[CIT v. Pawan Kumar
Laddha, (2010) 324 ITR 324 (SC)]
At the hearing of the appeal
filed by the assessee before the Income-tax Appellate Tribunal against the order
u/s.158C of the Act, the Revenue raised a preliminary objection as to the
maintainability of the appeal on the ground that the assessee having not paid
the admitted tax before filing the appeal, the appeal preferred by him should be
dismissed as not maintainable. In this connection, reliance was placed by the
Department in support of its preliminary objection on S. 249(4)(a) of the 1961
Act.
After going through to
provisions of S. 249(4)(a) and S. 253(1)(b) of the 1961 Act, which at the
relevant time, dealt with an order passed by the Assessing Officer u/s.158C(c)
of the 1961 Act, the Appellate Tribunal held that one cannot read S. 249(4)(a)
into the provisions of S. 253(1)(b) of the 1961 Act, that while S. 253(1) was an
enabling provision giving right of appeal to the assessee to file an appeal to
the Appellate Tribunal, there was no provision similar to S. 249(4)(a), which
fell in Chapter XX-A in S. 253(1)(b), hence, it was not a condition mandatory to
the filing of the appeal to the Appellate Tribunal to pay undisputed tax amount
as condition precedent. Consequently, according to the Appellate Tribunal, there
was no merit in the contention of the Department that an assessee must pay the
admitted tax due before or at the time of filing of the appeal before the
Appellate Tribunal.
Aggrieved by the decision of
the Appellate Tribunal on the preliminary objection raised by the Department,
the matter was carried in appeal u/s.260A of the 1961 Act by the Department to
the High Court of Madhya Pradesh, Indore Bench, which affirmed the view of the
Appellate Tribunal. Hence, the civil appeals were filed before the Supreme
Court.
The Supreme Court held that
Chapter XX deals with ‘Appeals and revisions’. Chapter XX is divided into
headings ‘A’ to ‘F’ S. 246 enumerates a list of orders of the Assessing Officer
against which appeals would lie. In that list of orders, an appeal to the
Appellate Tribunal u/s.253(1) is not mentioned. This was a very important
indicia to show that each heading in Chapter XX deals with a different subject
matter and one could not read the words in Chapter XX-A into the words used in
Chapter XX-B. Chapter XX-A deals with appeals to the Deputy Commissioner and the
Commissioner of Income-tax (Appeals), whereas Chapter XX-B deals with appeals to
the Appellate Tribunal. Similarly, reference to the High Court lies under
Chapter XX-C. It was for this reason that the Supreme Court came to the
conclusion that each heading was a stand-alone item and, therefore, one could
not read the provisions of S. 249(4)(a) into S. 253(1)(b) of the 1961 Act.
According to the Supreme Court, if the argument of the Department was to be
accepted, then, in that event, no appeal or reference could lie even to the High
Court without complying with the provisions of S. 249(4)(a) of the 1961 Act.
This could not be the scheme of the Chapter XX of the 1961 Act. There was one
more reason why the Supreme Court was of the view that 249(4)(a) could not be
read into S. 253(1)(b) of the 1961 Act. S. 253(1)(b) refers to an assessee
filing an appeal to the Appellate Tribunal against an order passed by an
Assessing Officer u/s.158BC(c) of the 1961 Act, Clause (b) came to be inserted
into S. 253(1) by the Finance Act, 1995, and, that too, with effect from 1st
July, 1995. The very concept of block assessment came to be inserted in the
Income-tax Act, 1961, with effect from 1st July, 1995, whereas the words ‘this
Chapter’ in S. 249(4) came to be inserted in the Income-tax Act, 1961, vide the
Taxation Laws (Amendment) Act, 1975, with effect from 1st October, 1975. This
was one more reason to confine the expression ‘this Chapter’ in S. 249(4) to
Chapter XX-A without it being extended to S. 253(1)(b) which is there in Chapter
XX-B. Further, under the scheme of Chapter XX as stated above, no appeal
u/s.249(4)(a) in Chapter XX-A was admissible without the assessee having paid
the admitted tax due on the income returned by him. It appeared that once S.
249(4)(a) is treated as a mandatory condition for filing an appeal before the
Commissioner of Income-tax (Appeals) and once that condition stood satisfied at
the time of his filing an appeal to the Commissioner of Income-tax (Appeals),
then there was no necessity for the assessee to once again pay the admitted tax
due as a condition precedent to his filing the appeal before the Appellate
Tribunal u/s.253(1)(b) of the 1961 Act. The Supreme Court held that lastly, one
must keep in mind the principle that the doctrine of incorporation cannot be
invoked by implication. A provision which insists on the assessee satisfying a
condition of paying the admitted tax as condition precedent to his filing of
appeal u/s.253(1)(b) of the 1961 Act is a restrictive provision. Such a
restrictive provision must be clearly spelt out by the Legislature while
enacting the statute. The Courts have to be careful in reading into the Act such
restrictive provisions as that would tantamount to judicial legislation which
the Courts must eschew. It is for the Parliament to specifically say that no
appeal shall be filed or admitted or maintainable without the assessee(s) paying
the admitted tax due. That has been done only in the case of an appeal u/s.
249(4)(a) of the 1961 Act. The Supreme Court held that it could not read such a
restrictive provision into S. 253(1)(b) of the 1961 Act. If it did so, it was
judicially legislating by reading something into the Act which was not there.
