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TMI Blog2001 (10) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... he undisclosed income. The assessee, however, indicated in his return that Rs.1.8 lakhs seized during the search is to be considered as has been paid on account of tax on the undisclosed income. The income disclosed by the assessee, however, was not accepted by the Assessing Officer as no details were given by the assessee regarding the undisclosed income pertaining to the block period. The Assessing Officer after going through the seized material determined the undisclosed income for the block period at Rs.33,57,283. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the CIT(A) challenging the various additions made by the Assessing Officer. 3. The learned CIT(A), in his order has observed that the assessee filed the return of income in respect of block period 1-4-1987 to 8-12-1997 showing undisclosed income of Rs.10 lakhs on 27-11-1998 which was found to be beyond 16 days or service of notice and thus attracted 158BFA interest for a period of one month. The learned CIT(A) has also observed that the assessee was required to pay total tax of Rs.6,12,000 by way of self-assessment tax including 158BFA interest which was not paid at the time of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CIT(A) has further stated that even if the payment of Rs.4 lakhs is to be considered as payment towards the tax liability of block assessment, still, there is shortf all. The learned CIT(A) has also stated that the case of Mst. Kattiji relates to the delay in filing of the appeal and not regarding non-payment of admitted tax liability. Similarly, the case of N.L. Mehta pertains to a period when there was a provision for condonation of such lapses. Thus, the learned CIT(A) held that the appeal filed by the assessee was not maintainable under the provisions of section 249(4) of the Act and thus, the same becomes infructuous. The CIT(A), thus, dismissed the appeal filed by the assessee. 4. At the time of hearing the learned counsel for the assessee referred to the provisions of section 30 of the Income-tax Act, 1922 which reads as follows: "Provided that no appeal shall lie against an order under sub-section (1) of section 46 unless the tax has been paid." and section 249(4) of the Income-tax Act, 1961 reads as under: "Where a return has been filed by the assessee the assessee has paid the tax due on the income returned by him". and contended that the words issued in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew or the other, but only says the expression 'lie' may be an expression of doubtful meaning. We have, in any event here a case where two High Courts have taken two contrary views of the provisions of a statute and it would be reasonable, in any event, to say that the true meaning of the words 'shall lie' in the proviso is not beyond doubt and were it not beyond doubt we ought to put on the proviso a construction which will favour the assessee and which would not deprive him of the right of appeal together, because such a construction would be in consonance with right and justice rather than the construction which would deprive him of that right altogether." 5. The learned counsel further referred to the case of Kamdar Bros. of Jharia v. CIT [1955] 27 ITR 176 (Pat.) wherein the High Court held that the proviso does not state "no appeal shall be presented against an order under sub-section (1) of section 46 unless the tax has been paid". There is a distinction between the presentation of an appeal and the admission of an appeal and this distinction has been expressly recognised by the Legislature in the language of section 30 of the Act. Section 30(2) states "the appeal shall ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 46 unless the tax has been paid. The expression 'unless the tax has been paid' clearly shows that the right to file the appeal is there, but the appeal becomes effective only after the tax has been paid. The proviso does not say that 'no appeal shall lie....' unless the tax is paid on the date on which the appeal is sought to be filed or by the time of limitation for filing the appeal has expired." In other words, the proviso is silent on the point by which time the tax shall be deposited in order to make the appeal "lie". A proviso must be strictly construed and its scope cannot be widened by adding some words to it which does not exist in it. We have, therefore, to conclude that even if the tax is paid till the appeal is actually heard on the date of hearing, the appeal would be competent and relief can be given on its basis. 8. The learned counsel further invited our attention to the Orissa High Court decision in the case of CITv. Kalipada Ghose [1987] 167 ITR 173 wherein the High Court has laid down that "section 249(4) lays down condition that unless the admitted tax in a case where return has been filed by the assessee or advance-tax in case where no return ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Their Lordships further held that the question then have to be decided whether there was sufficient cause for condonation of delay or not. Even for this, the principal of sufficient reason has to be applied before the appeal could be admitted for its decision on merits. On the same set of facts whatever has been held to be good and sufficient reason for admission of appeal under proviso of section 249(4) of the Act would also constitute sufficient reason for admission of appeal under section 249(3) of the Act. Thus, on both the accounts, we are of the considered view that the appeal should have been admitted and decided on merits." Thus, the learned counsel contended that the assessee was having a reasonable cause for filing the appeal belatedly, i.e. in the present case, the only delay was of 4 days. The learned counsel argued that the assessee's case is squarely covered with the decision of the Delhi Bench of the Tribunal discussed above. 10. The learned counsel also made reference to the decision of the Kerala High Court in the case of Vanaja Textiles Ltd. v. CIT [2001] 249 ITR 374 wherein the High Court laid down that "section 292B of the Income-tax Act, 1961 provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder would "lie" under sub-section (1) of section 46 unless the tax has been paid. He further invited our attention to sub-clause (2) of Third Proviso of the above section wherein it has been clearly mentioned that "but the Appellate Assistant Commissioner may admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within that period." Therefore, he argued that under the provisions of section 46 of the Income-tax Act, 1922 there was a discretion with the Appellate Assistant Commissioner to admit an appeal if he was satisfied that the assessee was having sufficient cause for not making the payment of taxes before filing the appeal, but, under the present section 249(4)(a) of the Income-tax Act, 1961, there is no such discretion available to the Commissioner of Income-tax (Appeals). It is mandatory on the part of the assessee to make the payment of taxes as per returned income before filing the appeal. Otherwise, the appeal filed would be treated as invalid appeal. 14. The learned departmental representative thus pointed out that the Supreme Court decision in the case of Filmistan Ltd. relied upon by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have carefully considered the submissions made by the rival parties. We have also gone through the various documents filed before us. The main issue for consideration in this case is regarding the maintainability of the appeal filed by the assessee before the CIT(A). The CIT(A) has dismissed the appeal on the ground that the same is not maintainable under the provisions of section 249(4)(a) of the Income-tax Act, 1961. In this case, the return of income was filed on 27-11-1998. However, self-assessment tax of Rs.10 lakhs was not paid thereon. The appeal against the order of the Assessing Officer was to be filed latest by 27-3-2000 but the same was filed on 24-3-2000 the tax payable on the returned income of Rs.10 lakhs was Rs.6 lakhs. The assessee made the request that the amount seized during the course of action under section 132 of Rs.1,80,000 be adjusted against the tax payable on the returned income. There was also a refund due of Rs.27,830 pertaining to the assessment year 1998-99 on 2-12-1999. The assessee paid the amount of Rs.5 lakhs before 31-3-2000. Thus, the assessee paid the tax as follows: I. Cash seized during the raid Rs. 1,80,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced before the CIT(A) an evidence that he was prevented by some good and sufficient reasons for not making the payment on the returned income before filing the appeal. But such discretion had not been conferred on the CIT(A) after the amendment. Therefore, the appeal of the assessee would not be maintainable if tax has not been paid on the returned income before filing the appeal. The amendment has been brought on the statute book with some specific purpose of discouraging the assessee from withholding tax due even on the returned income by filing an appeal before the concerned authority and to get the benefit on the basis of good and sufficient reasons for not making the payment on the returned income before filing the appeal. The object behind the amendment was to encourage the tax compliance. The very purpose of the amendment to this section would be deteated if appeals are admitted even without making the payment of tax on the returned income on the basis of good and sufficient reasons for not making the payment. Therefore, these provisions must be interpreted in consonance with the aim and objects of the Legislature in enacting the provisions for furthering the objects and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plain meaning is. In case of doubt, therefore, it is always safe to have an eye on the object and purpose of the statute or reason and spirit behind it. In the present case, the words used by the Legislature in section 249(4)(a) bear a plain meaning ie. before filing the appeal tax must be paid on the returned income otherwise appeal is not maintainable. Even if there is any doubt, we have to look into the object and purpose of the statute and the reason and the purpose behind it. Prior to the amendment, the assessees were not making the payments of taxes even on their returned income and their appeals were admitted just on the basis that the assessees were having good and sufficient reasons not to make the payment even on the returned income before filing the appeal. The amendment to section 249(4)(a) was brought on the statute to meet with this situation and to force such tax evaders to make the payment at least on the basis of their returned income before filing the appeal. So the provisions of section 249(4)(a) have to be construed in the light of general purpose and object of the statute. Now, if the appeal is admitted without the payment of taxes on the returned income, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m v. CIT AIR 1977 SC 1802, expressing the principle in the following words:-- "In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." The courts have also held that the proper course of construing revenue Acts is to give a fair and reasonable construction to their language without leaning to one side or the other but keeping in mind that no tax can be imposed without words clearly showing an intention to lay the burden and that equitable construction of the words is not permissible. Consideration of hardship, injustice or anomalies do not play any useful role in construing taxing statutes unless there be some real ambiguity. It has also been said that if taxing provision is "so wanting in clarity that no meaning is reasonably clear, the courts will be unable to regard it as of any effect." The Supreme Court in the case of A V Fernandez v. State of Kerala AIR 1957 SC 657 has enunciated the principle of interpretation of taxing laws in the language of Bhagwati J, as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Courts are not entitled to fill in any lacuna in any Act much less in a Taxing Act, but the courts will also not stretch a point in favour of the taxpayer to enable him to get by his astuteness the benefit which other taxpayer do not obtain. 20. In the present case, the provisions of section 249(4)(a) are mandatory and the intention of the Legislature is also very clear to enforce the payment of taxes before filing the appeal as per the returned income. There is no ambiguity in the language of the said section and the same is also not open to two interpretations. The intention of the Legislature to recover the tax on the returned income before filing the appeal to the CIT(A) is clearly expressed in the language of section. Therefore, the same is not open to speculate as what would be the fairest and most equitable mode of collecting the tax. Therefore, as we have mentioned above, the object of the Legislature has to be kept in view and a construction consistent with the object has to be placed on the words used if there is any ambiguity; but in the present case, there is no ambiguity in the language of the section and it is capable only to one interpretation that the tax must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent section 249(4)(a) of the I.T. Act, 1961. Similarly, the Bombay High Court decision in the case of Filmistan Ltd. is not relevant to the facts of the present case. The Patna High Court decision in the case of Kamdar Bros. of Jharia is also not relevant to the facts of the present case as the same is also based on the provisions of section 30 of the Indian Income-tax Act, 1922 which we have already discussed in the foregoing paragraphs. Similarly, in the case of Mussummat Durga Chowdhrari is not relevant as the same is also based on the interpretation of the first proviso of section 30(1) of the Indian Income-tax Act, 1922. The case of Kashiram Bhajan Lal is also based on the provisions of section 30 of the Income-tax Act, 1922 which empowers the Appellate Assistant Commissioner to admit the appeal even after the expiration of the period if he is satisfied that the assessee had sufficient cause for not presenting it within that period. There is no such discretion left with the CIT(A) under the amended provisions of section 249(4)(a) of the Act. The facts of the case of Kalipada Ghose are not relevant to the facts of the present case. The above case has been decided prior to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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