2010 (7) TMI 679 - AT - Income Tax

Search and seizure - Inability to pay requisite fees - A plain reading of Order XXXIII of the Civil Procedure Code indicates that the said provision is essentially to safeguard the interests of indigent persons who do not have the means to pay for fees to seek legal remedies available to them - It is thus clear that the benefit of pauper provisions under Order XXXIII is confined to the underprivileged class of public which does not have means to pay the costs of litigation - Learned assessee wanted to take a rain check on our offer, by making a prayer that in the event of our formally holding so in the order, she should be given liberty to pay the fees and seek restoration of appeal - In any event, it is for the assessee lawyer, who is apparently well versed with the intricacies of law, to take the call whether she wants to pay the appropriate fees, and file fresh appeals along with condonation of delay, or to seek restoration of these appeals -as may be permissible in accordance with the law - Decided against the assessee

Summary

Issues Involved:
1. Compliance with Section 253(6) of the Income Tax Act, 1961 regarding payment of requisite fees.
2. Assessee's plea for exemption from payment of appeal fees citing indigence.
3. Tribunal's authority to grant exemption from payment of appeal fees.
4. Applicability of Order XXXIII of the Civil Procedure Code to Income Tax Appellate Tribunal proceedings.
5. Merits of the assessee's claim regarding the frivolous nature of the case against her.

Issue-wise Detailed Analysis:

1. Compliance with Section 253(6) of the Income Tax Act, 1961:
During the hearing, it was observed that the assessee had not complied with Section 253(6) of the Income Tax Act, 1961, which mandates the payment of requisite fees for filing appeals. The assessee, a lawyer by profession, was subjected to a search operation by income tax authorities, and the appeals were related to the assessments framed as a result of this search.

2. Assessee's Plea for Exemption from Payment of Appeal Fees:
The assessee argued that she was unable to pay the appeal fees due to indigence and invoked the principles of Order XXXIII of the Civil Procedure Code, which aims to ensure that justice is not denied to indigent persons. She cited several judicial precedents, including judgments from the Supreme Court and various High Courts, to support her plea for exemption. The assessee claimed that her total appeal fees amounted to Rs 7,510 and that she only had Rs 10,000 in cash, which was insufficient to cover the fees.

3. Tribunal's Authority to Grant Exemption from Payment of Appeal Fees:
The Departmental Representative argued that the Tribunal, being a creature of the Income Tax Act, 1961, did not have the authority to question or read down the provisions of the Act. The representative emphasized that the Tribunal should interpret the law as it exists and refrain from extending its powers beyond the scope defined by the Act. The representative also contended that the provisions of Order XXXIII of the Civil Procedure Code were intended for destitute individuals and not for professionals like lawyers.

4. Applicability of Order XXXIII of the Civil Procedure Code:
The Tribunal examined the applicability of Order XXXIII, which safeguards the interests of indigent persons. The Tribunal noted that the definition of an indigent person, as per Order XXXIII, includes individuals who do not possess means exceeding Rs 1,000 or who do not have sufficient means to pay the prescribed fees. The Tribunal found that the assessee did not fit this criterion, as she had the means to pay the fees but chose not to prioritize it.

5. Merits of the Assessee's Claim:
The Tribunal considered the merits of the assessee's claim that the case against her was frivolous and that she should not be burdened with the appeal fees. However, the Tribunal concluded that the frivolity of the case was irrelevant to the application of Order XXXIII, which is meant to protect the legal rights of indigent persons. The Tribunal found that the assessee, being a practicing lawyer with an annual income of Rs 70,000, did not qualify as an indigent person and had the means to pay the filing fees.

Conclusion:
The Tribunal dismissed all six appeals as not maintainable due to the assessee's failure to pay the requisite appeal fees. The Tribunal also declined to address the broader question of its authority to grant exemptions from payment of appeal fees, deeming it a hypothetical issue given the factual matrix of the case. The decision was pronounced in the open court on July 30, 2010.