TaxTMI 
TaxTMI 
2022 (10) TMI 476
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.... take up the appeal filed by the assessee for the assessment year 2012-13 wherein the assessee has assailed the impugned order on the following grounds of appeal before us : "Ground No. I That the appellate order passed by the learned Commissioner of Income-tax (Appeals)-II, Raipur (hereinafter referred to as, "the Ld. CIT(A)") is highly illegal, bad in law, unsustainable and not in accordance with the provisions of law. It is prayed that the order passed may please be annulled. Ground No. II 2.1 On the facts and in the circumstances of the case as well as in law, the learned Commissioner of Income-tax (Appeals) has erred in dismissing the appeal in limine holding it as not maintainable under the provisions of section 249(4) of the Act which is highly unjustified, unwarranted, unsustainable, not proper on facts and not in accordance with the provisions of law. 2.2 The learned Commissioner of Income-tax (Appeals) has failed to appreciate that the appellant could not file the return of income and could not pay the taxes due on such income owing to severe financial crisis and hence, there were good and sufficient reasons for such contravention hence, the learned Commissioner....
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.... Commissioner of Income-tax (Appeals) has carried the matter in appeal before us. 5. Before us, it was submitted by the learned authorised representative (for short, "AR") for the assessee, that the assessee-company had though neither filed its return of income for the year under consideration nor owing to financial difficulties paid an amount equal to the amount of advance tax which it was obligated to pay at the time of filing of the appeal, i. e, a pre-condition contemplated in clause (b) of section 249(4) of the Act for the maintainability of the appeal, however, the Commissioner of Income-tax (Appeals) who as per the "proviso" to section 249(4) was vested with a discretion to exempt him from the payment of tax for any good and sufficient reason to be recorded in writing had refrained from exercising the said discretion. In sum and substance, it was claimed by the learned authorised representative that now when the assessee-company had not filed its return of income, therefore, its case was covered by clause (b) to section 249(4) of the Act which, therein, vested with the Commissioner of Income-tax (Appeals) a discretion, as per which he could on the basis of a claim raised by....
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.... the appeal of the assessee had rightly been dismissed by the Commissioner of Income-tax (Appeals) as not maintainable under section 249(4) of the Act ? Before proceeding any further, we deem it fit to cull out section 249(4) of the Act which reads as under : "(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,- (a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him ; or (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him." On a perusal of the aforesaid statutory provision, we find that the same contemplates the pre-conditions for admission of an appeal filed before the Commissioner of Income-tax (Appeals) in two different circumstances, viz., (a) in a case where return has been filed by the assessee ; and (b) in a case where no return has been filed by the assessee. In so far a case where a return of income had been filed by the assessee is concerned, the taxes on the returned income is mandatorily required to have been paid by the assessee at the time of filing of the appeal befor....
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....sed its appeal in limine, for the reason that it had not filed its return of income and paid taxes. In our considered view, as stated by the learned authorised representative, and rightly so, the Commissioner of Income-tax (Appeals) in the present case had failed to exercise the judicial discretion that was vested with him for exempting the assessee from the operation of the provisions of clause (b), despite there being a categorical claim of the assessee that the failure on its part to deposit the tax had occasioned on account of financial difficulties. Our aforesaid conviction that the Commissioner of Income-tax (Appeals) was under an obligation to have exercised his discretion within the meaning of the "proviso" to section 249(4) of the Act is fortified by the judgment of the hon'ble High Court of Madhya Pradesh in the case of Shyam Electric Works v. CIT [2006] 284 ITR 413 (MP). In the aforesaid case the Tribunal had allowed the appeal of the Revenue, for the reason, that as the assessee had failed to pay the taxes as contemplated under section 249(4) of the Act, therefore, its appeal was not maintainable before the Commissioner of Income-tax (Appeals). On appeal, the hon....
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....eal along with the aforesaid position of law, we are unable to persuade ourselves to subscribe to the dismissal of the assessee's appeal in limine by the Commissioner of Income-tax (Appeals), who in our considered view had misconceived ; or in fact had misconstrued the scope and gamut of the provisions of section 249(4)(b) of the Act as were applicable to the case of the assessee before us. We, thus, in terms of our aforesaid observations, set aside the impugned order of the Commissioner of Income-tax (Appeals) and restore the matter to his file with a direction to reconsider the maintainability of the appeal on the basis of reasons given by the assessee as regards the failure on its part to pay the amount of tax as contemplated in clause (b) of section 249(4) of the Act. Accordingly, the grounds of appeal No(s). (i) to (iii) raised by the assessee are allowed for statistical purposes in terms of our aforesaid observations. 10. Ground of appeal No. (iv) being general in nature is dismissed as not pressed. 11. In the result, the appeal of the assessee in I. T. A. No. 44/Raipur/2018 for the assessment year 2012-13 is allowed for statistical purposes in terms of our aforesaid ob....