Application us 249(4)(b) of income tax Act 1961

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Krishna (Querist)
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08 October 2023 where a appeal is filed before cit & return was not filed then appellant is liable to pay tax determined by AO or can make application u/s 249(4)(b) not to exercise the provision of paying tax as determined us 249(4)(b). i have a query whether appellant is required to make application us 249(4)(b) in case of filing of appeal against penalty orders???

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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06 July 2024 Under Section 249(4)(b) of the Income Tax Act, an appellant filing an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)) has the option to make an application requesting not to be required to pay the tax demand or penalty imposed by the Assessing Officer (AO) until the appeal is disposed of.

Here’s how it typically works:

1. Tax Demand: If the appeal is against a tax demand determined by the AO, the appellant can make an application under Section 249(4)(b) to the CIT(A) requesting not to pay the tax demand until the appeal is decided.
2. Penalty Orders: When appealing against penalty orders, the situation can vary:
• Demand of Penalty: If the penalty involves a monetary penalty, such as under Section 271 or other penalty provisions, the appellant may need to make a similar application under Section 249(4)(b) to avoid paying the penalty amount until the appeal is resolved.
• Application Requirement: It is advisable for the appellant to explicitly state their request in the appeal application or separately make an application under Section 249(4)(b) if the appeal includes a penalty component. This ensures that the CIT(A) is aware of the appellant’s intention not to pay the penalty pending the appeal decision.
3. Procedure: The application under Section 249(4)(b) typically needs to be made in writing, clearly stating the grounds for seeking a stay on the payment of tax or penalty. The CIT(A) will then consider the application based on the merits of the case.

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