Applicability of Section 249(4)(b): appeal cannot be dismissed where original return exists; advance tax not required on disputed additions.

Where the assessee had filed an original return under section 139(1) processed under section 143(1), section 249(4)(b) cannot be invoked to dismiss an appeal for alleged non-payment of advance tax; the CIT(A)'s dismissal on that ground was held erroneous. Advance tax is payable only on admitted or estimated income and cannot be insisted upon as a pre-condition for admission of an appeal in respect of disputed ex parte additions. Procedural infirmities in an ex parte reassessment and alleged non compliance with faceless reassessment requirements warranted quashing of the assessment to the extent necessary and restoration to the AO for fresh adjudication after hearing.

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Issues: (i) Whether an appeal before the Commissioner (Appeals) can be dismissed under section 249(4)(b) of the Income-tax Act, 1961 where the assessee had filed an original return of income under section 139(1); (ii) Whether payment of advance tax as a pre-condition under section 249(4)(b) is required in respect of disputed additions assessed ex parte; (iii) Whether the assessment framed ex parte and alleged non-compliance with faceless reassessment provisions warrants restoration to the Assessing Officer for fresh adjudication.

Issue (i): Whether an appeal can be dismissed under section 249(4)(b) of the Income-tax Act, 1961 where the assessee had filed an original return of income under section 139(1).

Analysis: The Court examined the factual record showing that the assessee had filed the original return under section 139(1) which was processed under section 143(1) and that the Assessing Officer had acknowledged the existence of the original return in the section 148A(d) record. The Court considered precedent of coordinate benches addressing the applicability of section 249(4)(b) where an original return exists and the statutory language limiting the operation of section 249(4)(b) to cases where no return has been filed.

Conclusion: Section 249(4)(b) of the Income-tax Act, 1961 is not applicable to dismiss an appeal where an original return under section 139(1) is on record; the CIT(A)'s dismissal on that ground is erroneous. (In favour of the assessee)

Issue (ii): Whether payment of advance tax as a pre-condition under section 249(4)(b) is required in respect of disputed additions assessed ex parte.

Analysis: The Court analysed the legal principle that advance tax is payable on admitted or estimated income and not on disputed additions that are subject to challenge, noting authorities that advance tax and interest provisions apply to income accepted or admitted. The Court applied this principle to the facts of an ex parte assessment where the additions were disputed and not admitted.

Conclusion: Insisting on payment of advance tax on disputed additions as a pre-condition for admission of appeal is contrary to law; advance tax is not payable on contested ex parte additions. (In favour of the assessee)

Issue (iii): Whether the assessment framed ex parte and alleged non-compliance with faceless reassessment provisions warrants restoration to the Assessing Officer for fresh adjudication.

Analysis: The Court considered that the assessment was completed ex parte after repeated non-compliance by the assessee and that the first appellate authority declined to examine merits on a technical ground. The Court noted concerns regarding procedural infirmities including alleged non-compliance with faceless reassessment requirements under section 151A and the nature of approval under section 151, and emphasised the need for adjudication after affording adequate opportunity of hearing when the foundational conditions for dismissal were incorrectly applied.

Conclusion: The assessment is set aside and restored to the file of the Assessing Officer for fresh adjudication after affording the assessee adequate opportunity of hearing; the matter is remitted for de novo consideration. (In favour of the assessee)

Final Conclusion: The impugned order of the Commissioner (Appeals) is set aside, the assessment order is quashed to the extent necessary, and the matter is restored to the Assessing Officer for fresh adjudication to secure adjudication on merits consistent with statutory requirements and principles of natural justice.

Ratio Decidendi: Where an original return under section 139(1) of the Income-tax Act, 1961 is on record, section 249(4)(b) of the Income-tax Act, 1961 cannot be applied to dismiss an appeal for non-payment of advance tax in response to a notice under section 148; advance tax is payable only on admitted or estimated income and cannot be insisted upon for contested ex parte additions.

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