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2024 (8) TMI 1030 - HC - Income TaxAdmission of appeal of the assessee in contravention of Section 249(4)(a) - non-payment of due tax - HELD THAT - As in terms of Section 249(4)(a) of the Act, does not provide that appeal may be entertained after depositing the admitted tax. In other words, it is submitted by the appellant/revenue in the appeal that appeal could not be entertained in terms of Section 249(4)(a) of the Act, if the admitted tax was deposited after filing of an appeal. From perusal of the order of ITAT, it is clear that the order has not been passed on merits and it has interpreted Section 249(4)(a) of the Act which deals with the issue of entertaining an appeal in the case where amount is deposited, though it may be prior to filing an appeal or after appeal. Since there is no merit in the appeal, the ITAT has remanded the matter back to the CIT (A) for adjudication on merits based on the law laid down in the case of Vijay Prakash D. Mehta 1988 (8) TMI 109 - SUPREME COURT and CIT Vs. K Satish Kumar Singh 2012 (4) TMI 213 - KARNATAKA HIGH COURT and, therefore, the same cannot be said to be erroneous and prejudicial to the interest of revenue.
Issues:
Admission of appeal under Section 260A of the Income Tax Act, 1961 based on non-payment of due tax, interpretation of Section 249(4)(a) of the Act, substantial questions of law regarding payment of tax on income returned, and the jurisdiction of the ITAT in allowing appeals. Analysis: The judgment by the High Court of Madhya Pradesh involves an appeal under Section 260A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal (ITAT) regarding the admission of the appeal by the assessee. The primary issue revolves around the interpretation of Section 249(4)(a) of the Act, which requires the payment of due tax on the income returned by the assessee for the admission of an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The substantial questions of law raised in the appeal question the justification of the ITAT in allowing the appeal despite non-compliance with the payment of due tax, as mandated by the Act. The respondent, engaged in toll road construction, faced a search and seizure action under Section 132 of the Act, leading to the disclosure of additional income. The Assessing Officer completed scrutiny assessments, determining the total income for the assessment year 2010-11. The respondent filed an appeal before the CIT(A), which was dismissed due to non-payment of due tax. Subsequently, the ITAT allowed the appeal, emphasizing that non-payment of tax on return income is a defect, not rendering the appeal void. The ITAT remanded certain appeals for further adjudication by the CIT(A). The appellant contended that the ITAT erred in allowing the appeal based on previous judgments and interpretations of the law. The High Court analyzed the ITAT's order and concluded that it correctly interpreted Section 249(4)(a) by allowing appeals if the tax due on the income returned is paid, irrespective of the timing of payment. The Court referenced relevant case law to support the decision and found no error prejudicial to the interest of revenue. Ultimately, the High Court held that no substantial question of law arose from the ITAT's order, leading to the dismissal of the appeal in limine. The judgment underscores the importance of complying with tax payment requirements for the admission of appeals under the Income Tax Act, while also highlighting the judicial interpretation of statutory provisions in tax matters. This comprehensive analysis of the judgment showcases the intricate legal issues surrounding the admission of appeals in tax matters and the significance of adhering to statutory provisions for due process in tax assessments and appeals.
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