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TMI Blog2010 (4) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... n-compliance of a directory requirement of paying such tax before the filing of the appeal, stood removed - Appeal is allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... t reason to be recorded in writing, exempt him from the operation of the provisions of that clause." 5. On going through the prescription of proviso to sub-section (4) it transpires that the CIT(A) has been empowered to grant exemption from the payment of tax equal to the amount of advance tax which was payable by the assessee in a situation where no return is filed by the assessee. It implies that where the assessee did not file any return for the relevant year and still the assessment was made, the assessee can file first appeal even without the payment of tax provided he satisfies the CIT(A) for the reasons of non-payment of tax. The power of the first appellate authority as per the directive of proviso is not to accept the delayed payment of such tax, but to exempt the payment of tax altogether. The operation of proviso is restricted only to clause (b) and is not applicable to clause (a) which deals with a situation in which return was filed by the assessee. Thus in such a situation where the return was originally filed by the assessee, the CIT(A) has no power to grant exemption from the making of payment of tax due on the income returned. The requirement of payment of tax in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a fresh decision in the light of such report. It, therefore, transpires that non-compliance of directory requirement does not make the action as invalid. As soon as such requirement is fulfilled, the deficiency stands removed and the action is validated. It can also be seen from the mandate of section 139(9), dealing with the defective return, which provides that on the removal of defect, the return becomes valid. In the like manner if the appeal filed by the assessee is only defective, it assumes validity on the removal of such defect or irregularity. 8. In the present case, the ld. CIT(A) granted a time of ten days to the assessee for depositing the tax due. It was only on the failure of the assessee to do so that the appeal was dismissed as unadmitted. If the assessee had made good the deficiency within the period often days, then the appeal would have been admitted and taken for disposal on merits. It shows that the appeal filed without paying tax due on returned income is only defective but not void. Thus if tax is paid on the income returned, either before or at the time of or after the filing of return, it will be sufficient compliance with the provisions of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e required by the ld. CIT(A). It was claimed that on making the payment of tax, the appeal ought to have been admitted by the ld. CIT(A). He relied on the order passed by the Mumbai Bench of the Tribunal in the case of Anant R. Thakore v. Asstt. CIT [2006] 5 SOT 298 in which it has been held that the CIT(A) was not justified in dismissing the appeal under section 249(4)(a) where the assessee's application for downward rectification of self-assessment tax was still pending. Per contra the learned Departmental Representative relied on another order passed by the Mumbai Bench of the Tribunal in the case of Bharatkumar Sekhsaria v. Dy. CIT [2002] 82 ITD 512 in which the action of the CIT(A) in not admitting the appeal was held to be justified. He further relied on the judgment of the Karnataka High Court in the case of D. Komalakshi v. Dy. CIT [2007] 162 Taxman 16. 11. In the case of D. Komalakshi (supra), the assessee AOP had three members who had filed returns individually. The assessments were finalized after making some adjustments. After the assessment in the individual capacity, the AOP was also assessed to tax on the same income. However tax paid in individual capacity was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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