Non-Payment of Self-Assessment Tax u/s 140A Renders Appeal Not Maintainable: ITAT Sets Aside CIT(A)'s Order [Read Order]
Observing that the assessee had failed to pay the statutory self-assessment tax along with the Return of Income, which is a mandatory pre-condition for the maintainability of an appeal, the Tribunal ruled that the CIT(A) erred in adjudicating the appeal on merits.
Self-Assessment Tax - Taxscan
Self-Assessment Tax - Taxscan
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) quashed the order passed by the CIT(A), holding that the appeal filed by the assessee was not maintainable under the provisions of the Income Tax Act, 1961.
Sama Yashodha who was a legal representative of the deceased assessee (Sama Ramachandra Reddy) the revenue contested on the preliminary legal ground of non-maintainability.
The Revenue challenged the Commissioner of Income Tax (Appeals) [CIT(A)]'s decision which had deleted additions made in the assessment order for the Assessment Year 2007-08 with the legal ground of maintainability.
The Counsel for the Revenue submitted that the assessee had declared income in the Return of Income but had not paid the corresponding self-assessment tax under Section 140A of the Income Tax Act.
The Counsel argued that this non-compliance triggered Section 249(4) of the Act, which explicitly mandates that an appeal shall not be admitted by the CIT(A) unless the tax payable on the returned income is paid.
The two-member bench, comprising Vijay Pal Rao (Vice President) and Madhusudan Sawdia (Accountant Member), reviewed the records and noted that the CIT(A) had, in fact, recorded the Assessing Officer's objection regarding the non-payment of self-assessment tax in the impugned order.
The tribunal observed that the CIT(A) neither addressed this objection nor gave the assessee any opportunity to rectify the default, choosing instead to proceed with the adjudication on merits.
The Bench observed that compliance with Section 140A of the Income Tax is a mandatory requirement for the proper filing and maintainability of an appeal under Section 249(4) of the Income Tax Act.
The Tribunal concluded that since the prerequisite of self-assessment tax payment was not fulfilled, the appeal before the CIT(A) was not legally maintainable. The tribunal set aside the order of the CIT(A). The appeal filed by the Revenue was allowed.
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