Advance tax requirement to appeals against reassessment is limited; appeals not inadmissible if no payment obligation existed.

The note addresses whether the advance-tax precondition in clause (b) of s.249(4) applies to appeals against reassessment completed by best judgment assessment under reassessment provisions. It reasons that the duty to compute and pay advance tax arises only where taxable income is assessable and the assessee has an obligation under advance-tax provisions; where no return was filed and no such obligation existed, clause (b) is not triggered. Consequentially, appeals should not be dismissed as inadmissible solely for non-payment in such reassessment cases and where assessment was ex parte the matter is remanded for fresh adjudication after hearing the assessee.

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Issues: (i) Whether clause (b) of sub-section (4) of Section 249 of the Income-tax Act, 1961 (requiring payment of an amount equal to advance tax where no return has been filed) is applicable to appeals against reassessment orders passed under Section 147 read with Section 144, and whether an appeal can be dismissed as not admissible for non-payment of advance tax in such reassessment cases.

Analysis: The Tribunal examined the statutory requirement in Section 249(4)(b) in the context of reassessment proceedings initiated under Section 148 and completed by best judgment assessment under Section 144 read with Section 147. The Tribunal considered that the obligation to compute and pay advance tax arises under Sections 208 and 209 only where a taxable income is in fact assessable and the assessee is under an obligation to determine and deposit advance tax. In cases of reassessment where no return was filed and where there was no obligation on the assessee to compute or pay advance tax for the year (as asserted in the statement of facts), the statutory condition in Section 249(4)(b) is not triggered. The Tribunal followed earlier decisions of the Tribunal and relevant benches which held that clause (b) does not apply to appeals against reassessment orders and that appeals should not be dismissed in limine on that ground. The Tribunal also noted that where assessment was framed ex parte, the matter should be remanded to the assessing officer for fresh adjudication on merits after giving the assessee opportunity to file evidence and explain the source of deposits.

Conclusion: The appeal against the CIT(A)'s order dismissing the appeal as not admissible under Section 249(4)(b) is set aside; clause (b) of Section 249(4) does not apply to appeals against reassessment orders in the circumstances shown, and the matter is remanded for fresh adjudication allowing the assessee an opportunity of hearing. The decision is in favour of the assessee.

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