Non-payment of self-assessment tax when filing appeal is curable defect, not dismissal ground under section 249(4)(a)

ITAT Indore held that non-payment of self-assessment tax at the time of filing appeal constitutes a defect in the appeal rather than grounds for dismissal. Under section 249(4)(a), tax payment is required when filing the appeal, but subsequent payment cures the defect. Once the assessee made full payment of tax due on return income, the appeals should have been decided on merits instead of being dismissed in limine. The delay in tax payment should be treated as delay in filing appeal, not as grounds for avoiding the appeal entirely.

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Issues Involved:
1. Non-admissibility of appeal due to non-payment of self-assessment tax at the time of filing.
2. Non-appreciation of judicial pronouncements regarding subsequent payment of admitted tax.

Issue-wise Detailed Analysis:

1. Non-admissibility of appeal due to non-payment of self-assessment tax at the time of filing:
The assessee's appeals were dismissed by the Commissioner of Income Tax (Appeals) (CIT(A)) due to non-payment of self-assessment tax at the time of filing, as required by Section 249(4)(a) of the Income Tax Act. The assessee contended that the tax was subsequently paid during the pendency of the appeal due to financial crises and business closure. The Bangalore Bench of the Tribunal in the case of M/s. Fiza Developers & Inter Trade P. Ltd. held that once the admitted tax is fully paid, the appeal should be decided on merits rather than dismissed in limine. The Tribunal emphasized that non-compliance with Section 249(4)(a) results in a defect in the appeal, not a void appeal, and subsequent payment of tax validates the appeal. The Tribunal also referenced the Hon'ble Supreme Court's decision in CIT vs. Filmistan Ltd., which clarified that an appeal is not properly filed until the tax is paid, but once paid, the appeal should proceed on merits.

2. Non-appreciation of judicial pronouncements regarding subsequent payment of admitted tax:
The assessee argued that various High Court and Apex Court decisions support the admission of appeals if the admitted tax is paid subsequently. The Tribunal cited the Karnataka High Court's rulings in CIT v. K. Satish Kumar Singh and Principal CIT v. Abdul Ahid M, which held that appeals should be admitted and adjudicated on merits if the admitted tax is paid at any point before the appeal is disposed of. The Tribunal also referred to the Mumbai ITAT's decision in Bhumiraj Constructions vs. ACIT, which distinguished between mandatory and directory provisions, concluding that the requirement to pay tax before filing an appeal is directory, not mandatory. Therefore, if the tax is paid later, the appeal should be considered valid and heard on merits.

Conclusion:
The Tribunal concluded that the non-payment of tax at the time of filing the appeal constituted a defect, not a void appeal. Once the tax was paid, the appeal should be admitted and decided on merits. For the assessment year 2011-12, the Tribunal noted that the CIT(A) should verify the refund from the CPC portal before proceeding. Consequently, the Tribunal set aside the CIT(A)'s orders and remanded the appeals for adjudication on merits, ensuring the assessee is given an appropriate opportunity of hearing.

Judgment:
The appeals of the assessee were allowed for statistical purposes, and the cases were remanded to the CIT(A) for a decision on merits after verifying the payment of taxes and providing a hearing opportunity to the assessee.

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