1979 (10) TMI 126 - AT - Income Tax

Summary

Issues:
- Admissibility of appeals by the assessee for asst. yrs. 1973-74, 1974-75, and 1975-76.
- Refusal by CIT (Appeals) to admit the appeals due to payment of taxes.
- Appealability of refusal to admit an appeal.
- Merits of the case and exemption from the operation of s. 249(4) of the IT Act.
- Position of tax due and payments made by the assessee.
- Arguments regarding good and sufficient cause for default in non-payment.
- Consideration of subsequent events in deciding exemption.
- Decision on the appeals by the ITAT.

Analysis:

The judgment addressed the admissibility of appeals by the assessee for the assessment years 1973-74, 1974-75, and 1975-76, which were initially not admitted by the CIT (Appeals) due to the assessee having paid the taxes due on the income returned at the time of filing the appeals. The departmental representative raised a preliminary objection regarding the appealability of the refusal to admit the appeals, contending that no appeal to the Tribunal is provided against such refusal. However, the ITAT disagreed, stating that a refusal to admit an appeal is an order under s. 250 of the IT Act, making it appealable to the Tribunal. The ITAT also referred to the principles of a Supreme Court judgment to support this interpretation.

On the merits of the case, the ITAT found that the CIT (Appeals) should have exempted the assessee from the operation of s. 249(4) of the Act, as the assessee had presented a case for exemption in the application before the Commr. (Appeals). The ITAT reviewed the tax amounts due and payments made by the assessee, noting that the Department had collected the tax due for the three assessment years by a certain date. The ITAT further analyzed the arguments regarding good and sufficient cause for default in non-payment, emphasizing that the proviso under s. 249(4) requires reasons for exemption rather than condonation of default.

Regarding subsequent events, the ITAT considered the payments made by the assessee after the appeal petitions were presented but before they were disposed of, through coercive proceedings under s. 226(3) of the IT Act. The ITAT concluded that the substantial payments made by the assessee, even before the appeal petitions were filed, constituted a good and sufficient reason for exemption from the operation of s. 249(4).

In the final decision, the ITAT allowed the three appeals of the assessee, canceling the order of the CIT (Appeals) refusing to admit the appeals for the three assessment years. The Commr. (Appeals) was directed to restore the appeals to his file and dispose of them on the merits of the case, based on the findings and reasoning provided by the ITAT.