2015 (7) TMI 284 - AT - Income Tax

Appeal Dismissed for Non-Payment of Tax: Understanding Section 249(4)

Bichitra Pegu Versus Assistant Commissioner of Income-tax, Circle-1, Guwahati

The Tribunal dismissed the appeal, upholding the CIT(A)'s decision that the appeal was non-admissible due to the appellant's failure to pay the tax due on ... Condition of payment of tax before filing of an appeal - Stay - Rejection of appeals on the ground of maintainability in the light of section 249(4) - Held that: - The assessee has failed to comply with the mandatory requirement of section 249(4) of the Act. In the instant case, ld CIT(A) has categorically observed that 'from the perusal of assessment order and calculation of tax there was no valuable assets seized in the hands of the appellant or even belonging in the name of the appellant. In fact, provision u/s. 158BD was initiated in this case. Neither any assets belonging in the appellant had been seized nor there is any scope for application of seized assets u/s. 132B of the I. T.Act. The seizure made in any other person and assets belonging to other person could not have been adjusted with the tax due on the income returned by the appellant. The appellant had not paid any tax due on the income returned at the time of filing or before the filing of appeal or even at the time when appeal was in heard.' There is no material on record to controvert the above observations of ld CIT(A). Admittedly, the assessee has furnished the return of income for the block period under consideration declaring 'undisclosed income' at ₹ 26,73,303/- as it is evident from the copy of return dated 11.5.2001 submitted before the Assessing officer. It appears that the assessee filed an application dated 9.5.2001 alongwith return of income stating that the cash and other valuables standing in her name and/or admitted as in the return may be adjusted against her admitted tax liability. However, there is no truth in the said application. It is observed that during the course of search no cash and other valuables were seized belonging to the assessee. It is apparent from the record that the assessee had failed to pay tax due on the income returned at the time of filing the return or even before filing of appeal or even at the time when appeal was heard by the ld CIT(A). Thus, as per the requirements of section 249(4)(a) of the Act, paying of tax due on income returned at the time of filing was not complied with by the assessee and, therefore, the ld CIT(A) has correctly refused to admit the appeal of the assessee as per the provisions of section 249(4) of the Act. See D. Komalakshi v. Dy. CIT [2006 (11) TMI 155 - KARNATAKA High Court ] - Decided against assessee. Issues Involved:1. Admission of appeal under section 249(4) of the Income Tax Act.2. Validity of proceedings under section 158BC(c)/143(3) of the Income Tax Act.3. Legality of jurisdiction assumed under section 132 of the Income Tax Act.4. Interlinked appeals involving family members.5. Determination of 'undisclosed income' by the Assessing Officer.6. Attribution of investments to family members.7. Assessment of investments made by the appellant.8. Validity of the assessment order based on materials on record.Issue-wise Detailed Analysis:1. Admission of Appeal under Section 249(4):The primary issue was whether the appeal could be admitted under section 249(4) of the Income Tax Act, which mandates the payment of tax due on the returned income at the time of filing the appeal. The appellant had not paid the tax due on the returned income at the time of filing the return, the appeal, or even when the appeal was heard. The Tribunal confirmed that the CIT(A) correctly refused to admit the appeal due to non-compliance with the mandatory requirement of section 249(4). The Tribunal referenced the Hon'ble Karnataka High Court's decision in D. Komalakshi v. Dy. CIT, which upheld the necessity of tax payment for appeal admission.2. Validity of Proceedings under Section 158BC(c)/143(3):The appellant contended that the CIT(A) erred in sustaining the order passed under section 158BC(c)/143(3). The Tribunal did not find merit in this argument since the appellant failed to comply with the tax payment requirement, rendering the appeal non-admissible.3. Legality of Jurisdiction Assumed under Section 132:The appellant argued that the jurisdiction assumed under section 132 was illegal. However, the Tribunal upheld the CIT(A)'s decision, noting that no valuable assets belonging to the appellant were seized during the search, and thus, the jurisdiction under section 132 was appropriately assumed.4. Interlinked Appeals Involving Family Members:The appellant claimed that the CIT(A) erred by not hearing her appeal along with related appeals of her son and husband for the same block period. The Tribunal found no merit in this argument, as the primary issue was the non-payment of tax, making the appeal non-admissible regardless of the interlinked nature of the cases.5. Determination of 'Undisclosed Income':The appellant contested the assessment of 'undisclosed income' at Rs. 14,35,652 instead of Rs. 38,33,260 as returned. The Tribunal upheld the CIT(A)'s decision, emphasizing the appellant's failure to comply with the tax payment requirement, which was a prerequisite for admitting the appeal.6. Attribution of Investments to Family Members:The appellant argued that the investments made in the names of her son and husband should be considered her 'undisclosed income.' The Tribunal upheld the CIT(A)'s decision, noting that the appeal could not be admitted due to non-payment of tax, thus not addressing the merits of this argument.7. Assessment of Investments Made by the Appellant:The appellant contended that the investments made in the names of her family members were from her 'undisclosed income.' The Tribunal found no merit in this argument due to the primary issue of non-payment of tax, rendering the appeal non-admissible.8. Validity of the Assessment Order Based on Materials on Record:The appellant argued that the assessment order was contrary to the materials on record. The Tribunal upheld the CIT(A)'s decision, emphasizing the appellant's failure to pay the tax due, which was a mandatory requirement for admitting the appeal.Conclusion:The Tribunal dismissed the appeal, confirming the CIT(A)'s decision that the appeal was non-admissible due to the appellant's failure to comply with the mandatory requirement of paying the tax due on the returned income at the time of filing the appeal, as stipulated under section 249(4) of the Income Tax Act. The Tribunal referenced relevant case law to support its decision, emphasizing the importance of compliance with tax payment requirements for the admission of appeals.