2001 (12) TMI 208 - AT - Income Tax

Appeal can proceed without full tax payment before ITAT

The ITAT ruled that the appeal was maintainable before them despite the non-payment of the full admitted tax before filing. The Tribunal found that the ... Appeal and limitations Issues:Maintainability of appeal based on payment of admitted tax before filing appeal before the ITAT.Analysis:The judgment deals with the issue of the maintainability of an appeal before the Income Tax Appellate Tribunal (ITAT) based on the payment of admitted tax before filing the appeal. The Senior Departmental Representative raised a preliminary objection regarding the maintainability of the appeal, citing section 249(4)(a) of the Act, which requires the assessee to pay the admitted tax before filing the appeal. The authorized representative of the assessee argued that this provision should not apply to appeals filed under section 253(1) of the Act, falling under Chapter XX-B. The contention was supported by the fact that the assessee was willing to make the balance payment if directed by the Tribunal, as certain funds were seized by the revenue. The issue before the Tribunal was whether the provisions of section 249(4)(a) under Chapter XX-A also apply to appeals filed before the ITAT.The Tribunal considered the submissions of both parties and reviewed relevant case law, including a decision by the Chennai Bench of the Tribunal. The Chennai Bench's decision emphasized the legislative intent behind requiring payment of admitted tax before filing an appeal. However, the Tribunal found that the word 'Chapter' in section 249(4) did not necessarily encompass both Chapter XX-A and XX-B. The Tribunal noted that the Act's provisions did not explicitly mandate payment of admitted tax before filing an appeal to the ITAT. The structure of Chapter XX, with distinct headings for appeals to different authorities, indicated that the requirement to pay admitted tax might be specific to appeals before the Deputy Commissioner (Appeals) and Commissioner (Appeals), rather than the ITAT.Additionally, the Tribunal observed that Form No. 36 for filing appeals to the ITAT did not include a requirement to provide information on payment of admitted tax, unlike Form No. 35 for appeals to the Commissioner (Appeals). This further supported the conclusion that the Act did not impose a mandatory condition of paying admitted tax before filing an appeal before the ITAT. Ultimately, the Tribunal ruled against the revenue's preliminary objection, finding no substance in the argument raised by the Senior Departmental Representative. The Tribunal directed the appeal to be fixed for hearing on merits, indicating that the appeal was maintainable despite the non-payment of the full admitted tax before filing.