COMMISSIONER OF INCOME TAX Vs. FILMISTAN LTD

JUDGEMENT

(1.) THE question that falls for determination on this reference is whether the first proviso to Sub-section (1) of Section 30, which confers a right of appeal to the A. A. C. against certain orders, enacts a condition precedent to the presentation of the appeal or to the exercise of the right of appeal at all; or whether, in the alternative, it does not affect the right of appeal, but it affects merely the hearing and final disposal of the appeal.

(2.) THE relevant facts are that for the assessment year 1949-50 a notice of demand under Section 29 was made for the payment of Rs. 1,80,646/. 14/- as income-tax and super-tax. The amount-was payable ,on 17-7-1954; but at the request of the assesses instalments were allowed and the last instalment of Rs. 30,646/14/- was made payable on or before 20-3-1955. There was default in payment of the last instalment and the Income-tax Officer, acting under Section 46 (1), imposed a penalty of Rs. 3,000/- on 31-3-1955. The asses-see preferred an appeal to the Appellate Assistant Commissioner on 20-4-3955. The amount of the last instalment was paid on 16-5-1955. The appeal came up for hearing before ffie Appellate Assistant Commissioner on 19-8-1955, when the I. T. O. raised a preliminary objection that the appeal was not competent because prior to the presentation of the appeal the tax had not been paid. This objection was upheld by the A. A. C. , but upon appeal the Tribunal held that upon a true construction of Section 30 Sub-section (1) and the first proviso thereto, the right of appeal was not taken away, but only the remedy was barred until tax was paid. It is this view of the Tribunal which has been challenged before us on this appeal.

(3.) NOW, turning to the relevant section, Section 80 Sub-section (1) provides that any assessee may appeal to the Appellate Assistant Commissioner against the orders enumerated in that Sub-section. The first proviso to this Sub-section is: