Payment of admitted tax is a precondition for appeal admission; appeal may proceed once tax is discharged or appropriated.

The Court examined the statutory precondition in Section 249(4)(a) requiring payment of the tax admitted in the return as a condition for admission of an appeal and held that non payment deprives the Commissioner of Income Tax (Appeals) of jurisdiction. The assessment arose from proceedings under Section 153C and the admitted tax remained unpaid, though auction proceedings for seized property were underway. The Court directed that appellate orders dismissing the appeals for non payment be set aside and the matters remitted to the CIT(A) to decide the appeals on merits once proof of payment or appropriation of sale proceeds toward the admitted tax is produced.

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Issues: (i) Whether the appeal was rightly dismissed by the Commissioner of Income Tax (Appeals) and the Tribunal for non-payment of the admitted tax under Section 249(4)(a) of the Income-tax Act, 1961, and whether the Assessing Officer's proceedings under Section 153C of the Income-tax Act, 1961 affect the jurisdiction to entertain the appeal.

Analysis: The Court examined the statutory requirement under Section 249(4)(a) of the Income-tax Act, 1961 which mandates payment of the tax due on the income returned as a precondition for admission of an appeal to the Commissioner of Income Tax (Appeals). The assessment in the present case was completed under Section 153C of the Income-tax Act, 1961 and the assessee filed a return pursuant to the notice under Section 153C. The admitted tax arising from that return remained unpaid. The Court noted binding precedents establishing that non-payment of the admitted tax deprives the CIT(A) of jurisdiction to admit the appeal. The Court also considered the assessee's representation seeking auction of seized property and the Revenue's statement that auction proceedings were underway with proceeds to be appropriated towards the tax dues. Taking these facts together, the Court observed that if proof of payment of the admitted tax is produced (either payment by the assessee or appropriation of sale proceeds by the Assessing Officer), the procedural impediment under Section 249(4)(a) would be removed and the appeal could be considered on merits by the CIT(A).

Conclusion: The Court held that the appeals cannot be entertained by the CIT(A) unless the admitted tax is discharged, but directed that the appellate orders be set aside and the matter remitted to the CIT(A) to decide the appeal on merits upon proof of payment of the admitted tax. This result is favourable to the appellant as the orders dismissing the appeal for non-payment are set aside and the plea may be adjudicated if the statutory precondition is satisfied.

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