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249 (4) requires only tax on income returned or tax payable as advance tax be paid, for admission of an appeal.  Payment of disputed tax is not a condition for admission of an appeal.  However the AO could hold the assessee as an 'assessee in default' on account of non payment demand.  Therefore, it is essential a stay application is filed before him.  Mere filing of an appeal does not result in stay on the collection.

Dear All,
I would like to have suggetions and some citations on the following case:-

The AO issue notice u/s 148 for three years with in time. But the assessee didnot reply to the notice issued by AO. Then AO issued notice u/s 143(2) within time limit prescribed. Before Issuing notice u/s 143(2) AO neither gives us any show cause nor assessee submitted any return u/s 148. Whether notice u/s 143(2) is valid? Secondly, AO proceeded to assess the income u/s 144 whether AO can do so?

If there is no response to 148, ie if there is no return in response to notice under section 148, the question of issuing 143 (2) does not arise at all.  If the AO has issued 143 (2), it is an invalid notice.  It may be noticed that 143 (2) is issued only where there is a ROI.  The next issue you have mentioned is that the AO has proceeded under section 144.  The lack of response to the notice under section 148 will be ground for proceeding under section 144.  However the proviso to section 144 requires the AO to issue SCN and such SCN is dispensed only where a 142 notice is issued prior to the assessment.  In your case, it appears that neither a SCN nor a 142 notice issued and therefore the proviso clearly applies and the assessment may not be a valid assessment under section 144.