Madhya Pradesh H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in entertaining the appeal filed against the order of the CIT(A) refusing to exempt the assessee from the operation of the provisions of sub-s. (4) of s. 249 of the IT Act ?

Counsel Appeared

B.K. Rawat, for the Revenue : B.L. Nema, for the Assessee

N.D. OJHA, C.J.:

Against an order of assessment passed by the ITO with regard to the asst. yr. 1976-77, an appeal was preferred by the assessee before the CIT(A). An application was also presented on behalf of the assessee for exemption from the provisions of s. 249(4) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). This application was made under the proviso to s. 249(4) of the Act which contemplates that on an application made by the appellant, the appellate authority may, for any good and sufficient reason to be recorded in writing, exempt it from the operation of the provisions of sub-s. (4).

2. The exemption was sought by the assessee with regard to the payment of the tax due on the income returned by him which was the condition precedent for admission of an appeal in view of cl. (a) of sub-s. (4) of s. 249 of the Act. The application for exemption, however, was not granted by the CIT and an order was passed on 13th July, 1979, saying that the appeal was not admitted and was dismissed in limine. Against this order, an appeal was preferred by the assessee before the Tribunal under s. 253 of the Act. This appeal was allowed by the Tribunal and the matter was remanded to the CIT to dispose of the appeal filed by the assessee afresh in the manner indicated by the Tribunal in its order. Thereafter, an application was made by the CIT before the Tribunal under s. 256(1) of the Act to refer the following two questions to this Court for its opinion:

“1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in entertaining the appeal filed against the order of the CIT(A) refusing to exempt the assessee from the operation of the provisions of sub-s. (4) of s. 249 of the IT Act ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in exempting the assessee from the operation of the provisions of s. 249(4) of the IT Act?”

On the said application being dismissed, the present application has been made by the CIT with a prayer that the Tribunal may be directed to draw up a statement of the case and refer to this Court for its opinion the aforesaid two questions. Having heard learned counsel for the parties, we are of the opinion that there is no substance in this application.

As regards the first question, it has been urged by learned counsel for the Department that since the order passed by the CIT(A) was not an order under s. 250 of the Act but an order under sub-s. (4) of s. 249 of the Act and an appeal before the Tribunal was maintainable only against an order under s. 250 and not against an order under s. 249(4), the appeal which was entertained and allowed by the Tribunal was not maintainable. We find no substance in the submission in view of the decision of the Supreme Court in Melaram & Sons vs. CIT (1956) 29 ITR 607 (SC) : TC8R.213. In that case, the AAC had declined to admit an appeal under s. 30(2) of the Indian IT Act, 1922, on the ground that it was barred by time and no sufficient cause had been made out for condonation of delay. It was held by the Supreme Court that an order holding that there was no sufficient cause for condoning the delay under s. 30(2) of the Indian IT Act, 1922, and rejecting the appeal as time-barred, was an order passed under s. 31 of that Act and an appeal lay from that order to the Tribunal. In our opinion, the principle laid down by the Supreme Court in the case of Melaram (supra) applies with equal force to the facts of the instant case also, the only difference being that in the case of Melaram (supra), the appeal had not been admitted on the ground that it was barred by time, whereas in the instant case, the appeal was not admitted on the ground that the amount of tax, as contemplated by cl. (a) of s. 249(4) of the Act, had not been paid. On the principle laid down by the Supreme Court in the case of Melaram (supra), the order passed by the CIT(A) in the instant case would, therefore, be an order disposing of the appeal under s. 250 of the Act and, consequently, the appeal preferred by the assessee before the Tribunal was maintainable.

In so far as the second question is concerned, suffice it to point out that once it has been found that the appeal before the Tribunal was maintainable, no exception can be taken to the proposition of law that keeping in view the scope of an appeal before the Tribunal, it was open to the Tribunal not only to reverse the order passed by the CIT(A) but also to exercise such jurisdiction as would be exercised by the CIT under the proviso to sub-s. (4) of s. 249 of the Act.

It is for these reasons that we are of the opinion that there is no merit in this application which is accordingly dismissed. In the circumstances of the case, there shall be no order as to costs.

[Citation : 171 ITR 646]