2016 (6) TMI 1149 - AT - Income Tax

Right to prosecute the appeals - non-payment of tax on admitted income - Held that - Since identical issue was decided by the ITAT A Bench, Hyderabad in the case of one of the members of the group i.e., Mr. Ravella Ramakrishna, consistent with the view taken therein, I set aside the orders passed by the CIT(A) and direct the CIT(A) to verify as to whether the cash seized during the course of search/recovered thereafter is sufficient to meet the tax liability for the years under consideration and the CIT(A) is thereafter directed to entertain the appeals, subject to the assessees filing a condonation petition which shall be considered by the CIT(A) on merits. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Appeal against dismissal for non-payment of admitted tax; Adjustment of admitted tax against cash seized; Institution fees payment; Compliance with Section 249(4)(a) of the I.T. Act; Consideration of appeals on merits.

Analysis:
The appeals were filed against orders by the CIT(A)-I, Hyderabad dismissing them due to non-payment of admitted tax. The Ld. CIT(A) held that Section 249(4)(a) of the I.T. Act mandates tax payment for appeal prosecution. Assessees argued that admitted tax could be adjusted against seized cash, invoking Section 253(6)(d) for institution fees. They cited ITAT orders supporting their stance. The Ld. Counsel contended that if tax on returned income or seized amount is adjusted, appeal rights are preserved. The ITAT directed the CIT(A) to verify if seized cash covers tax liability, allowing appeal consideration with a condonation petition for delay, following precedent decisions.

In the case of Mr. Ravella Ramakrishna, the ITAT directed CIT(A) to verify if seized cash is sufficient to meet tax liability, allowing appeal consideration with a condonation petition for delay. The ITAT relied on previous decisions to support this approach, emphasizing the importance of adjusting seized cash against tax liability to enable appeal hearings on merits. Both the Ld. Counsel for the assessee and the Ld. D.R. highlighted that the seized amounts should be adjusted against self-assessment tax, which the CIT(A) overlooked. The ITAT, considering the consistent view taken in similar cases, set aside the CIT(A) orders and instructed verification of seized cash sufficiency to meet tax liability, allowing appeal consideration with a condonation petition for delay.

The ITAT's decision allowed the appeals for statistical purposes, emphasizing the importance of verifying if seized cash covers tax liability to enable appeal consideration on merits. The ITAT's approach aimed to ensure compliance with Section 249(4)(a) of the I.T. Act while providing assessees with the opportunity to have their appeals heard and decided based on merit. The ITAT's reliance on previous decisions and the consistent application of adjusting seized cash against tax liability demonstrated a fair and reasoned approach to resolving the issue of non-payment of admitted tax for appeal prosecution.