Payment of Admitted Tax Due before Filing an Appeal before the Joint Commissioner (Appeals) or the Commissioner (Appeals) [Section 249(4)]

Section 249(4) provides that appeal shall not be admitted unless—

(a) where a return of income has been filed by the assessee:

Ø the assessee has paid the tax due on the income returned by him on or before the filing of appeal [Mandatory]

(b) where no return of income has been filed by the assessee:

Ø the assessee has paid an amount equal to the amount of advance tax which was payable by him.

In case assessee has not filed its return, the Joint Commissioner (Appeals) or the Commissioner (Appeals) on an application made by the assessee, may, for any good or sufficient reason to be recorded in writing, exempt him from payment of tax.

 

Text of Section 249(4)

^[1][(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal, —

(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or

(b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him:

PROVIDED that, ^[2][in a case falling under clause (b) and] on an application made by the appellant in this behalf, the ^[3][***]  ^[4][Joint Commissioner (Appeals) or the] Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of ^[5][that clause.”]]

 

KEY NOTE

1.   Inserted by the Taxation Laws (Amendment) Act, 1975, with effect from 01.10.1975.

2.   Inserted by the Direct Tax Laws (Amendment) Act, 1989, with effect from 01.04.1989.

3.   Words “Deputy Commissioner (Appeals) or, as the case may be, the” omitted by the Finance (No. 2) Act, 1998, with effect from 01.10.1998. Earlier “Deputy Commissioner (Appeals)” was substituted for “Appellate Assistant Commissioner” by the Direct Tax Laws (Amendment) Act, 1987, with effect from 01.04.1988 and “or, as the case may be, the” was inserted by the Finance (No. 2) Act, 1977, with effect from 10.07.1978.

4.   Inserted by the Finance Act, 2023, with effect from 01.04.2023.

5.   Substituted for “this sub-section” by the Direct Tax Laws (Amendment) Act, 1989, with effect from 01.04.1989.

 

What is contemplated by clause (a) of sub-section (4) of section 249 [Section 249(4)(a)]

What is contemplated by clause (a) of sub-section (4) of section 249 is that when there is an undisputed liability, the appeal filed by the assessee in respect of the disputed liability cannot be admitted unless the assessee pays the admitted liability. The object of clause (a) of sub-section (4) of section 249 is not to entertain the appeal where the assessee fails to pay the undisputed tax liability.

Joint Commissioner (Appeals) or the Commissioner (Appeals) empowered to grant exemption from the payment of tax equal to the amount of advance tax [Proviso to Section 249(4)]

On going through the prescription of proviso to sub-section (4) of section 249 it transpires that the Joint Commissioner (Appeals) or the Commissioner (Appeals) has been empowered to grant exemption from the payment of tax equal to the amount of advance tax which was payable by the assessee in a situation where no return is filed by the assessee. It implies that where the assessee did not file any return for the relevant year and still the assessment was made, the assessee can file first appeal even without the payment of tax provided he satisfies the Joint Commissioner (Appeals) or the Commissioner (Appeals) for the reasons of non-payment of tax. The power of the first appellate authority as per the directive of proviso is not to accept the delayed payment of such tax, but to exempt the payment of tax altogether. The operation of proviso is restricted only to clause (b ) and is not applicable to clause (a) which deals with a situation in which return was filed by the assessee. Thus in such a situation where the return was originally filed by the assessee, the Joint Commissioner (Appeals) or the Commissioner (Appeals) has no power to grant exemption from the making of payment of tax due on the income returned. The requirement of payment of tax in a case covered under clause (a) is to be examined at the time of admission of first appeal.

 

Undisputed tax to be paid before filing appeal [Section 249(4)]

Before filing an appeal, undisputed tax, if any, remaining unpaid should first be paid. An appeal is not as a matter of fact admissible if any tax remains unpaid.

Disqualification to file an appeal

(a) where a return has been filed by the assessee, the assessee has not paid the tax due on the income returned by him;

(b) where no return has been filed by the assessee, the assessee has not paid an amount equal to the amount of advance tax which was payable by him.

 

As per section 249(4) unless and until, assessee has paid income tax due on income returned by him, no appeal under Chapter XX will be admitted and statute does not give any discretion to appellate authority to entertain an appeal or to extend time for paying self assessment tax, except in respect of cases falling under section 249(4)(b) in terms of proviso under said section

The appeal filed by the assessee against certain addition was not considered on merits and was dismissed by the Commissioner (Appeals) on ground that assessee had not paid self assessment tax which assessee had admitted before appellate authority.

On appeal, the assessee submitted that Commissioner (Appeals) ought to have granted time to it to pay self assessment tax. However, when appeal was heard, additional grounds were raised by assessee regarding wrong computation of income. The Tribunal upon considering grounds of appeal raised by assessee at first instance as well as additional grounds, rejected same by holding that self assessment tax was admittedly not paid and there was no satisfactory evidence to substantiate assessee's plea that assessee had wrongly computed income. On appeal.

Held : Section 249(4) provides that, unless and until, assessee has paid income tax due on income returned by him, no appeal under Chapter XX will be admitted and the Statute does not give any discretion to appellate authority to entertain an appeal nor extend time for paying self assessment tax, except in respect of cases falling under clause (b) of section 249(4) in terms of proviso under the said section.

Though such a ground was raised in the appeal memorandum filed before the Tribunal, the assessee appears to have been more interested in canvassing the additional ground with regard to offering a sum of Rs. 82.37 crores relating to inbuilt revenue which according to the assessee was an inadvertent income. The Tribunal had rightly held that there was no satisfactory evidence placed before it to substantiate assessee's plea that they wrongly computed admitted income. Thus, no substantial question of law owner for consideration. [In favour of revenue] (Related Assessment year : 2012-13) – [Pesco Beam Environmental Solutions (P) Ltd. v. DCIT (2020) 275 Taxman 211 : 119 taxmann.com 123 (Mad.)]

 

In terms of section 249(4)(a), stipulation as to payment of tax ante filing of first appeal is only directory and not mandatory and, therefore, where appeal is filed without payment of tax but subsequently required amount of tax is paid, appeal shall be admitted on making payment of tax and taken up for hearing on merits

The Karnataka High Court in the case of CIT v. K. Satish Kumar Singh (2012) 209 Taxman 502 : 19 taxmann.com 154 (Karn.) and in the case of PCIT v. Abdul Zahid M (2017) 394 ITR 727 : 88 taxmann.com 592 (Karn.) took the view that if admitted tax on returned income is paid then the appeal has to be admitted for adjudication by the Commissioner (Appeals) on merits. The Hon’ble Mumbai ITAT in the case of Bhumiraj Constructions v. Addl. CIT (2011) 131 ITD 406 : 11 taxmann.com 333 (ITAT Mumbai) had an occasion to deal with a case where an appeal by the Assessee was dismissed for non-payment of tax due on the income declared in the return of income. The Tribunal firstly observed that there is a distinction between a mandatory and directory provision. If the non-compliance with the requirement of law exposes the assessee to the penal provision, then it is mandatory, but if no penal consequences follow on non-fulfilment of the requirement, then usually it is a directory provision. 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.

The Tribunal examined the objective behind section 249(4) and observed that the same is to ensure the payment of tax on income returned before the admission of appeal. If such payment after the filing of 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. The stipulation as to the payment of tax ante the filing of first appeal is only directory and not mandatory. Whereas the payment of such tax is mandatory but the requirement of paying such tax before filing appeal is only directory.

When the defect in the appeal, being the non-payment of such tax, is removed, the earlier defective appeal becomes valid. It implies that all the consequences which follow on the removal of defect are that the validity is attached to the appeal from the date when it was originally filed and not when the defect is removed. The Tribunal ultimately held that if tax due on income returned is paid even after disposal of the appeal by the Commissioner (Appeals), if such payment is made the defect in the appeal due to non-compliance of a directory requirement of paying such tax before the filing of the appeal, stood removed. Ex-consequential the appeal should have been revived by the first appellate authority.

In the present case, the taxes due on returned income is claimed to has been paid. Therefore the appeal by the Assessee against the order of assessment should be admitted and adjudicated by the Commissioner (Appeals) on merits. In the decision referred to above, it has been held that if the admitted taxes are paid at a later point of time, then the appeal of the assessee should be considered as properly instituted and should be heard and decided by the Commissioner (Appeals) on merits. In view of aforesaid, the order of the Commissioner (Appeals) is set aside and the Commissioner (Appeals) is directed to decide the appeal on merits, subject to verification of payment of taxes (excluding interest) due on the returned income. In the result, the appeal by the assessee is allowed for statistical purposes. [In favour of assessee/Matter remanded] (Related Assessment year : 2006-07) - [Annapoorneshwari Investment v. DCIT(C) [2019] 177 ITD 717 : 107 taxmann.com 417 (ITAT Bangalore)]

Admitted tax as per return of income – Requirement of paying admitted tax before filing appeal is directory – When defect is removed, earlier defective appeal becomes valid. Accordingly, the matter was remanded to Commissioner (Appeals)

For relevant year, Assessing Officer completed assessment under section 143(3) making certain additions to assessee’s income. Assessee filed appeal before Commissioner (Appeals). Commissioner (Appeals) noticed that assessee had not paid taxes on returned income and therefore in view of provisions of section 249(4)(a), appeal filed by assessee was dismissed in limine as unadmitted. In terms of sub-section (4) of section 249, payment of tax is mandatory but requirement of paying such tax before filing appeal is only directory. Tribunal held that payment of admitted tax as per return of income before filing of an appeal is directory, therefore, when defect in appeal, being non-payment of such tax, is removed, earlier defective appeal becomes valid. Accordingly, the matter was remanded to Commissioner (Appeals) for disposal of appeal on merits, subject to verification of payment of taxes due by assessee on returned income. [In favour of assessee/Matter remanded] (Related Assessment Year : 2013-14) – [Sushila Devi Malu (Smt.) v. ITO (2019) 174 ITD 627 (ITAT Bangalore)]

 

Revised return filed not in compliance with requirements of section 139(5) was non-est and same could not constitute a return contemplated in section 249(4)(a)

The assessee was an individual in whose case a search action under section 132(1) was carried out. For the assessment year under consideration, assessee had not filed its regular return under section 139(1) and it was only after a notice under section 153A was issued, assessee filed return of income declaring the total income at Rs. 1.55 crores. Subsequently, the assessee filed a revised return declaring an income of Rs. 6.32 crores. In the assessment finalized under section 143(3) read with section 153A the Assessing Officer determind the total income at Rs. 7.23 crores after making certain additions/disallowances on account of low withdrawals, unexplained credits and rent from property, etc.

The assessee challenged the additions in appeal before the Commissioner (Appeals). The Commissioner (Appeals) referred to the provisions of section249(4), which prescribed that no appeal would be admitted unless at the time of filing of appeal, assessee had paid the tax due on the income returned by him. The Commissioner (Appeals) referred to clause (a) of section 249(4) of the Act and noted that the assessee had not paid the tax on the income declared in the revised return and, therefore, the appeal was dismissed as unadmitted. On Second appeal:

Where assessee filed revised return not in compliance with requirements of section 139(5), same was non-est and could not constitute a return contemplated in section 249(4)(a). [In favour of assessee] (Related Assessment years : 2008-09 and 2009-10) – [Mohammed Farooque Sarang v. DCIT(C) [2017] 164 ITD 573 : 81 taxmann.com 374 (ITAT Mumbai)]

The revenue pointed out that at the time of filing of appeal before the Commissioner (Appeals), admittedly the tax on the income returned was not paid. Under these circumstances, the rigors of section249(4)(a) clearly come into operation and the appeal before the Commissioner (Appeals) deserved to be treated as unadmitted. It is also axiomatic that so far as the situation contemplated in clause (a) of section249(4) of the Act is concerned, the Commissioner (Appeals) is not vested with any power to waive payment of the admitted tax and entertain the appeal in contrast to the situation contemplated in clause (b) to section 249(4) of the Act. However, the defense put up by the assessee is that the non-payment of admitted tax on returned income is a curable defect and once such a defect has been cured, there is enough justification for the appeal being admitted by the Commissioner (Appeals).

The co-ordinate Bench in the case of Smt. Banu Begum, v. DCIT (2012) 22 taxmann.com 235 (ITAT Hyderabad) has observed that non-payment of admitted tax is a defect which can be cured by payment of tax. In fact, the Karnataka High Court in the case of CIT v. K. Satish Kumar Singh (2012) 209 Taxman 502 : 19 taxmann.com 154 (Karn.) opined that even after the dismissal of appeal by the Commissioner (Appeals) for non-payment of admitted tax, if assessee pays the admitted tax, even then the Commissioner (Appeals) may recall the order dismissing the appeal and consider the appeal on its merits. In view of the aforesaid proposition, in the present case too, since the assessee has claimed that it has paid tax on the returned income before passing of order by the Commissioner (Appeals), it will be in the fitness of things that the matter is remitted back to the file of Commissioner (Appeals) to be considered afresh on merits. In the result, assessee's appeal is allowed for statistical purposes. – [Mohammed Farooque Sarang v. DCIT(C) [2017] 164 ITD 573 : 81 taxmann.com 374 (ITAT Mumbai)]

Upholds seized cash with Revenue as tax payment for Commissioner (Appeals) admission under section 249(4) - Commissioner (Appeals) denied hearing of appeal on plea that assessee had failed to pay due tax on returned income and had defaulted in terms of provisions of section 249(4)(a), since amount that had been seized by revenue from assessee was far in excess of amount of tax payable on returned income, assessee could not have been denied hearing

Authorised officer conducted a search under section 132 upon assessee and seized an amount of Rs. 4.60 lakhs from his possession. Thereafter assessee filed return of income showing due tax payable on returned income as Rs. 1.61 lakhs. He stated that amount seized during search at Rs. 4.60 lakhs should be treated as paid. Assessing Officer processed under section 143(1) return of income filed by assessee and issued intimation creating a demand of Rs. 2.15 lakhs. He did not adjust amount of tax payable on returned income against amount that had been seized from assessee. Commissioner (Appeals) denied hearing of appeal on plea that assessee had failed to pay due tax on returned income and had defaulted in terms of provisions of section 249(4)(a). In instant case, amount of Rs. 4.60 lakh which was available with revenue was far in excess of amount of tax payable in terms of returned income. Assessee had duly complied with requirements of section 249(4)(a) and he could not have been denied hearing. [In favour of assessee] (Related Assessment year : 1996-97) – [CIT v. Pramod Kumar Dang (2014) 361 ITR 137 : 265 CTR 1 : 42 taxmann.com 301 : [TS-58-HC-2014(DEL)] (Del.)]

 

Defect arising due to non-compliance of section 249(4) is a curable one

Commissioner (Appeals) having noticed that assessee had not paid admitted tax, invoked provisions of sub-section (4) of section 249 and dismissed appeal in limine as non-maintainable. Later on, assessee filed a petition before Commissioner (Appeals) informing that admitted tax for block period had been paid and prayed for restoration of appeal and for disposing of same on merits. Commissioner (Appeals) rejected petition holding that there is no provision under Act to restore appeal which was dismissed for violation of provisions of section 249(4). Defect arising due to non-compliance of section 249(4) is a curable one. Since assessee was not having sufficient funds at relevant time for compliance of section 249(4), there existed sufficient reasons for not filing a valid appeal before Commissioner (Appeals) and, therefore, matter required to be restored for adjudication on merits. [In favour of assessee] (Block period 1996-97 to 2002-03) – [T. Kishan v. ACIT(C) (2013) 56 SOT 114 : (2012) 23 taxmann.com 383 (ITAT Hyderabad)]

 

If the appeal is filed without the payment of tax on returned income but subsequently the required amount of tax is paid, the appeal shall be admitted on payment of tax and appeal has to be decided on merit

Objective behind section 249(4) is to ensure payment of tax on income returned before admission of appeal and if such payment after filing of appeal but before it is taken up for disposal validates defective appeal, then there is no reason as to why doors of justice be closed on a poor assessee who, could manage to make payment of tax at a later date. Whereas payment of such tax is mandatory but requirement of paying such tax before filing appeal is only directory. When defect in appeal, being non-payment of such tax, is removed, earlier defective appeal becomes valid. Once one calls an appeal as valid, it implicit that it is not time barred and it implies that all consequences which follow on removal of defect are that validity is attached to appeal from date when it was originally filed and not when defect is removed. (Related Assessment year : 2006-07) - [Bhumiraj Constructions v. Addl. CIT (2011) 135 TTJ 357 : 131 ITD 406 : 49 DTR 195 : 11 taxmann.com 333 (ITAT Mumbai)]

Each heading in Chapter XX deals with a different subject-matter and one cannot read words in Chapter XX-A into words used in Chapter XX-B - Therefore, provision of section 249(4)(a), which insists on assessee satisfying a condition of paying admitted tax as condition precedent to his filing of appeal, cannot be read into section 253(1)(b) as it stood prior to 01.10.1998

Chapter XX deals with ‘Appeals and revisions’. Chapter XX is divided into headings ‘A’ to ‘F’. Section 246 enumerates a list of orders of the Assessing Officer against which appeals(s) would lie. In that list of orders, an appeal to the Tribunal under section 253(1) is not mentioned. This is a very important indicia to show that each heading in Chapter XX deals with a different subject-matter and one cannot read the words in Chapter XX-A into the words used in Chapter XX-B. Chapter XX-A deals with appeals to the Deputy Commissioner and the Commissioner (Appeals), whereas Chapter XX-B deals with appeals to the Tribunal. Similarly, reference to the High Court lies under Chapter XX-C. Thus, each heading is a standalone item and, therefore, one cannot read the provision of section 249(4)(a ) into section 253(1)(b). If the argument of the department was to be accepted, then, in that event, no appeal or reference could lie even to the High Court without complying with the provisions of section 249(4)(a). This cannot be the scheme of Chapter XX. Section 253(1)(b) refers to an assessee filing an appeal to the Tribunal against an order passed by an Assessing Officer under section 158BC(c). Clause (b) came to be inserted into section 253(1) by the Finance Act, 1995 and that too with effect from 01.07.1995. The very concept of the block assessment came to be inserted in the Act vide the Finance Act, 1995, with effect from 01.07.1995, whereas the words ‘this Chapter’ in section 249(4) came to be inserted vide Taxation Laws (Amendment) Act, 1975, with effect from 01.10.1975. This is one more reason to confine the expression ‘this Chapter’ in section 249(4) to Chapter XX-A without it being extended to section 253(1)(b) which is there in Chapter XX-B. Further, under the scheme of Chapter XX, no appeal under section 249(4)(a) in Chapter XX-A was admissible without the assessee having paid the admitted tax due on the income returned by him. Once section 249(4)(a) is treated as a mandatory condition for filing an appeal before the Commissioner (Appeals) and once that condition stands satisfied at the time of filing an appeal to the Commissioner (Appeals), then there is no necessity for the assessee to once again pay the admitted tax due as a condition precedent to his filing the appeal before the Appellate Tribunal under section 253(1)(b). Lastly, one must keep in mind the principle that the doctrine of incorporation cannot be invoked by implication. A provision which insists on the assessee satisfying a condition of paying the admitted tax as a condition precedent to his filing of the appeal under section 253(1)(b) is a disenabling provision. Such disenabling provisions must be clearly spelt out by the Legislature while enacting the Statute. The Courts have to be careful in reading into the Act such disenabling provisions, as that would tantamount to judicial legislation which the Courts must eschew. It is for the Parliament to specifically say that no appeal shall be filed or admitted or would be maintainable without the assessee(s) paying the admitted tax due. That has been done only in the case of an appeal under section 249(4)(a). One cannot read such a disenabling provision into section 253(1)(b). Therefore, there was no merit in the revenue’s appeal and the same was to be dismissed. [In favour of assessee] (Block period 1986-87 to 14.09.1995) –[CIT, Indore v. Pawan Kumar Laddha (2010) 324 ITR 324 : 231 CTR 219 : 190 Taxman 169 (SC)]

“Scope of Tax” -  Expression ‘Tax’ does not include interest for purpose of section 249(4)

On the literal reading of section 249(4), the language used by the legislature is has paid tax dues. As per the definition in section 2(43), tax does not include interest which is independently referred to in section 2(28A). - When the legislature itself has used two different expressions and defined them separately, then whilst considering the language of a section, the court is bound to look at the definitions in the legislation for the purpose of interpreting and construing the expressions and words under the Act. - The object being to avoid conflict and have a harmonious interpretation, unless the context otherwise requires. (4). Therefore, the expression “tax” does not include interest for the purpose of section 249(4). - [CIT v. Manoj Kumar Beriwal (2009) 316 ITR 218 : 217 CTR 407 (Bom.)]

Tax includes only “Admitted/Undisputed” Tax, Section 249(4) not applicable when liability to pay tax was disputed

Where petitioner assessee disputed liability on ground that he could not have been assessed as HUF as on date of filing return and on date of assessment there was no HUF in existence, right guaranteed to petitioner to prefer an appeal could not be taken away under section 249(4) by taking view that petitioner had failed to pay tax due on income shown in return filed.

What is contemplated by clause (a) of sub-section (4) of section 249 is that when there is an undisputed liability, the appeal filed by the assessee in respect of the disputed liability cannot be admitted unless the assessee pays the admitted liability. The object of clause (a) of sub-section (4) of section 249 is not to entertain the appeal where the assessee fails to pay the undisputed tax liability. In the instant case, it was the case of the petitioner that the intimations issued were wholly illegal and on that basis the petitioner sought for rectification of the intimations issued by filing applications under section 154 and since the first respondent failed to allow the applications filed by the petitioner or rectify the intimations issued, the petitioner had preferred appeals against the intimations issued and the orders passed under section 154. Therefore, it was clear that though the petitioner had filed the returns, the petitioner had disputed his liability to be assessed as HUF and pay the tax liability imposed on him. Under these circumstances, the view taken by the second respondent that the appeals filed by the petitioner could not be admitted since the petitioner had failed to pay the tax due on income shown by him in the return filed by him was erroneous in law. Sub-section (4) of section 249 has to be construed in the backdrop of the right to appeal provided to an assessee under section 246 . Under these circumstances, while interpreting sub-section (4) of section 249 the court will have to keep in mind the object of sub-section (4) of section 249 and also the right to prefer an appeal guaranteed to an assessee. In that view of the matter, sub-section (4) has to be liberally construed to serve the object of the right provided to an assessee, and not with a view to deprive the right provided to an assessee to prefer an appeal. When the very liability was disputed by the petitioner on the ground that the petitioner could not have been assessed as an HUF as on the date of filing of the return and on the date of the assessment there was no HUF in existence, the right guaranteed to the petitioner to prefer an appeal could not be deprived by taking the view that the petitioner had failed to pay the tax due on the income shown in the return filed. Therefore, the order passed by the second respondent was liable to be quashed. (Related Assessment years : 1991-92 and 1992-93) - [T. Govindappa Shetty & Others v. ITO (1998) 231 ITR 892 (Karn.)]

Assessee’s appeal was held not to be maintainable where assessee failed to pay tax due on returned income by the date of filing appeal for the CIT(A) had not the power to condone that lapse in view of applicability of section 249(4) (a) on facts of assessee’s case

A search of the assessee’s premises was conducted on 24.09.1987. The assessee filed his return of income for the assessment year 1988-89 on 21.03.1991. The Assessing Officer completed the assessment under section 143 on 31.12.1991 by making certain additions. The assessee filed appeal before Commissioner on 30.11.1992, objecting to the various additions. The Commissioner (Appeals) noted that the assessee had not paid the tax due on returned income at the time of filing the appeal and that under section 249(4)(a) as amended with effect from 01.04.1989, the appeal could not be admitted because of that lapse. The assessee contended that assessee’s lapse in not paying the tax on the returned income was bona fide and it should be condoned. The Commissioner (Appeals), rejecting the assessee’s contention, declined to entertain the appeal, holding that with effect from 01.04.1989, the Commissioner (Appeals) had no power to condone that lapse.

On second appeal, the assessee contended that the Commissioner (Appeals) ought to have condoned the lapse on the ground that assessment proceedings could be presumed to have started with the search conducted on 24.09.1987, i.e., much before the amended provisions of section 249(4)(a) came into effect on 01.04.1989.

Held : There was no dispute that the assessee had not paid tax on the returned income before filing of the appeal on 03.02.1992, nor any advance tax or tax on account of self-assessment had been paid by the assessee. As such the provisions of section 249(4)(a) were clearly attracted in the case of the assessee. Being a creature of the Act, the Commissioner (Appeals) has to function within the parameters of the statute and as such has no inherent powers in the matter of entertaining an appeal. He does not have power to transgress the limits placed by the statute. Under the circumstance the Commissioner (Appeals) was justified in not entertaining the appeal filed by the assessee. In the instant case, the return of income was filed on 21.03.1991 and the assessment proceedings started with the issue of notice under section 143(2) thereafter, that is much after 01.04.1989, when the amended provisions of section 249(4)(a) came into effect. The assessee contention that the assessment proceedings started with the search of the assessee’s premises on 24.09.1987 could not be accepted because such an interpretation would produce a manifestly absurd and unjust result which could never have been intended by the Legislature. The Commissioner (Appeals) was, therefore, justified in not entertaining this appeal. [In favour of revenue] - [Khushmanlal Hiralal v. CIT (1996) 57 ITD 531 : 56 TTJ 62 (ITAT Ahmedabad)]