2015 (6) TMI 308 - HC - Income Tax

Non-compliance of Section 246 (4) - Held that - There was a financial constraint faced by respondent assessee. Therefore, he took time to arrange for money but the said amount was duly paid before the appeal was dismissed by the first appellate authority. It has been held that the appeal should have been treated as validly filed on the date when the tax amount was paid. After examining the factual matrix, Tribunal condoned the delay and directed CIT (Appeals) to hear the appeal on merits as it was admitted that the tax amount has been paid. See J.K.Chaturvedi V. ACIT 2003 (9) TMI 286 - ITAT AHMEDABAD - Decided against revenue.

Summary

Issues:
1. Delay in filing the appeal and condonation of delay.
2. Validity of the appeal based on tax payment timing.
3. Tribunal's decision to allow the appeal and challenge the additions made by the assessing officer.
4. Reliance on a previous case by the Tribunal.

Analysis:
1. The appeal in question was delayed by 57 days. The court decided to first examine the merits of the challenge to the order passed by the Income Tax Appellate Tribunal dated 31.8.2012 before considering the application for condonation of delay.

2. The case involved the assessment year 2009-10 of the respondent, who had undergone a search and seizure operation. The respondent filed the income tax return on 3.9.2010, declaring an income of Rs. 939,00,720/-. The assessment order was passed on 29.12.2010, determining the total income at Rs. 20,88,99,730/-. The respondent failed to pay the tax on the declared income initially but later deposited the amount during the pendency of the first appeal.

3. The Commissioner of Income Tax (Appeals) dismissed the appeal citing non-compliance with Section 246(4) of the Act due to the tax payment being made after the appeal was filed. However, the Tribunal found that the delay in filing the appeal was due to financial constraints faced by the respondent, and since the tax amount was paid before the appeal was dismissed, the appeal was considered valid. The Tribunal directed the CIT (Appeals) to hear the appeal on merits, allowing the respondent to challenge the additions made by the assessing officer.

4. The Tribunal relied on a previous decision in the case of J.K. Chaturvedi v. ACIT, where a similar view was taken regarding the timing of tax payment and the validity of the appeal. The court noted that there was no reason to interfere with the Tribunal's decision and dismissed the appeal.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing the importance of considering the factual circumstances, condoning delay in appropriate cases, and allowing taxpayers to challenge assessments on their merits. The judgment highlighted the significance of timely tax payments in relation to the filing and validity of appeals in income tax cases.