of both parties and noted that the assessee had paid the tax due on the returned income after the initial dismissal of the appeal. Despite the strong contention by the learned DR, the ITAT found that the change of address had caused non-compliance with notices and directed the matter to be restored back to the file of CIT(Appeals) for further proceedings.

4. The ITAT, after considering all arguments and relevant material, allowed the appeal filed by the assessee for statistical purposes. The ITAT directed the CIT(Appeals to decide the appeal on merits after giving the assessee a reasonable opportunity of hearing, as the tax on the returned income had been paid, thus removing the defect that led to the initial dismissal of the appeal.