Mansukhlal vs Commissioner of Income Tax and Another

Shantanu Kemkar, J.

THIS appeal by the assessee u/s 260A of the Income Tax Act, 1961 [for short ""the Act""] is directed against the order dated 21.11.2006 passed

by the Income Tax Appellate Tribunal, Indore Bench [for short ""the ITAT""] in IT (SS) A No.39/Ind/05 for the block period 01.04.1996 to

26.06.2002 by which the assessee''s appeal against the order dated 30.12.2004 passed by the CIT (A) has been dismissed.

The CIT (A) vide order dated 30.12.2004 dismissed the assessee''s appeal for non compliance of the requirement of payment of admitted tax

as provided u/s 249(4) of the Act. The said order on being challenged before the ITAT, the ITAT also dismissed the assessee''s appeal upholding

the order passed by the CIT (A) dismissing the appeal holding it to be not maintainable in view of non payment of admitted tax. Rectification

application submitted by the assessee before the ITAT was also rejected vide order dated 25.07.2008 passed in Misc. Appeal No.59/Ind/98.

Feeling aggrieved by the aforesaid orders passed by the CIT (A) and the ITAT, the assessee has filed this appeal.

Shri P.M.Choudhary, learned counsel for the appellant argued that in the search and the seizure conducted by the revenue, the Hundis of the

assessee were seized. On account of the seizure of Hundis it became impossible for the assessee to have realized the amount of Hundis and to

have paid the admitted tax for making the appeal competent. He, however, submitted that by now the revenue has realized the amount of seized

Hundis and on such realization the revenue has recovered more amount than the amount of admitted tax which was required to have been paid by

the assessee so as to make the appeal before the CIT (A), maintainable. In the circumstances he prayed that the said recovery from the Hundis

may be ordered to be adjusted towards the payment of admitted tax treating it to be compliance of the requirement of Section 249(4) of the Act

and the CIT (A) be directed to decide the assessee''s appeal on merits.

Ms. Veena Mandlik, learned counsel appearing for the revenue did not dispute that till date the amount realized by the revenue from the

aforesaid Hundis seized from the assessee is more than the amount of the admitted tax which was required to be paid by the assessee to make his

appeal competent before the CIT (A).

Having considered the aforesaid subsequent event and undisputed position that by now the amount more than the admitted tax has been

recovered by the revenue out of the seized Hundies, we are of the considered opinion that the defect in the appeal before the CIT (A) due to non-

compliance of payment of admitted tax which is a directory requirement can be treated to have been removed. As a result we direct the revenue to

treat the said realization of the amount towards payment of admitted tax and to treat the appeal before the CIT (A) to be competent for the

purposes of Section 249(4) of the Act.

We accordingly set-aside the impugned orders passed by the CIT (A) and the ITAT and remit the matter to CIT (A) by restoring the appeal

before the CIT (A) with direction to the CIT (A) to decide the assessee''s appeal on merits, in accordance with law, uninfluenced by the earlier

orders passed by it and by the ITAT as expeditiously as possible.

The appeal stands allowed to the extent indicated above.