2017 (2) TMI 859 - HC - Income Tax

Non-payment of the admitted tax liability - belated payment - Held that - In view of the admitted tax liability paid by the assessee later on, the dismissal of the appeal on the ground of non-payment of the admitted tax liability at the point of time of filing of the said appeal was not justified and the appeals were thus restored on the file of learned CIT(A) for considering the said appeals on merits. We do not find any substantial question of law arising in the present appeal of the Revenue and therefore, the impugned order of the learned Tribunal deserves to be upheld.

Summary

Issues:
1. Appeal filed by Revenue under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.
2. Dismissal of the appeal by the Commissioner of Income Tax (Appeals) due to non-payment of admitted tax liability by the assessee.
3. Interpretation of Section 249(4)(a) of the Income Tax Act regarding the payment of tax due on the income returned by the assessee.
4. Application of the Division Bench decision of the Karnataka High Court in a similar case.

Analysis:
1. The Revenue filed appeals under Section 260A of the Income Tax Act challenging the order of the Income Tax Appellate Tribunal, Panaji Bench, which relied on a previous decision of the Karnataka High Court regarding the payment of admitted tax liability by the assessee. The Tribunal held that the appeal should be decided on merits despite the belated payment of tax by the assessee.

2. The Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee for A.Y. 2005-06 to 2011-12 due to non-payment of the admitted tax liability at the time of filing the appeal. However, the assessee later paid the tax, leading to a reconsideration of the dismissal order by the Tribunal.

3. Section 249(4)(a) of the Income Tax Act states that an appeal cannot be admitted unless the assessee has paid the tax due on the income returned. The Tribunal, following the decision of the Karnataka High Court, ruled that if the assessee pays the admitted tax after the dismissal of the appeal, the Commissioner (Appeals) should reconsider the appeal on merits.

4. The Division Bench of the Karnataka High Court, in a similar case, emphasized that the right of appeal is subject to conditions imposed by the statute, including the payment of admitted tax liability. The Court held that if the tax is paid later, the Appellate Authority should entertain the appeal on merits. The Tribunal's decision to restore the appeals for consideration on merits was upheld by the High Court.

In conclusion, the High Court dismissed the appeals of the Revenue, upholding the Tribunal's decision to reconsider the appeals on merits following the payment of admitted tax liability by the assessee. The judgment reaffirmed the importance of complying with statutory requirements for the admission of appeals under the Income Tax Act.