K. RAVEENDRANATHAN NAIR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) By amendment in the Income -tax Act in the year 1998 Sec. 260A was inserted in the Act providing for statutory appeal against the orders passed by the Income Tax Appellate Tribunal. In this very Sec. under Sub -section (2)(b) court fees on such appeals was also prescribed which was fixed at Rs. 2,000/ -. However, sub -section (2)(b) of Sec. 260A prescribing the aforesaid fee was omitted by amendment carried out in the said Act w.e.f. 1.6.1999. It was presumably for the reason that insofar as court fee payable on such appeals are concerned, which are to be filed in the High Court, it is the State Legislature which is competent to legislate in this behalf. In the State of Kerala the law of court fee is governed by the Kerala Court Fees and Suits Valuation Act, 1959 (hereinafter referred to as 'Act, 1959'). Sec. 52 thereof relates to the fee payable in appeals. Thus, with the omission of clause (b) of Sub -section (2) of Sec. 260A in the Income -tax Act, fee became payable on such appeals as per Sec. 52. The State Legislature thereafter amended the aforesaid Act, 1959 by amendment Act of 2003 and inserted Sec. 52A therein which was passed on 6.3.2003. In fact, before that an ordinance was promulgated on 26.10.2002 which was replaced by the aforesaid Amendment Act. The Act categorically provided that Sec. 52A is deemed to have come into force on 26.10.2002. As per the amended provisions viz. Sec. 52A of the Act, 1959, the fee on memorandum of appeals against the order of Income Tax Appellate Tribunal or Wealth Tax Appellate Tribunal is to be paid at the rates specified in sub -item (c) of item (iii) of Article 3 of Schedule II. Sub -item (c) of item (iii) of Article 3 of Schedule II reads as under:

(2.) It is clear from the above that fee is now payable, where such income exceeds two lakh rupees, @ 196 of the 'assessed income' subject to a maximum of ten thousand rupees.

(3.) While the validity of the aforesaid order of the High Court is to be tested, another aspect is highlighted by the High Court in the concluding paras of the judgment. It has noticed that court fee which is payable @ 1% is on the 'assessed income' i.e. income which was assessed by the Adjudicating Officer/Assessing Officer meaning thereby the fee is not to be paid on the amount which is the subject matter of the appeal. In this behalf, the High Court has given the illustration namely where the income is assessed by the Assessing Officer in the sum of Rs. 10 lakhs but the dispute is only in respect of some addition to the tune of Rs. 10,000/ -, as per the aforesaid provisions the court fees have to be calculated on Rs. 10 lakhs which seems to be an absurd situation. Following comments are made by the High Court on the aforesaid aspect: