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Facts
A search and seizure action was carried out, leading to the issuance of a notice under section 153C. The assessee filed a revised return of income. During the assessment proceedings, Rs. 1 crore was identified as income from development work which was not declared by the assessee.
Held
The assessee filed an appeal before the CIT(A) against the order passed by the AO. The CIT(A) dismissed the appeal on the grounds that the appellant had not paid the tax due on the returned income, which is mandatory as per Section 249(4) of the Act.
Key Issues
Whether the appeal filed by the assessee is maintainable when the admitted due tax has not been paid by the assessee as per Section 249(4) of the Act.
Sections Cited
139, 153A, 153C, 234B, 234C, 249(4), Chapter XX
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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI LAXMI PRASAD SAHU
O R D E R PER BENCH : This is an appeal filed by the assessee against the order passed by the CIT(A), Bangalore dated 01/08/2023 in DIN No. ITBA/NFAC/S/250/2023-24/1054764138(1) for the assessment year 2017-18.
The brief facts of the case are that the assessee filed return of income on 29/03/2018 u/s 139 of the Act declaring taxable income of Rs.3,09,13,660/-. A search and seizure action was carried out on 11/02/2018. During the course of assessment proceedings u/s 153A of the Act in the case of K Somashekar Reddy, on examining the documents sized from the residence of Shri K Somashekar Reddy and Shri K Satish Kumar, the AO was satisfied in terms of sec. 153C of the Act that certain documents related to Shri Satish Kumar and accordingly, the notice u/s 153C was issued to the assessee on 22/02/2019 after recording satisfaction note. In response to the notice, the assessee filed return of income on 19/03/2019 declaring total income of Rs.3,12,21,160/-. Subsequently, the other statutory notices were issued to the assessee. It was noticed that during the search proceedings, the amount of Rs.1 crore received by the assessee from development work in the land situated at Harlur and he observed that the assessee would not have declared this income if the search proceedings was not conducted with respect to the assessee’s case. Accordingly, the return of income filed by the assessee was accepted and total tax payable was determined at Rs.1,44,38,140/- after adjustment of TDS of Rs. 1,10,514/- and assessment was completed.
The assessee filed appeal before the CIT(A) challenging the order passed by the AO. At the outset, the ld.CIT(A) noted that as per the return of income filed by the assessee, there was tax liability at Rs.1,08,81,229/- excluding the interest u/s 234B and 234C of the Act and the TDS amount claimed by the assessee is at Rs.1,10,514/- and it was also noted that the assessee has not paid the tax due on the returned income upto the date of deciding the appeal by the assessee which is mandatory as per section 249(4) of the Act.. Accordingly the CIT(A) dismissed the appeal that the appeal is not maintainable and observed as under:-
“3.1 Perusal of the above shows that the appeal cannot be admitted unless the appellant has paid the tax due on the income returned by him. Nothing has been brought on record by the appellant to show that the taxes due had been paid by him before filing this appeal. The issue is covered by the decision of jurisdictional High Court in the cases of D Komalakshi V DCI 292 ITR 99 (Kar) and Smt. M R Prabhavathy V ACIT 26 IT 501. This was also observed so by the Hon'ble Supreme Court in the case of CIT v Pawan Kumar Laddha 324 IT 324 that the compliance of the provisions o section 249(4)(a) is mandatory. 3.2 Considering the above, the appeal is not admitted and as such the same is not maintainable. The grounds of appeal are thus not being adjudicated on merits.”
During the course of hearing before us, the ld.AR fairly admitted that till the date of hearing, the assessee has not paid the admitted due tax.
The ld.DR relied on the order of the lower authorities. The ld. DR has also filed copy of satisfaction note recorded by the AO for initiation of proceedings u/s 153C of the Act.
Considering the rival submissions, as per section 249(4) unless and until, assessee has paid income tax due on income returned by him, no appeal under Chapter XX will be admitted and statute does not give any discretion to appellate authority to entertain an appeal or to extend time for paying self assessment tax, except in respect of cases falling under section 249(4)(b) in terms of proviso under said section. The CIT(A) has dismissed the appeal as noted above and as per the acceptance of the ld.AR till the date of hearing before us, the assessee has not paid admitted due tax, therefore, we concur with the view taken by the ld.CIT(A). We do not find any infirmity in the order of the CIT(A). Accordingly, we dismiss the appeal of the assessee.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court through virtual hearing on this 28th day of February, 2024.