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TMI Blog2001 (4) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... s of this petition prays for stay on the recovery by the Department. 2. The Departmental Representative [DR for short] Mr. Narayanan raised a preliminary objection to the stay petition and this was that the provision contained in section 249(4) of the Act required the payment of admitted tax on the income returned failing which the appellate authority could not admit the appeal. He contended that when the appeal itself is not maintainable and could not be admitted, all proceedings before the Tribunal would be infructuous. He insisted that the Tribunal should dispose of this issue of admissibility of appeal by means of a separate order. Considering the proposition that the appeal if could not be admitted both the stay petition and the appeal would have to be dismissed, we permitted the DR to make his submissions with reference to this issue. The counsel for the appellant had placed his written arguments. 3. DR referred to the provisions of section 249 of the Act and submitted that the section starts with the words 'every appeal under this chapter' and sub-section (4) of section 249 of the Act states 'no appeal shall be admitted unless at the time of filing of an appeal the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een placed under chapter XX of the Act and the use of the words 'under this chapter' has to be construed as governing thge entire chapter and it not limited to the appeal filed before the CIT(A) or DCIT(A). He pleaded that the consideration of payment of tax is related to the returned income and consequent to this returned income is converted to assessed income and demand of tax is raised from which appeal is preferred by the assessee, it is the first appeal. The Tribunal is the first appellate authority. He contended that when the provisions are read in sequence and the words 'under this chapter' covering the entire chapter, it leaves no doubt at all that the provision of section 249(4) of the Act governs all appeals arising from the order of an assessment and by this proposition the appeal to the Tribunal from an assessment of undisclosed income could be admitted on the fulfilment of the condition of payment of tax on the returned undisclosed income. He pleaded that the Tribunal would be ridiculing the provisions by holding that the assessee who files an appeal disrespecting the provisions by holding that the assessee who files an appeal disrespecting the provisions that requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and to the case laws as are relied upon by the parties. At the outset we may observe that the DR either innocently or deliberately did not even make a reference to the basis or the background to the enactment of section 249(4) of the Act. If only this had been referred to, the preliminary objection as raised and as vehemently insisted upon may not have been taken up at all. Section 249(4) of the Act underwent an amendment by the Taxation Laws (Amendment) Bill, 1973 that was introduced in the Parliament on 9-5-1973. The bill as was placed in February 1973 the views of the Review Committee was called for and the bill was presented to the Parliament in May 1993 after obtaining the report of the review committee. The Bill as was presented to the Parliament in May 1993. The amendment proposed to sub-sections (2) and (4) to section 249 of the Act is given in clause 60 of the bill. The notes on clauses contain the background information that led to the proposed amendment to the Act and the notes on clauses contain the notes for clause 60 of the bill and this is contained at pages 116 and 117 of the report as mentioned earlier. The amendment of the sub-sections are not brought here b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax on the returned undisclosed income as is required by section 249(4) of the Act is an unacceptable proposition as it goes against the very intention of the Legislature. What the lawmakers never intended could not be assumed by any party more especially by the Department because, its functions are limited to the application of the Act as was stated by the lawmakers. DR or the Department could not rewrite the law to suit it because it finds that there is lack of equity as is in the instant case of non payment of tax on returned undisclosed income before filing of appeal. Likewiswe no Tribunal or the Court who are required to apply the enacted law could not take the role of lawmakers because they find that the assessee who does not pay or refuses to pay the admitted tax on returned undisclosed income would be tolerated. They have no choice in the matter but to admit the appeal without the payment of tax on the returned undisclosed income because, the Act does not place any restriction for admission of an appeal by the Tribunal or the Court. Much argument was placed by DR on the use of the term 'under this chapter' because the appeals before CIT(A) and Tribunal are placed under C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period'. Part 'A' contains an identical provision that reads 'The Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period.' The intention of the lawmaker is therefore clear that they wanted each appeal procedure to be comprehensive and complete and thus, placed them in separate compartments or groups and called them 'A', 'B' and so on under Chapter XX. One other example would clarify further the intention of the lawmaker that each part is complete by itself and this is with reference to section 265 of the Act. This states 'Notwithstanding that a reference has been made to the High Court or the Supreme Court or an appeal has been preferred to the Supreme Court, tax shall be payable in accordance with the assessment made in the case.' In CITv. Bansi Dhar Sons [1986] 157 ITR 665 the Supreme Court was considering a q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom hold a lower position in hierarchy of the Department and accordingly introduced an amendment in section 246 of the Act and the orders were made appealable to CIT(A). The provisions of section 249(4) were in the Act when Chapter XIV-B was added and part of the Act. The lawmakers perhaps considering that Chapter XIV-B talked of income that was not disclosed by an assessee did not feel the necessity to introduce provision similar to the one as in section 249(4) of the Act. The lawmaker had placed stages of appeal in individual parts and there is no indication made by them that any portion of the enactment of any part is to extend to or govern another part containing appeal procedures. Going by the proposition advanced by the DR it would mean that the Tribunal would have to hold that the provision of section 265 that is still retained in the Act is redundant. If the lawmaker had intended that the provision of section 249(4) was to apply to all appeals that arise from the order of assessment, and that with effect from 1-10-1998 the appeal being provided from the orders of the Tribunal to the High Court, it was totally unnecessary to retain section 265 as it is. Therefore, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditional on payment of admitted tax on returned income is placed on DC(A). We had observed earlier that Tribunal as a creature of law must apply the law as it stands and has no power to rewrite the law and could never take over the role of lawmaker. Therefore, the restriction of admitting of an appeal subject to payment of tax being limited to appeal filed before DC(A) and so clearly specified by the Legislature, it is not open to the Department to contend otherwise because, it would mean asking the Tribunal to write the law for which the Tribunal is not created. The assessee had stated in its stay petition that authorities under several statutes had attached all his properties in connection with various proceedings. Considering the gravity of the situation and the proceedings under various enactments, we are of the opinion that this is not a fit case for granting of stay of demand. Even granting of early hearing to this appeal may not be fruitful to resolve the issue because almost all the items are related to Enforcement Directorate, corruption and other offences and proceeding are stated as pending before Civil and Criminal Courts. The assessment is based with reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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