Section 249(4)(a) exemption may apply where seizure or forfeiture prevents payment of tax on returned income.

Inability to pay tax on the returned income at the time of filing a first appeal may justify exemption from the pre-condition in section 249(4)(a) of the Income-tax Act. The assessee's assets were under seizure or forfeiture-related restrictions, the released silver had been sold and its proceeds used for tax payment, and no usable resources were shown to be available. On these facts, reliance on agricultural income and other assets was found insufficient, and refusal to admit the appeal for non-compliance was set aside with a direction to decide the matter on merits.

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

Analysis: The assessee's silver and other assets had been seized or were otherwise affected by proceedings under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. The released silver had already been sold and the proceeds utilised towards tax payment. The remaining property was under the said forfeiture proceedings, and the assessee was not shown to have usable resources from which the tax on the returned income could be paid at the time of filing the appeal. The reliance placed on agricultural income and other assets was found insufficient in the circumstances.

Conclusion: The assessee was entitled to exemption from the requirement in section 249(4)(a), and the rejection of the appeal for non-compliance was not justified.

Final Conclusion: The appellate order refusing admission of the appeal was set aside and the matter was directed to be decided on merits after giving the assessee a reasonable opportunity of being heard.

Ratio Decidendi: Where the assessee is unable, because of seizure or forfeiture-related restrictions on assets, to pay the tax on the returned income at the time of filing the appeal, such inability may constitute good and sufficient reason for exemption from the statutory pre-condition to maintain the appeal.

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