2010 (4) TMI 14 - SC - Income Tax

Payment of Tax before filing an appeal before ITAT u/s 249(4)(a) - According to the assessee, Section 249, which deals with Appeals to the Commissioner (Appeals), falls in Chapter XX(A), whereas Appeals to the Appellate Tribunal under Section 253(1)(b) falls in Chapter XX(B). - After going through the provisions of Section 249(4)(a) and Section 253(1)(b) of 1961 Act, which, at the relevant time, dealt with an order passed by the Assessing Officer under Section 158BC(c) of 1961 Act, the Appellate Tribunal held that one cannot read Section 249(4)(a) into the provisions of Section 253(1)(b) of 1961 Act; that while Section 253(1) was an enabling provision giving right of appeal to the assessee to file an appeal to the Appellate Tribunal, there was no provision similar to Section 249(4)(a), which fell in Chapter XX(A) in Section 253(1)(b), hence, it was not a condition mandatory to the filing of the appeal to the Appellate Tribunal to pay undisputed tax amount as condition precedent held that - . It is for the Parliament to specifically say that no appeal shall be filed or admitted or 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) of 1961 Act. We cannot read such a dis-enabling provision into Section 253(1)(b) of 1961 Act. If we do so, we are judicially legislating by reading something into the Act which is not there. In such a case, the question would also arise as to why the Appellate Tribunal should not be given the power to dispense with or waive such a condition? All this would come in the realm of legislation which can be done only by the Legislature. Hence, we find no merit in these civil appeals filed by the Department. revenue s appeal dismissed.

Summary

Issues:
1. Maintainability of appeal before the Income Tax Appellate Tribunal on the ground of non-payment of admitted tax.
2. Interpretation of Section 249(4)(a) of the Income Tax Act, 1961 in relation to appeals to the Appellate Tribunal.
3. Applicability of Section 249(4)(a) in Chapter XX(A) to appeals under Section 253(1)(b) falling in Chapter XX(B).

Issue 1: Maintainability of appeal before the Income Tax Appellate Tribunal on the ground of non-payment of admitted tax:
The appeal was filed by the assessee before the Income Tax Appellate Tribunal against an order under Section 158BC of the Income Tax Act, 1961. The Revenue contended that the appeal should be dismissed as not maintainable since the assessee had not paid the admitted tax before filing the appeal. The Department relied on Section 249(4)(a) of the Income Tax Act, 1961 to support its objection. The Appellate Tribunal held that it was not mandatory for the assessee to pay the undisputed tax amount as a condition precedent to filing the appeal before the Appellate Tribunal. The High Court affirmed this view, leading to the civil appeals before the Supreme Court.

Issue 2: Interpretation of Section 249(4)(a) of the Income Tax Act, 1961 in relation to appeals to the Appellate Tribunal:
The Department argued that Section 249(4)(a) mandates that no appeal under Chapter XX shall be admitted unless the assessee has paid the admitted tax due on the income returned by him. The Department contended that this provision applied to appeals to the Appellate Tribunal under Section 253(1)(b) as well. However, the Supreme Court disagreed, emphasizing that each heading in Chapter XX dealt with different subject matters. It was concluded that Section 249(4)(a) could not be read into Section 253(1)(b) of the Income Tax Act, especially considering the specific provisions and the legislative intent behind each section.

Issue 3: Applicability of Section 249(4)(a) in Chapter XX(A) to appeals under Section 253(1)(b) falling in Chapter XX(B):
The Supreme Court analyzed the legislative history and the timing of the insertion of relevant provisions. It was noted that Section 249(4)(a) was specific to Chapter XX(A) and could not be extended to Chapter XX(B. The Court highlighted that the doctrine of incorporation cannot be invoked by implication, and a dis-enabling provision must be explicitly stated by the Legislature. Therefore, the Court dismissed the civil appeals filed by the Department, emphasizing that judicial legislation should be avoided, and the power to introduce such conditions lies with the Legislature.

In conclusion, the Supreme Court dismissed the civil appeals filed by the Department and directed the Appellate Tribunal to dispose of the assessee's appeal expeditiously on merits, without expressing any opinion on the case's merits.