Advance Tax Requirement in Reassessment: appeal restored where original return and advance tax payment existed.

ITAT considered whether clause (b) of Section 249(4) - requiring payment equal to advance tax to preserve an appeal - applies to reassessment proceedings under Section 148 where the original return was filed and advance tax corresponding to returned income was paid. The Tribunal held that the advance-tax payment condition for adjudication is not applicable to defeat an appeal in reassessment when reassessment benefits revenue and the original return/advance tax position exists, and accordingly set aside the CIT(A) dismissal and restored the appeal for fresh disposal.

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Issues: Whether the order of the CIT(A) dismissing the assessee's appeal under Section 249(4) of the Income-tax Act, 1961 for failure to file return of income and non-payment of amount equal to advance tax in reassessment proceedings was sustainable.

Analysis: The proceeding concerns reassessment initiated under Section 148 of the Income-tax Act, 1961 and additions made under Section 69C and Section 144 of the Income-tax Act, 1961. The CIT(A) dismissed the appeal on the basis that the assessee did not indicate compliance and had not paid an amount equal to advance tax as required under clause (b) of Section 249(4) of the Income-tax Act, 1961. The Tribunal examined the nature of reassessment proceedings and the applicability of the advance tax payment requirement in clause (b) of Section 249(4) of the Income-tax Act, 1961, noting that the original return for the year had been filed and advance tax corresponding to the returned income was paid. The Tribunal observed that clause (b) of Section 249(4) deals with conditions for adjudication under certain circumstances and that requiring payment of advance tax in reassessment proceedings for the purpose of maintaining an appeal does not apply where reassessment benefits revenue and the original return/advance tax position exists.

Conclusion: The CIT(A)'s order dismissing the appeal for non-compliance with Section 249(4) of the Income-tax Act, 1961 is set aside and the appeal is restored to the file of the CIT(A) for fresh disposal. The decision is in favour of the assessee on this procedural point.

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