COMMISSIONER OF INCOME TAX Vs. GARWARE NYLONS LIMITED

JUDGEMENT

(1.) BY this reference made under S. 256(1) of the IT Act, 1961 ("the Act"), the following question of law has been referred to this Court for opinion at the instance of the Revenue :

(2.) THE controversy in this case is in a very narrow compass. The assessee is a limited company. The assessment year involved is 1978 79. The assessee had declared dividend to the tune of Rs. 64,80,000 and its claim for relief under S. 80J amounted to Rs. 23,26,917. The assessee made an application to the ITO under Sub S. (3) of S. 197 of the Act to determine the proportion of the dividend to be deducted under the provisions of S. 80K as 35.94% of the dividend. The ITO, however, by certificate issued under S. 197(3) of the Act restricted the same to 20% as in his opinion 20% of the dividend alone could be deemed to be representing profits exempt under the provisions of S. 80J of the Act. It was observed by the ITO in the above certificate that it was issued provisionally and was subject to change on final determination at the time of regular assessment.

(3.) IT is well settled by now that the right of appeal is not an inherent right. It cannot be claimed as a matter of right. It is a statutory right. It is open to the legislature to give or not to give a right of appeal against decisions made by the authorities under the Act. No appeal would therefore lie unless it is provided by the statute. It is therefore necessary to peruse the statutory provision conferring the right of appeal.