2001 (10) TMI 253 - AT - Income Tax

Summary

Issues Involved:
1. Application of provisions of section 249(4) of the Income-tax Act.
2. Maintainability of the appeal filed by the assessee before the CIT(A).
3. Interpretation of section 249(4)(a) and relevant case laws.

Summary:

1. Application of provisions of section 249(4) of the Income-tax Act:
The main issue for consideration was the application of section 249(4) of the Income-tax Act. The assessee, a sharebroker, did not pay the tax on the undisclosed income of Rs.10 lakhs declared for the block period 1-4-1987 to 8-12-1997. The Assessing Officer determined the undisclosed income at Rs.33,57,283. The CIT(A) dismissed the appeal filed by the assessee on the grounds that the appeal was not maintainable under section 249(4) as the tax on the returned income was not paid before filing the appeal.

2. Maintainability of the appeal filed by the assessee before the CIT(A):
The CIT(A) observed that the appeal was filed without paying the required self-assessment tax and interest. The assessee argued that Rs.1.8 lakhs seized during the search should be considered as payment towards the tax. Additionally, the assessee claimed that due to a mistake by the accountant, Rs.4 lakhs was paid as advance tax for the assessment year 2000-01 instead of the block assessment. The remaining amount was paid 7 days after filing the appeal. The CIT(A) held that the appeal was not maintainable under section 249(4) as the tax was not paid before filing the appeal.

3. Interpretation of section 249(4)(a) and relevant case laws:
The assessee's counsel referred to various case laws including CIT v. Filmistan Ltd., Kamdar Bros. of Jharia v. CIT, and others to argue that the appeal should be considered valid if the tax was paid before the date of hearing. However, the Tribunal noted that section 249(4)(a) of the Income-tax Act, 1961, as amended, does not provide discretion to the CIT(A) to admit an appeal if the tax on the returned income is not paid before filing the appeal. The Tribunal upheld the CIT(A)'s decision, emphasizing that the provisions of section 249(4)(a) are mandatory and must be strictly construed, requiring the tax to be paid before filing the appeal.

Conclusion:
The Tribunal dismissed the appeal, affirming that the appeal was not maintainable under section 249(4)(a) as the assessee did not pay the tax on the returned income before filing the appeal. The Tribunal emphasized the mandatory nature of section 249(4)(a) and the legislative intent to enforce tax compliance.