2012 (3) TMI 128 - AT - Income Tax

Maintainability of Appeals - Taxes due on returned income were not paid - Held That - Taxes due were actually paid by the assessee before the hearing of the appeals by the Commissioner of Income-tax (Appeals) and that, therefore, the same be considered as sufficient compliance with the provisions of section 249(4) of the Act.

Summary

Issues:
- Maintainability of appeals under section 249(4) of the Act due to non-payment of taxes on returned income.

Analysis:
1. The judgment involves seven appeals by members of the same family, consolidated due to a common issue. Six appeals (ITA Nos 1239 to 1244/PN/2010) were dismissed by the Commissioner of Income-tax (Appeals) for non-maintainability under section 249(4) of the Act, citing unpaid taxes on the returned income at the time of filing.

2. The assessee contended that all taxes due were paid before the appeals' hearing, citing a similar case precedent where the Tribunal allowed the appeal after subsequent tax payment. The Departmental Representative did not contest this factual matrix.

3. The Tribunal, referring to the precedent, noted that the objective of section 249(4) is to ensure tax payment before appeal admission. It held that payment before appeal hearing validates the appeal, considering the requirement of paying tax before filing as directory, not mandatory.

4. The Tribunal set aside the Commissioner's orders, allowing the appeals based on the assessee's tax payment before the appeal hearing, following the precedent's reasoning and distinguishing the judgment of the Hon'ble Madras High Court in another case.

5. The Tribunal restored the appeals back to the Commissioner for fresh adjudication on merits, in line with the precedent's principles, thereby treating all six appeals as allowed.

6. In the case of ITA No 1245/PN/10, the Commissioner treated the appeal as non-maintainable under section 249(4) due to unpaid taxes on the total returned income. Following the precedent, the Tribunal set aside the Commissioner's order and restored the appeal for fresh adjudication.

7. The Tribunal allowed the appeal in ITA No 1245/PN/10, similar to the other appeals, based on the assessee's compliance with tax payment before the appeal hearing, in line with the established precedent.

8. The judgment emphasizes the importance of timely tax payment before appeal hearing to maintain appeal validity, following a precedent that considers such payment as sufficient compliance with statutory requirements.