Mandatory tax payment before first appeal remains a condition precedent; non-payment made the appeal not maintainable.

Payment of tax due on the returned income was treated as a mandatory condition precedent for admission of the first appeal under section 249(4) of the Income-tax Act, 1961. The assessee had filed a block return declaring undisclosed income but had not paid the admitted tax when filing the appeal. The record showed no seizure of assets belonging to the assessee that could justify adjustment against that liability, and seizures from other persons could not be used for that purpose. The Commissioner (Appeals) was therefore correct in holding the appeal not maintainable, and the refusal to admit the appeal was upheld.

---

---

Issues: Whether the appeal before the Commissioner (Appeals) was barred for non-payment of tax due on the returned income under section 249(4) of the Income-tax Act, 1961.

Analysis: The assessee filed a block return declaring undisclosed income but did not pay the tax due on the returned income at the time of filing the appeal. The record showed that no assets belonging to the assessee had been seized so as to justify adjustment against the admitted tax liability, and the attempt to treat seizures from other persons as available for such adjustment was not accepted. On these facts, the statutory requirement of paying the tax due on the returned income before admission of the appeal was not satisfied. The mandatory nature of the provision and the condition precedent for admission of the appeal were applied.

Conclusion: The appeal before the Commissioner (Appeals) was not maintainable for non-compliance with section 249(4), and the refusal to admit the appeal was upheld against the assessee.

Final Conclusion: The statutory bar to admission of the first appeal operated because the admitted tax was not paid, so the dismissal of the assessee's appeal was sustained.

Ratio Decidendi: Under section 249(4) of the Income-tax Act, 1961, payment of tax due on the income returned is a mandatory condition precedent for admission of the appeal where a return has been filed.

---