Section 249

Section 249 — the law in short

What the courts have decided on section 249, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• CIT v Pawan Kumar Laddha Supreme CourtCuts both ways
  Is payment of admitted tax under s.249(4) a condition that must be satisfied again when the appeal goes on to the Tribunal?
  The Supreme Court treated s.249(4)(a) as a mandatory condition for the admission of a first appeal by the CIT(A), but held that the condition belongs to s.249 alone and cannot be read into s.253(1)(b). Once satisfied at the first-appeal stage, the assessee does not have to pay the admitted tax over again to appeal to the Tribunal.
• Collector, Land Acquisition, Anantnag v Mst. Katiji Supreme CourtCuts both ways
  Your appeal is late. How strictly will 'sufficient cause' be read?
  Liberally. A litigant gains nothing by filing late, refusal can destroy a meritorious cause at the threshold, and where substantial justice and technical considerations clash, substantial justice must win.
• PCIT v Abdul Zahid — admitted tax paid after the appeal was filed but before the Commissioner (Appeals) decided it: the appeal must be heard on merits High CourtHelps taxpayer
  My client filed his appeal without paying the tax on the returned income, then paid it a fortnight before the Commissioner (Appeals) passed the dismissal order. Is the appeal gone?
  No, on the Karnataka High Court's line. Where the admitted tax liability was paid, albeit belatedly and not at the point of filing, the dismissal of the appeal for non-payment at the time of filing is not justified and the appeal must be restored to the Commissioner (Appeals) to be decided on merits. The High Court agreed with the Tribunal, which had followed the Division Bench in CIT-III v. K. Satish Kumar Singh, found no substantial question of law, and dismissed the Revenue's appeals.
• CIT v Jagat Novel Exhibitors Pvt Ltd — the Commissioner (Appeals) must actually decide the section 249(4)(b) exemption and record reasons; admitting the appeal is not a silent exercise of the discretion High CourtCuts both ways
  No return was filed and no advance tax was paid, but the Commissioner (Appeals) admitted the appeal and decided it. The department now says the appeal was never maintainable. Can the Tribunal presume that the Commissioner (Appeals) exercised her power to exempt?
  No. The Delhi High Court held that the proviso to s.249(4)(b) requires the Commissioner (Appeals) to decide, and to record in writing, whether there were good and sufficient reasons to exempt the assessee from paying an amount equal to the advance tax, and that this is mandatory. The Tribunal in that case had reasoned that because the Commissioner (Appeals) had admitted and adjudicated the appeals, it could be assumed she had exercised her discretion and found good and sufficient reasons; the High Court held the requirement had simply not been complied with. Note carefully that at paragraph 24 the Court expressly declined to dispose of the appeals on this reasoning and said it had referred to the section only to clarify the legal position.
• CIT v Manojkumar Beriwal High CourtCuts both ways
  Does the tax to be paid before an appeal is admitted under s.249(4) include interest under ss.234A, 234B and 234C?
  The CIT(A) dismissed an appeal because the assessee had paid the tax but not the s.234B/234C interest, treating 'tax' in s.249(4) as including interest. The Bombay High Court upheld the Tribunal's reversal, holding that 'tax' is separately defined in s.2(43) and 'interest' in s.2(28A), and that the expression 'tax' in s.249(4) does not include interest.
• D. Komalakshi v Dy. CIT — no money, no appeal: the section 249(4) bar bites even where the whole search and the block assessment are challenged High CourtHelps department
  My client wants to challenge the search itself and the jurisdiction to make a block assessment. He has filed a block return but has no funds to pay the tax on the returned undisclosed income. Can the Commissioner (Appeals) refuse to admit the appeal?
  Yes. Where a return has been filed, s.249(4)(a) makes payment of the tax due on the returned income a condition of admission, and a challenge to the search or to the jurisdiction under s.158BC does not displace it. The Karnataka High Court upheld the Commissioner (Appeals) and the Tribunal in refusing to admit the appeals, answering the questions of law against the assessees — but, on the assessees' counsel undertaking that they would pay, gave them four weeks to make good the admitted tax and directed that if they did, the Commissioner (Appeals) must hear the appeals on merits uninfluenced by the earlier proceedings.
• Mohd. Farooque Mohd. Rafique Bagban v ITO ITATHelps taxpayerJudgment not reachable
  Your first appeal is more than a year late because of illness. Is it too late?
  Not necessarily. Illness during the pandemic was accepted as sufficient cause, a delay of about thirteen to fourteen months was condoned, and all three appeals were sent back to the CIT(A) to be decided on merits.
• Statutory position — section 249: the fee, the thirty days, condonation, and the section 249(4) bar that must be cleared before the appeal is admitted CBDT Circulars & InstructionsCuts both ways
  I am filing a first appeal to the Commissioner (Appeals). What exactly must I have done before the appeal can even be admitted, and from what date do the thirty days run?
  Section 249(4) is a bar on admission, not a ground of dismissal on the merits: no appeal under Chapter XX shall be admitted unless, at the time of filing, the assessee has paid the tax due on the income returned (clause (a)) or, where no return was filed, an amount equal to the advance tax that was payable (clause (b)). Only clause (b) can be relaxed — on an application by the appellant, the Joint Commissioner (Appeals) or Commissioner (Appeals) may for any good and sufficient reason recorded in writing exempt him from clause (b); there is no such escape from clause (a). The appeal itself must be presented within thirty days of the date of service of the notice of demand (or, in the other cases, of intimation of the order appealed against), and s.249(3) lets the appellate authority admit a late appeal on sufficient cause.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.