DCIT, CHENNAI vs. M/S. RATHNA STORES (FIRM), CHENNAI

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ITA 2643/CHNY/2016Status: DisposedITAT Chennai16 November 2018AY 2010-114 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that while returns filed in response to Section 148 notices are valid, failure to pay tax on the returned income before filing an appeal before the CIT(A) leads to the non-admission of such appeals. Consequently, the CIT(A)'s orders were deemed erroneous.

What were the facts?

The assessee filed returns in response to Section 148 notices but did not pay the tax due on the returned income before filing appeals before the CIT(A). The Revenue's appeals were filed against the CIT(A)'s orders.

What were the issues?

Whether an appeal before the CIT(A) is maintainable when the assessee has not paid the tax due on the returned income, and whether returns filed beyond the period prescribed in a Section 148 notice are invalid.

Which sections of the Income-tax Act were involved?

Section 148,Section 249(4),Section 139(9)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN

For Appellant: Shri. R.K.V. Sundar, Advocate
For Respondent: Shri. AR V Sreenivasan, JCIT
Hearing: 16.11.2018Pronounced: 16.11.2018

आदेश / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER:

1.

In view of the decision of the Hon’ble Third Member, wherein, the Hon’ble Third Member has held as follows:

“11. Having carefully perused this clause 4 of section 249, I find that once the return is filed, the assessee is bound to pay the tax due on the returned income before filing the appeal before the CIT(A). If he does not pay the tax, appeal filed by it would not be admitted by the CIT(A). In the instant case, undisputedly, the assessee has filed the return of income though not within the period prescribed in the notice issued under section 148 of the Act and has not paid the tax on the returned income while filing an appeal before the CIT(A). Moreover, in section 249(4) there is no reference of valid or invalid return. It talks about the return filed by the assessee. As per provisions of section 139 of the Act, assessee is required to file the return of income before a particular date. Once the return is filed the AO has to take cognizance of the same and if any defects are there, he has to issue a defect memo to the assessee and if defects are not removed despite affording opportunity to the assessee, the AO may declare the return to be invalid return. Under these circumstances, I am of the view that ITA Nos.2576 to 2578/Mds/2016 to 2645/Mds/2016 CO Nos.190 to 195/Mds/2016 :- 3 -: section 249(4), talks about the filing of return. It does not talk about valid or invalid returns. Once the returns are filed, provisions of section 249(4) are to be applied and as per its clause, assessee is required to pay the taxes due on the returned income. If he fails to do so, the CIT(A) may not admit the appeal of the assessee. Though I am not supposed to give a finding in this regard as the question referred before me is only with regard to validity of return filed beyond the period prescribed in the notice issued under section 148 of the Act. In that regard, 1 am of the view that any return filed in response to notice issued under section 148 whether it may be in time or belated, it is a valid return unless and until the AO declare the same to be invalid return by passing a specific order under section 139(9) of the Act. In the instant case, since the AO has not passed any order under section 139(9) declaring the return filed by the assessee beyond the specified period to be invalid return, the return filed in response to section 148 is a valid return. Accordingly, I hold that the return filed in response to notice issued u/s 148 beyond the prescribed period is not an invalid return.”

2.

It is held that the returns filed by the assessee in response to the notices issued u/s. 148 are valid returns. The assessee has not paid the tax liability computed on the admitted income for all the assessments years under appeal and the same remains unpaid even as on date of the impugned appeals before the ld. CIT(A). The assessee does not possess inherent right of appeal before the ld. CIT(A) against the impugned assessment years, when the assessee has failed to remit the taxes due on the admitted income for all the assessment years under appeal.

ITA Nos.2576 to 2578/Mds/2016 to 2645/Mds/2016 CO Nos.190 to 195/Mds/2016 :- 4 -: Consequently, the impugned orders of the Ld. CIT(A) being erroneous, the same are held as nonest.

3.

In the result, the Revenue’s appeals in to 2645/Mds/2016 for the assessment years 2007-08 to 2012-13 are allowed. Consequently, the assessee’s appeals in ITA Nos. 2576 to 2578/Mds/2016 for assessment years 2010-11 to 2012-13 and cross objections in CO Nos. 190 to 195/Mds/2016 in ITA Nos. 2640 to 2645/Mds/2016 for the assessment years 2007-08 to 2012-13 are dismissed.

Order pronounced in the Open Court on 16th November, 2018, at Chennai.

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