Advance Tax Requirement not a bar in reassessment; remand for fresh adjudication with opportunity to be heard.

Clause (b) of Section 249(4) conditioning admission of appeal on payment of advance tax does not apply to reassessment proceedings where no statutory obligation to compute or pay advance tax arises; consequence: appeals in such reassessment cases cannot be dismissed solely for non-payment of advance tax. Where assessment was framed ex parte and the first appellate authority dismissed the appeal in limine without considering merits or the assessee's explanations, the matter must be remanded to the Assessing Officer for de novo adjudication with a reasonable opportunity to be heard.

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Issues: (i) Whether clause (b) of Section 249(4) of the Income-tax Act, 1961, requiring payment of advance tax for admission of appeal, is applicable to reassessment proceedings framed under Sections 147/144 of the Income-tax Act, 1961; (ii) Whether the matter should be remanded to the Assessing Officer for fresh adjudication where assessment was framed ex parte and the first appellate authority dismissed the appeal in limine.

Issue (i): Whether clause (b) of Section 249(4) of the Income-tax Act, 1961 applies to reassessment proceedings and can be used to dismiss an appeal for non-payment of advance tax.

Analysis: The issue was examined with reference to the nature of reassessment proceedings under Sections 147 and 144 of the Income-tax Act, 1961 and the statutory requirement in Section 249(4) of the Income-tax Act, 1961. The Tribunal followed earlier decisions of coordinate Benches which held that clause (b) of Section 249(4) is triggered only where an obligation to pay advance tax exists and that in reassessment proceedings the obligation to compute and pay advance tax does not arise in the same manner as in original assessment proceedings.

Conclusion: Clause (b) of Section 249(4) of the Income-tax Act, 1961 does not apply to bar admission of appeals in reassessment proceedings where no obligation to pay advance tax arises; conclusion in favour of the assessee.

Issue (ii): Whether the assessment should be remanded for fresh adjudication where the assessment was framed ex parte and the first appellate authority dismissed the appeal without adjudicating merits.

Analysis: The Tribunal noted that the assessment was framed ex parte due to non-appearance and that the first appellate authority dismissed the appeal in limine under Section 249(4) of the Income-tax Act, 1961 without considering merits or the assessee's explanations and evidences. In the interest of justice and consistent with the practice of allowing a fair opportunity of hearing, and having regard to the assessee's rural circumstances and the evidences produced concerning agricultural income and bank transactions, the Tribunal found remand appropriate for fresh adjudication by the jurisdictional Assessing Officer with an opportunity to the assessee to be heard.

Conclusion: Matter remanded to the Assessing Officer for fresh adjudication after providing the assessee a reasonable opportunity of hearing; conclusion in favour of the assessee.

Final Conclusion: The Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and remitted the matter to the Assessing Officer for de novo consideration of the merits, and allowed the appeal of the assessee for statistical purposes.

Ratio Decidendi: Clause (b) of Section 249(4) of the Income-tax Act, 1961, which conditions admission of appeal on payment of advance tax, is not applicable to reassessment proceedings where no statutory obligation to compute or pay advance tax exists; where assessment is ex parte and appeal not adjudicated on merits, remand for fresh adjudication with opportunity of hearing is appropriate.

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