KASHIRAM BHAJAN LAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Indian Income-tax Act (hereinafter referred to as the Act). The statement of the case submitted by the Income-tax Appellate Tribunal (hereinafter called the Tribunal) gives the following facts. The assesses M/s Kashiram Bhajanlal (hereinatter called the assessee) carries on business of cloth and arhat at Farrikhabad and also manufactures utensils. For the assessment years 194546, 1946-47 and 1947-48 the assessee was assessed on income shown as below: <FRM>JUDGEMENT_1_ITR45_1962Html1.htm</FRM>

(2.) DEMAND notices were sent for the tax due from the assessee but the demand not having been satisfied the following orders of penalty were passed under Section 46(1) of the Act on 1-10-1951. <FRM>JUDGEMENT_1_ITR45_1962Html2.htm</FRM>

(3.) IT has already been noticed in an earlier part of this judgment that on 2-11-1951 when the appeals against the orders imposing penalty were filed the tax assessed on the assessee had not been paid, and the question that requires consideration is whether the Appellate Assistant Commissioner and the Tribunal were right in interpreting the proviso to Section 30(1) of the Act so as to mean that the appeals could not be entertained. On behalf of the Department it has been contended that the language of Section 30 is clear and the words "no appeal shall lie" occurring in the proviso to Section 30(1) create a complete bar to the entertainment of the appeals, while on behalf of the assessee it has been contended that those words only bar the hearing of an appeal in the event of the amount of tax remaining unpaid even up to the date of hearing. IT is noteworthy that the words "no appeal shall lie" occur not in main clause of Section 30(1) but in the proviso. Section 30(1) specifically and in clear language confers a right of appeal against an order imposing a penalty. The proviso only qualities that right. The right of appeal has been conferred by Section 56 (1) of the Act and the only effect of the proviso is that we. right which has been so conferred by the main Clause remains ineffective so long as the tax is not paid. IT is well known that the right of appeal is determines by and is dependent upon the nature of the cause and not by or upon the conduct of a party. The ettect of reading the main clause along with the proviso is that though the right of filing an appeal exists and the cause qualifies tor an appeal. the appellant due to his conduct of not paying the tax remains disqualified from enforcing that right. No sooner the disqualification is removed the right becomes enforceaable. The Legislature in the proviso did not use the words "no appeal shall be entertained" but used a much more doubtful expression "no appeal shall lis." If the intention had been not to provide for the entertainment of an appeal if the tax had not been paid the Legislature would have said so in clear language. In the shorter Oxford English Dictionary the word 'lie' has been given the meaning "to be admissible or suatainable." IT is obvious that the word 'lie" is not equivalent to the word "present" or "presented." IT is true that in some cases the expressions "an appeal-lies" or "an appeal shall lie" are used in the sense of an appeal being entertainable but in those cases the context in which those words, are used justify such a conclusion. The words "no appea! shall lie. . . ." used in the proviso have to be interpreted in the context that in the main Clause the right of appeal has been expressly conferred. If in the main Clause the right to file an appeal had also been granted fay laying down that sn appeal shall lie in such and such circumstances, the context may have required, the interpretation that the proviso bars the entertainment of an appeal altogether unless the tax is paid but, when the Legislature deliberately used different expressions in the main Clause and in the proviso, it must be held that the proviso was not intended to have the same meaning as the different expression in the main Clause so as to take away the right of appeal altogether. We must hold that the Legislature intended to confer a right of appeal in every case or imposition of a penalty but qualified that right by saying that it shall not be effective unless the tax is paid, ins fax becomes payable only after the service of a notice under Section 29 of the Act. Section 30 (2) provides that an appeal shall be filed ordinarily within 30 days from the receipt of the notice of demand. Consequently the right of appeal accrues on the date when the notice is received by an assessee and limitation for filing an appeal begins to run from that date. In our opinion if the appeal is filed within the period of limitation, even though the tax has not been paid, there would be no bar to its entertainment and on the date of hearing the Appellate Assistant Commissioner would have to determine whether the appeal is effective and any relief can be given under it by seeing whether the tax has been paid or not by that date. In our opinion the word "lie" can also be used in the sense of 'sustainable' and we read the proviso io the effect that "no appeal shall be sustainable against an order under Sub-section (1) 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 pata by the date on which the appeal is sought to be filed or by the time the limitation for filing the same 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 do not exist in it. We, therefore, 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.