Facts:Against the appeal filed by the assessee, the CIT(A) noted that self-assessment tax on the income returned by the assessee was not paid. Ten days’ time was given by the CIT(A) to the assessee to make the payment. The assessee expressed its inability to pay the tax. The CIT(A) passed the order u/s.249(4) dismissing the appeal as not maintainable. Against this, the assessee filed further appeal.
Held:
The Tribunal noted as under: 1. It is sine qua non that the assessee must have made the payment of tax on the income returned. If no payment of tax on the income returned is made at all and the appeal is filed, it cannot be admitted.
2. If, however, the appeal is filed without the payment of such tax, but subsequently the required amount of tax is paid, the appeal shall be admitted on payment of tax and taken up for hearing.
3. The objective behind section 249(4) is to ensure the payment of tax on income returned before the admission of appeal. If such payment is made after filing of the appeal but before it is taken up for disposal validates the defective appeal, then there is no reason as to why the doors of justice be closed on a poor assessee who could manage to make the payment of tax at a later date.
4. The stipulation as to the payment of such tax before the filing of first appeal is only directory and not mandatory. Although the payment of such tax is mandatory, the requirement of paying such tax before filing appeal is only directory.
5. The distinction between a mandatory provision and a directory provision is that if the non-compliance with the requirement of law exposes the assessee to the penal provisions, then it is mandatory, but if no penal consequences follow on non-fulfilment of the requirement, then usually it is a directory provision.
6. It is a trite law that omission to comply with a mandatory requirement renders the action void, whereas omission to do the directory requirement makes it only defective or irregular. On the removal of such defect, the irregularity stands removed and the status of validity is attached.
7. When the defect in the appeal, being the nonpayment of such tax, is removed, the earlier defective appeal becomes valid. Once we call an appeal as valid, it is implicit that it is not time-barred. It implies that on the removal of defect the validity is attached to the appeal from the date when it was originally filed and not when the defect is removed.
8. In the instant case, it is found that the assessee paid the tax due on income returned, although after the disposal of the appeal by the CIT(A). On such payment, the defect in the appeal due to non-compliance of a directory requirement of paying such tax before filing of the appeal stood removed. Therefore, this appeal should have been revived by the first Appellate Authority. Under such circumstances the impugned order is set aside and the matter restored to the file of the CIT(A) for disposal of the appeal on merits.
