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Facts
The assessee, proprietor of M/s. Aathika Infrastructure, filed a return of income for AY 2012-13, which was revised, and the AO assessed the income under Section 143(3). The assessee's appeal before the CIT(A) was not admitted because the assessee failed to pay the tax due on the returned income as required by Section 249(4) of the Income Tax Act, and also failed to pay at least 25% of the disputed tax as directed by the Hon'ble Madras High Court.
Held
The ITAT upheld the decision of the CIT(A) to dismiss the appeal as non-admissible. It found no infirmity in the CIT(A)'s action, as the assessee failed to comply with the mandatory pre-condition of Section 249(4) (payment of tax on returned income) and did not adhere to the High Court's order for payment of 25% of the disputed tax, despite multiple opportunities.
Key Issues
Whether the CIT(A) was justified in not admitting the assessee's appeal due to non-payment of tax on returned income as per Section 249(4) and non-compliance with the Madras High Court's directive regarding payment of disputed tax.
Sections Cited
143(3), 249(4), 234A, 234B, 234C, 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-2, (hereinafter referred to as “the Ld.CIT(A)”), Coimbatore, dated 27.02.2017 for the Assessment Year (hereinafter referred to as "AY”) 2012-13.
At the outset, the Ld. Counsel for the assessee submitted that there was a delay of ‘2’ days in filing of this appeal. Since assessee was prevented by sufficient cause, the Ld. Counsel for the assessee prayed for condonation of delay, for which, the Ld.DR didn’t raise any objection and hence, we condone the delay of ‘2’ days and proceed to adjudicate the appeal on merits.
The main grievance of the assessee is against the action of the Ld.CIT(A) not admitting the appeal of the assessee since the assessee didn’t pay the tax.
The brief facts relating to this issue are that the assessee is a proprietor of M/s.Aathika Infrastructure engaged in the real estate business and had filed her return of income (RoI) for AY 2012-13 on 27.12.2012 admitting total income at Rs.4,10,64,317/-. Later on, 31.03.2014, the assessee filed revised return showing income of Rs.3,31,13,340/-. The return was selected for scrutiny and the AO passed order u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) on 30.03.2015 for AY 2012-13 assessing the income at Rs.4,05,40,660/- as under:
The total income is computed as under -- Rs. Income as per the original return 4,09,95,231/- Less: Value increase in the opening 'stock Rs. 19,64,034/- Rs. Add: Additions as discussed above 15,09,758/- Assessed Income Rs. 4,05,40,660/-
Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who noted that assessee didn’t remit the tax on the income returned before filing of the appeal before him. Therefore, as per sec.249(4) of the Act, he refused admission of the appeal by holding as under:
4.0 I have considered the grounds raised in this appeal. All these grounds relate to AO's rejection of appellant's claim to adoption of revised closing stock as worked out and submitted during the assessment proceedings and denial of deduction u/s.80G. Before going into the merits, it is important to mention that the appellant did not mention anything in Form No.35 with regard to whether tax due on the income returned has been paid in full and did not furnish details of date of payment of tax and the amounts paid. At item No.10 of Form No.35, the appellant left the details blank. As mentioned above, the appellant was specifically asked to furnish the details of payment of self assessment tax on the returned income but has failed to furnish those particulars. It is evident from the Writ petition copy forwarded to this office that the appellant had paid only Rs.24,00,000/- as against total demand of Rs. 1,23,74,624/- (excluding interest u/s.234A, 234B & 234C). From the above, it is clear that the appellant did not pay the tax due on the returned income. Even for a moment, the appellant's claim for reduction of income by revising closing stock to a lower figure of Rs.9,12,82,850/- as against Rs.11,59,57,906/- is accepted, the appellant would still be falling short of payment of tax due on accepted income. It is not known whether the appellant at least followed the directions of the Hon'ble Court and paid 25% of the disputed tax for this year. As per provisions of Sec.249(4), where a return has been filed by the assessee, no appeal shall be admitted unless at the time of filing the appeal, the assessee had paid the tax due on the income returned by him. In the appellant's case herein, as mentioned above, tax has not been paid on the income returned before filing this appeal. So, on this ground alone, the appeal deserves to be dismissed. Notwithstanding that, the appellant had not shown any basis for revising the closing stock as claimed by her which has the effect of reducing the total income. The W appellant has not demonstrated as to how different methods of valuation for valuing opening and closing stock have been adopted by the AO. No reasonable cause for not claiming deduction u/s.80G in the original return as well as revised return was shown. From the appellant's non-compliance, it is understood that there is nothing more to state other than the grounds taken in this appeal. Considering the above circumstances in totality, I do not find any reason to interfere with the AO's assessment order and dismiss the grounds and appeal as such.
Aggrieved by the aforesaid action of the Ld.CIT(A), the assessee is before us.
We have heard both the parties and perused the material available on record. We note that the assessee being aggrieved by the assessment order passed by the AO u/s.143(3) of the Act on 30.03.2015 had preferred an appeal before the Ld.CIT(A), Coimbatore-2, which was not admitted, since the Ld.CIT(A) noted that the assessee failed to furnish the details of payment of tax on self-assessed income in Form-35. In this regard, the Ld.CIT(A) noted that the assessee had also filed a Writ- Petition before the Hon’ble Madras High Court wherein the assessee had admitted of paying only Rs.24 lakhs as against the total demand of Rs.1,23,74,624/- [excluding interest u/s.234A, 234B & 234C]. Thus, according to the Ld.CIT(A), the assessee didn’t pay the tax due on the returned income. Moreover, the Ld.CIT(A) noted that even the assessee didn’t pay at least 25% of the disputed tax as ordered by the Hon’ble Madras High Court in the Writ Petition filed (supra) by her. Therefore, according to the Ld.CIT(A), since the assessee failed to make payment of tax due to income returned by her (self assessed tax), as per sub-section 4 of section 249 of the Act, he couldn’t admit the appeal preferred by the assessee. In this regard, we are constrained to observe that despite giving number of opportunities to the assessee to comply with the order of the Hon’ble Madras High Court or as required by the law as envisaged in sub-section 4 of section 249 of the Act, still the assessee didn’t comply, therefore, there is no other alternative but to confirm the impugned action of the Ld.CIT(A) because we don’t find any infirmity in the action of
In the result, appeal filed by the assessee is dismissed.
Order pronounced on the 04th day of April, 2025, in Chennai.