Admissibility of appeal: payment before admission satisfies the proviso to Section 30(1), so appeal is competent when taken up.

Construction of the first proviso to Section 30(1) is whether the tax-payment condition refers to admissibility when an appeal "lies" or to mere presentation. The proviso operates on the appeal's admissibility at the time it is taken up for consideration; payment before admission satisfies the condition. A procedural declaration in prescribed Form I does not create a mandatory jurisdictional condition; failure to comply with the form does not by itself render an appeal incompetent. Applying these principles, the appeal was competent when it was admitted because the tax had been paid by that date.

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Issues: Whether the appeal preferred on 5-2-1951 by the assessee against the penalty imposed under Section 46(1) of the Income-tax Act was competent.

Analysis: The question turns on the construction of the first proviso to Section 30(1) of the Income-tax Act. The proviso bars appeals that do not "lie" unless the tax has been paid. The Court distinguished between presentation of an appeal and its admission, noting that Section 30(2) recognises the separate concept of presentation within time. The language of the proviso refers to an appeal "lying" (i.e., being admissible or sustainable) rather than to mere presentation. Authorities on similar statutory language support interpreting "lie" as referring to admissibility at the time the appeal is taken up for consideration. The prescribed Form I under Rule 21, containing a declaration that the tax has been paid, is not a mandatory statutory condition that affects the legal competence of an appeal; non-compliance with that form provision does not itself render an appeal incompetent.

Conclusion: The appeal was competent on 24-4-1952 when it was taken up for admission because by that date the tax as finally assessed had been paid; the Appellate Assistant Commissioner was wrong in holding the appeal incompetent. The question referred is answered in favour of the assessee.

Ratio Decidendi: For the proviso to Section 30(1) of the Income-tax Act the condition that tax must be paid refers to the admissibility of the appeal when it is taken up (i.e., when it "lies"), and not to the mere presentation of the appeal; therefore payment before admission satisfies the proviso.

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