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TMI Blog2022 (10) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the provisions of clause (b), despite there being a categorical claim of the assessee that the failure on its part to deposit the tax had occasioned on account of financial difficulties. We are unable to persuade ourselves to subscribe to the dismissal of the assessee's appeal in limine by the Commissioner of Income-tax (Appeals), who in our considered view had misconceived ; or in fact had misconstrued the scope and gamut of the provisions of section 249(4)(b) of the Act as were applicable to the case of the assessee before us. We, thus, in terms of our aforesaid observations, set aside the impugned order of the Commissioner of Income-tax (Appeals) and restore the matter to his file with a direction to reconsider the maintainability of the appeal on the basis of reasons given by the assessee as regards the failure on its part to pay the amount of tax as contemplated in clause (b) of section 249(4) of the Act. - I. T. (SS) A. Nos. 44 and 29/Raipur/2018 - - - Dated:- 27-5-2022 - Ravish Sood (Judicial Member) And Rathod Kamlesh Jayantbhai (Accountant Member) For the Assessee : Nikhilesh Begani , authorised representative For the Department : P. K. Mishra , C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case as well as in law, the learned Commissioner of Income-tax (Appeals) has grossly erred in dismissing the appeal in limine without considering the grounds raised by the appellant on the merits which is highly unjustified, unwarranted, unsustainable and not in accordance with the provisions of law. Ground No. IV That the appellant craves leave to add, amend, alter or delete all or any of the grounds of appeal at the time of hearing of the appeal. 2. Search and seizure proceedings under section 132 of the Act were conducted at the business and factory premises of Crest Topworth Group on October 10, 2012. The assessee-company was covered in the aforesaid search and seizure proceedings. As the assessee-company had failed to file its return of income for the year under consideration, i. e., assessment year 2012-13 either under section 139(1) or under section 153A of the Act, therefore, the Assessing Officer vide his order passed under section 153A read with section 144, dated November 10, 2016 after considering its audited financial statements assessed its income at Rs. 112,53,62,130. 3. Aggrieved, the assessee carried the matter in appeal before the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive that as the Commissioner of Income-tax (Appeals) had failed to exercise the discretion vested with him which he was obligated to exercise as per the proviso to section 249(4) of the Act, therefore, the matter in all fairness be restored to his file with a direction to reconsider the maintainability of the assessee's appeal dehors deposit of an amount equal to the amount of advance taxes, i. e., in the backdrop of the reasons raised by the assessee before him. 6. Per contra, the learned Departmental representative (for short, DR ) relied on the orders of the lower authorities. It was submitted by the learned Departmental representative that as the assessee-company which had not filed its return of income had failed to pay an amount equal to the amount of advance tax at the time of filing of the appeal, therefore, the Commissioner of Income-tax (Appeals) observing that the assessee-company had not complied with the mandate of section 249(4) of the Act, rightly dismissed its appeal in limine. It was submitted by the learned Departmental representative that even otherwise as the assessee-company has a substantial net worth, therefore, its claim of having failed to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid statutory requirement by way of a proviso to section 249(4) of the Act, as per which on an application filed by the assessee before the Commissioner of Income-tax (Appeals), the latter may for good and sufficient reasons to be recorded in writing exempt him from the obligation of payment of taxes as therein contemplated. At this stage, we may herein observe, that the exemption envisaged in the proviso to section 249(4) of the Act can only be made available to an assessee whose case falls within the realm of clause (b) and cannot be applied to a case covered by clause (a) of section 249(4) of the Act. 8. In the backdrop of the aforesaid position of law, we shall now deal with the sustainability of the order of the Commissioner of Income-tax (Appeals) who had declined the admission of the appeal of the assessee, for the reason that it had not paid the taxes which is a pre-condition for maintainability of an appeal as per section 249(4) of the Act. At this stage, we may herein observe, that admittedly as the assessee-company had not filed its return of income either under section 139 or under section 153A of the Act, therefore, its case would fall within the scop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sake of clarity, the relevant observations of the hon'ble High Court are culled out as under (page 417) : 9. In our opinion, the compliance of section 249(4) is mandatory before the appeal is entertained. Indeed, the jurisdiction of Commissioner of Income-tax (Appeals) in hearing and then deciding the appeal depends upon the strict compliance of requirements contained in section 249(4) ibid. If the appellant fails to deposit the tax strictly in accordance with the requirement of clause (a) or (b) as the case may be, the appeal has to be dismissed as not maintainable. If the appellant makes an application as contemplated under proviso to sub- section (4) then it is the duty of the Commissioner of Income-tax (Appeals) to pass an appropriate order on the application so made by either granting an exemption from payment of tax or refuse the prayer. Depending upon the outcome of the application, the Commissioner of Income-tax (Appeals) has to proceed. In other words, if the application is rejected, then the appellant has to deposit the tax strictly in accordance with the requirement of clause (a) or (b) as the case may be, to enable the Commissioner of Income-tax (Appeals) to ..... 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