Pre-admission tax payment exemption applies where assets are not immediately realisable to meet returned-income liability.

Under section 249(4)(a) of the Income-tax Act, an assessee may be exempted from the precondition of paying tax on returned income before an appeal is admitted where good and sufficient reason exists. Here, the Tribunal noted that the assessee's assets, including seized silver and other property under forfeiture proceedings, were not shown to be immediately realisable, and the agricultural income relied upon was not available for prompt payment of the admitted tax liability. On those facts, the statutory proviso for exemption ought to have been applied. The rejection of the appeal for non-payment of tax on returned income was therefore unjustified, and exemption from compliance was held to be available.

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Issues: Whether the assessee had shown good and sufficient reason for exemption from the requirement under section 249(4)(a) of the Income-tax Act, 1961 to pay the tax due on the returned income before the appeal could be admitted.

Analysis: The assessee had faced seizure and forfeiture proceedings in respect of his assets, including silver that had been seized and only partly released, and the remaining assets were also under the forfeiture regime. The Tribunal found that the agricultural income and other assets relied upon by the appellate authority were not shown to be available for immediate realisation for payment of the admitted tax liability. In these circumstances, the Tribunal was satisfied that the assessee was not in a position to pay the tax on the returned income when the appeal was filed, and that the statutory proviso enabling exemption should have been applied.

Conclusion: The assessee was entitled to exemption from compliance with section 249(4)(a), and the rejection of the appeal for non-payment of tax on the returned income was unjustified.

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