2008 (5) TMI 262 - HC - Income Tax

Liability to pay court fee for preferring an appeal to the Tribunal - person aggrieved by an order imposing penalty approaches the Tribunal by preferring an appeal Tribunal calling for fees based on income assessed - Imposition of penalty under section 271 of the Income-tax Act 1961 has no connection or bearing with the total income of the assessee order of the Tribunal is set aside and the matter is remitted back to the Tribunal decide the appeal of the petitioner on the merits

Summary

Issues:
1. Interpretation of court fee requirements for appeals to the Income-tax Tribunal under section 253(6) of the Income-tax Act, 1961.

Analysis:
The writ petitioner appealed to the Income-tax Tribunal regarding a penalty under section 271 of the Income-tax Act, 1961, paying a court fee of Rs. 500. The Tribunal decided the case ex parte, prompting the petitioner to request a recall of the order. The Tribunal agreed to recall the order if the petitioner paid a deficit court fee of Rs. 8,330, citing a Special Bench decision from the Income-tax Appellate Tribunal, Kolkata. However, the petitioner argued that only Rs. 500 was required as court fee for the appeal. The crux of the issue revolved around the interpretation of the court fee requirements for such appeals.

The relevant provision, section 253(6) of the Income-tax Act, 1961, mandates the payment of a prescribed fee for appeals to the Appellate Tribunal. The section outlines different fee amounts based on the total income of the assessee, with specific thresholds for different income levels. Notably, the provision specifies that the fee must be paid based on the total income of the assessee mentioned in the appeal. Therefore, when challenging the assessment of total income, the fees mentioned in the provision must be paid. However, in cases of penalties under section 271, where the penalty imposition is not directly linked to the total income of the assessee, the appeal falls under clause (d) of the provision, which covers other appeals not related to total income.

The Court concluded that the Special Bench decision from the Income-tax Appellate Tribunal, Kolkata, was not convincing. The Tribunal erred in following the Special Bench's ratio and requiring the petitioner to pay a higher court fee. The Court set aside the Tribunal's order and directed a reconsideration of the appeal on its merits, presuming that the appropriate court fees had been paid. This judgment clarifies the application of court fee requirements for appeals to the Income-tax Tribunal under section 253(6) of the Income-tax Act, 1961, distinguishing between appeals related to total income assessments and those concerning penalties without a direct nexus to total income.