Delhi High Court
Commissioner Of Income-Tax vs Rama Body Builders on 8 January, 2001
Equivalent citations: (2001)168CTR(DEL)319, [2001]250ITR825(DELHI)
Author: Arijit Pasayat
Bench: Arijit Pasayat, D.K. Jain
JUDGMENT Arijit Pasayat, C.J.
1. At the instance of the Revenue, the following question has been referred for the opinion of this court, by the Income-tax Appellate Tribunal, Delhi Bench-D ("the Tribunal" in short), under Section 256(1) of the Income-tax Act, 1961 (in short "the Act") :
"Whether the Tribunal is correct in law in holding that, after the payment on March 8, 1977, the requirement of Section 249(4) should be taken as having been fulfillled ?"
2. As the controversy lies in a narrow compass, the factual position needs to be noted in brief :
For the assessment year 1973-74, the assessed filed its return of income disclosing Rs. 25,900 as taxable income. On the said amount the tax payable worked out to Rs. 7,307. The assessed had paid advance tax of Rs. 4,395. The assessment was completed by determining the total income at Rs. 1,28,310. The assessed filed an appeal before the Appellate Assistant Commissioner (in short "the AAC"), on April 2, 1976. The Appellate Assistant Commissioner did not entertain the appeal on the ground that the assessed had not paid the tax due on-the returned income and, therefore, the appeal could not be entertained in view of the stipulations contained in Section 249(4) of the Act. The assessed later on paid a sum of Rs. 5,000 on March 8, 1977. The Appellate Assistant Commissioner was, however, of the view that the balance amount of tax amounting to Rs. 3,000 (roughly) was to be paid by April 2, 1976, i.e., the date of filing of the appeal and the payment of Rs. 5,000 in March, 1977, was of no consequence. The assessed preferred an appeal before the Tribunal. Accepting the assessed's stand, the Tribunal held that the payment made was to be taken into account and the appeal was to be heard on the merits. On being moved for a reference by the Revenue, the question as set out above has been referred.
3. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessed in spite of service of notice. According to learned counsel for the Revenue, Section 249(4) clearly stipulates that the appeal is not maintainable in case tax admitted in the return of income has not been paid. According to him, the payment made in March, 1977, was really of no consequence.
4. In order to appreciate this stand of the Revenue it is necessary to take note of the provisions contained in Section 249(4) of the Act as it stood at the relevant point of time :
"249. (4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,--
(a) where a return has been filed by the assessed, the assessed has paid the tax due on the income returned by him ; or
(b) where no return has been filed by the assessed, the assessed has paid an amount equal to the amount of advance tax which was payable by him :
Provided that, on an application made by the appellant in this behalf, the Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of this sub-section."
5. A few dates also need to be noted. The appeal was heard by the Appellate Assistant Commissioner on several dates, i.e., March 10, 1977, August 28, 1977, November 4, 1977, and on none of these dates deficiency in the assessed's appeal was pointed out. Before the issuance of the show-cause notice, the assessed had made the deposit. The proviso to Sub-section (4) of Section 249 empowers the Commissioner to permit deposit of deficit tax in case it had not been done earlier in terms of Sub-section (4) of Section 249. That being the position, the Tribunal was justified in its conclusion. Our answer to the question referred is, therefore, in the affirmative, in favor of the assessed and against the Revenue.