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TMI Blog2005 (12) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer reported that the assessee has not paid the admitted tax on income before the date of filing of the appeal. The assessee, in appeal memo, the details of payment of tax are shown as follows:- "Yes, no due. Rs. 500 paid under section 140A." The Commissioner of Income-tax (Appeals) has seen from the record that the assessee has filed a return of income as unregistered firm showing an income of Rs. 20,780 and the admitted tax was more than Rs. 500. On these facts a letter was sent to the assessee to state whether it has paid the full amount of admitted tax before filing of the appeal or not. But no response was received from the assessee by the Commissioner of Income-tax (Appeals). Accordingly he has not admitted the appeal as the assessee has not paid the tax due on the return income. The Commissioner of Income-tax (Appeals) has given his finding in para '4' which reads as under:- "The appeal has been filed on 8-5-1989, under section 249(4)(a), no appeal shall be admitted unless at the time of filing of the appeal, the assessee has paid the tax due on the income returned. Up to 31-3-1989, the appellate authority had a discretion to exempt the appellant from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; For Rs. 90 = Rs. 22.50 ---------- ----------- Total Rs. 20,790 = Rs. 697.50 (Rounding of to Rs. 698) 2. Payment made along with return = Rs. 500 Payment made on 3-8-1993 = Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this difference has arisen due to bona fide reasons that whether the surcharge is applicable to the present case or not. She further argued that it is an admitted fact that the assessee before the fling of appeal has paid only a sum of Rs. 700 and remaining Rs. 33 was not paid. But by abundant caution the assessee has further paid a sum of Rs. 200 on 27-2-2000. Further she argued that in this case the return of income was filed on 31-3-1987 and notice under section 143(2) of the Act alongwith questionnaire was issued on or before 30-4-1988. Even in the assessment order it is mentioned that the information was asked vide Income-tax Officer letter dated 13-7-1988 to furnish the details of Creditors. This means that notice under section 143(2) of the Act was issued prior to 1-4-1989, when the amended provision will be made applicable to the filing of appeals. On this aspect she relied on the case law of Hon'ble Apex Court in the case of Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 STC 114. She further relied on the case law of Hon'ble Apex Court in the case of Vijay Prakash D. Mehta v. Collector of Customs [1989] 175 ITR 540 and Hon'ble Kerala High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) has dismissed the assessee's appeal in limine without admitting the same as the admitted tax was not paid by the assessee. From the above argument of the ld. Counsel of the assessee as well as the ld. DR, now the question remains whether the amended provisions of section 249(4) of the Act will apply to the present appeal or the un-amended provisions as they stood before the amendment prior to 1-4-1989 will apply. The Commissioner of Income-tax (Appeals) has held that the assessee is covered by the amended provisions and he argued that if the provisions prior to 1-4-1989 are applicable, the appellant has not filed any application requesting for exemption from the operation of section 249(4)(a) of the Act. Even in the case law cited by ld. Counsel of the assessee of Hon'ble Kerala High Court in the case of Kerala Transport Company cited supra the return of income for the assessment year 1986-87 has been filed prior to 1-4-1989 and notice under section 143(2) of the Act was issued prior to 1-4-1989, it was decided by the Hon'ble Kerala High Court that the appeal against the assessment order for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty Commissioner may for any good and (Appeals) or, as the case sufficient reason to be may be, the Commissioner recorded in writing (Appeals) may be, for any exempt him from the good and sufficient operation of the provi- reason to be recorded in sions of this sub-section. writing, exempt him from the operation of the provisions of that clause.' -------------------------------------------------------- The relevant question to decide the applicability of the provision is the date on which the lis for the dispute arose. In the case at hand, the lis can be stated to have commenced latest by the date when the notice under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted. This position was illuminatingly stated in Kirpa Singh v. Rasalldar Ajaipal Singh AIR 1928 Lah. 627 (FB). A vested right of appeal can be taken away by a subsequent enactment, if it so provides expressly or by necessary implication, as was observed by the Apex Court in Garikapati Veeraya v. N. Subbiah Chowdhry AIR 1957 SC 540. An appeal is a continuation of assessment proceedings. The right of appeal is a substantive right which gets crystallised when assessment proceedings are initiated. The right of appeal is a substantive right conferred on a party by the statute. The conferring of a right of appeal is not circumscribed by the right being available at the time of the institution of the cause in the court of the first instance. The right of appeal in a given case may already be available at the institution of the cause in the court of the first instance or may even be subsequently conferred. In either situation, without any distinction such right is conferred by statute (See Special Military Estates Officer v. Munivenkataramiah AIR 1990 SC 499; 2 SCC 168." 7. As the facts before us are exactly identical to the case law of Hon'ble Kerala High Court referred and cited above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so continues to exist. The argument of Sri Ganapathy Aiyar on this point, therefore, cannot be accepted. The learned Advocate urges that the requirement as to the deposit of the amount of the assessed tax does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure. He contends that this case is quite different from the case of Sardar Ali v. Dalimuddin [1929] ILR 56 Cal. 512 for in this case it is entirely in the power of the appellant to deposit the tax if he chooses to do so whereas it was not within the power of the appellant in that case to secure a certificate from the learned Single Judge who disposed of the second appeal. In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time. Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose v. Mon Mohan Singha [1930] 34 C.W.N. 1009. No cogent argument has been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement "touches" the substantive right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the payment of the assessed tax. As the appellant did not admit that any amount was due by it, it was under the section as it stood previously entitled to file its appeal without depositing any sum of money. We, therefore, allow this appeal and direct that the appeal be admitted by the Commissioner and be decided in accordance with law. The appellant is entitled to the costs of this appeal and we order accordingly." 8. From the above case laws of Hon'ble Apex Court and of Hon'ble Kerala High Court, it may be concluded that though not deciding it, but when an assessee files his return, a "lis" may not immediately arise but it can be presumed that under section 143(1) of the Act, the assessing authority may accept the return as correct and complete. If the authority is not satisfied as to the correctness of the return and selects the case by issuing notice under section 143(2) of the Act and make assessment under section 143(3) then there is every possibility of a controversy arising involving a proposition by the assessee and an opposition by the Department. For the purpose of accrual of the right of appeal the critical and relevant date, is the date of assessment proceedings i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard. Further if the Commissioner of Income-tax (Appeals) admits the appeal then he will decide the issue on merits. Accordingly, this appeal is set aside to the file of the Commissioner of Income-tax (Appeals). In the result, the assessee appeal is allowed for statistical purposes. 10. Now we will take up I.T.A. No. 303/Mds./2000. This appeal pertains to the penalty levied by Assessing Officer and confirmed by Commissioner of Income-tax (Appeals) vide its order dated 15-10-1999. At the outset it is seen that the quantum appeal has been set aside to the file of Commissioner of Income-tax (Appeals) to decide whether the appeal is maintainable or not, in view of the facts and circumstances narrated in that case. This being a penalty appeal, under section 271(1)(c) of the Act for concealment of income, we fairly feel that this should also be set aside to the file of the Assessing Officer and he will decide this penalty after the quantum appeal is decided by the Commissioner of Income-tax (Appeals). The Assessing Officer will give reasonable opportunity of being heard to the assessee before deciding this penalty. In the result this appeal of the assessee is allowed for statistical p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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