Tax Payment Requirement under section 249(4): TDS-paid tax on filed return suffices, appeal restored for merits.

Whether dismissal under section 249(4) for non-payment of tax was lawful: tribunal held the statutory condition for admission requires tax due on a filed return to be paid, and tax discharged by deduction at source (supported by Form 16 and the return) satisfies that condition; the advance tax provision applies only where no return is filed. A contrary entry in Form 35 was treated as an inadvertent error and did not justify summary dismissal. Outcome: dismissal under section 249(4) was unsustainable and the appeal is restored for adjudication on merits.

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Issues: Whether the dismissal of the assessee's appeal by the Commissioner (Appeals) under section 249(4) of the Income-tax Act, 1961 was lawful.

Analysis: Section 249(4) provides that an appeal shall not be admitted unless, where a return has been filed, the assessee has paid the tax due on the income returned by him; where no return has been filed, an amount equal to the advance tax payable has been paid. The assessee filed the original return of income for the year and the tax liability shown in the return was discharged by deduction at source, supported by Form No. 16 and the return filed on record. The requirement to pay advance tax arises only when no return has been filed; it is not applicable where a return has been filed and tax due on that return has been paid by deduction at source. A contrary entry in Form No. 35 (Column 9) recording 'No' to advance tax was found to be an inadvertent error and cannot justify summary dismissal at the threshold when documentary evidence demonstrates payment of tax due on the return. In these circumstances, the appellate authority erred in dismissing the appeal in limine under section 249(4) without disposing the grounds on merits.

Conclusion: The dismissal of the appeal under section 249(4) is unsustainable; the condition for admission of the appeal under section 249(4)(a) is satisfied and the appeal is restored to the file of the Commissioner (Appeals) for adjudication on merits in favour of the assessee.

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