TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 288
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.... 4. The assessee is an individual, engaged in the business of manufacture of readymade garments. The assessee belongs to one Mali Group of cases, wherein, a search & seizure action u/s 132(1) of the Act was carried out on 28.06.2006. Consequent to the search action, impugned assessment was made by the Assessing Officer u/s 143(3) of the Act, wherein, the total income was determined at Rs. 48,21,570/-. Against the said assessment, assessee was aggrieved on account of the action of the Assessing Officer in making certain additions/disallowances. Assessee carried the matter in appeal before the CIT(A). 5. The CIT(A) noticed that the taxes due on the income returned u/s 153A of the Act were not paid by the assessee on the date of filing of the appeal and as a consequence, he invoked the provisions of section 249(4) of the Act and dismissed the appeal as un-admitted. 6. Before us, the Ld. Representative for the assessee pointed out that though the taxes due on the income returned were not paid by the assessee prior to the date of filing of appeal with the CIT(A) i.e. 27.01.2009 but the same were duly paid much before the CIT(A) passed the impugned order and in this context, he has re....
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.... tax due on the income returned prior to the filing of appeal and, therefore, the CIT(A) made no mistake in dismissing the appeal of assessee inlimine, as un-admitted. 8. We have carefully considered the rival submissions. Factually speaking, it is not disputed by the Revenue that assessee has paid the taxes due on the income returned after filing of appeal before the CIT(A) but before its determination by the CIT(A). In this factual background, the CIT(A) has interpreted the condition prescribed in section 249(4) of the Act, regarding payment of tax due on the returned income prior to the filing of appeal, as a mandatory condition. Therefore, he held the appeal as un-admitted and dismissed the same inlimine. However, the Mumbai Bench of the Tribunal in the case of Bhumiraj Construction (supra) has in extenso considered the objective behind the insertion of section 249(4) of the Act, as it stood for the assessment year under consideration, and held that whereas the payment of tax due on the income returned is a mandatory condition but the requirement of paying such tax before filing of the appeal is essentially directory in nature. According to the Tribunal, where such defect in a....
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....uirement of law exposes the assessee to the penal provision, then it is mandatory, but if no penal consequences follow on nonfulfilment of the requirement, then usually it is a directory provision. The Hon'ble Karnataka High Court in ML. Srinivasa Shetty & Sons v. State 01 Karnataka [1992] 193 ITR 548 had the occasion to consider the distinction between a mandatory and directory provision. It held : 'In other words, one of the crucial tests to determine whether a particular statutory requirement is mandatory or directory is that the court has to see whether any penal consequences will follow by the noncompliance with a particular statutory requirement. If no penal consequences are indicated, then it would be safe to infer that the statutory requirement was directory and not obligatory or compulsory.' In reaching this conclusion the Hon'ble High Court relied on the judgment of the Hon'ble Apex Court in State of Uttar Pradesh v. Babu Ram Upadhya AIR 1961 AC 751. 7. It is trite law that omission to comply with a mandatory requirement renders the action void, whereas omission to do the directory requirement makes it only defective or irregular. On the removal of s....
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.... paid up to the filing of appeal before the CIT(A), the same shall not be admitted. In other words if the appeal is to be admitted by the first appellate authority, it is sine qua non that the assessee must have made the payment of tax on the income returned. If no payment of tax on the income returned is made at all and the appeal is filed, that cannot be admitted. If however the appeal is filed without the payment of such tax but subsequently the required amount of tax is paid, the appeal shall be admitted on payment of tax and taken up for hearing. Now the moot point for determination is that if the due tax is paid by the assessee after the filing of first appeal but before it is' taken up for consideration, it is admitted and taken up for disposal, then can the payment of due tax after the nonadmission of appeal by the authority can come to the rescue of the assessee and save the appeal from nonconsideration? In our considered opinion the answer to this question needs to be given in affirmative. 9. The objective behind section 249(4) is to ensure the payment of tax on income returned before the admission of appeal. If such payment after the filing of appeal but before it ....
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....ssessee filed one more appeal before the learned CIT(A) after making the payment of tax which was dismissed on the ground of delay and the order so passed was upheld by the Tribunal. When the matter came up before the Hon'ble High Court, it was held that the defect of compliance under section 249(4) was made up by the subsequent action of adjusting the tax and the case for the revival of appeal was made out. Although the fresh appeal filed was not held to be maintainable, the Hon'ble High Court held that the same could be treated as an application for revival of appeal earlier filed. From this judgment, relied on by the learned Departmental Representative, it can be seen that the contention of the assessee was accepted and the CIT (A) was directed to decide the appeal on merits in accordance with law, Here it is relevant to mention that this judgment has been rendered in relation to block period comprising of 199596 to 2892001 i.e., after 141989, being the date of amendment carried out in the proviso to section 249(4). So this judgment advances the case of the assessee instead of the Revenue. Insofar as the reliance of the rival parties on the divergent orders passed by the....