Appeal upheld by ITAT despite challenge on maintainability under section 249(4). Tribunal directs fresh disposal on merits.

The appeal before ITAT was found maintainable despite being challenged on grounds of the order falling under section 249(4). The Tribunal established that such orders are appealable under section 250, distinguishing them from cases with interim orders. Regarding the default under section 249(4) by the assessee, the Tribunal ruled in favor of the appellant, noting their prompt request for seized cash adjustment against tax liability. The delay in adjustment was not attributed to the appellant, and the Tribunal directed a fresh disposal of the appeal on merits, deeming the CIT(A) unjustified in finding a default.

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Issues:
1. Maintainability of appeal before ITAT.
2. Default under section 249(4) by the assessee.

Analysis:

Issue 1: Maintainability of appeal before ITAT
The appeal before ITAT was challenged on the grounds that the order of CIT(A) was under section 249(4) and not under section 250, making it non-appealable. The appellant argued that the order dismissing the appeal was under section 250, citing relevant case laws. The Tribunal referred to various judgments, including one by the Madhya Pradesh High Court, to establish that such orders are appealable under section 250. The Tribunal differentiated the present case from previous cases where appeals were held to be not competent due to interim orders, emphasizing that the order in this case was final and substantive, thus making the appeal to ITAT competent.

Issue 2: Default under section 249(4) by the assessee
The dispute arose from the CIT(A) dismissing the appeal due to non-payment of tax on the returned income as per section 249(4). The appellant contended that the cash seized during a search operation was adjusted against the tax liability, exceeding the tax due on the returned income. The appellant consistently requested the seized cash to be treated as tax paid. The revenue eventually adjusted the seized amount against the tax liability. The Tribunal held that the appellant had promptly requested the adjustment of seized cash against tax liability, and the delay in adjustment was not the appellant's fault. The Tribunal further clarified that when the assessee requests seized cash to be treated as tax paid, there should be no objection from the revenue. Consequently, the Tribunal found that the CIT(A) was unjustified in deeming a default under section 249(4) and directed a fresh disposal of the appeal on merits.

In conclusion, the appeal before ITAT was deemed maintainable, and the CIT(A) was found to be unjustified in holding a default under section 249(4) by the assessee. The Tribunal set aside the CIT(A)'s order and remanded the matter for a fresh disposal of the appeal on merits.

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