TaxTMI 
TaxTMI 
2005 (4) TMI 274
X X X X Extracts X X X X
X X X X Extracts X X X X
....has to be made at Rs. 1,70,700, which is after appeal effect whereas the registry is seeking the appellant to pay fee on the valuation at Rs. 4,04,170, which is as per original assessment order of Assessing Officer under section 143(3). He has contended that the fee is to be computed as per section 253(6). In the W/S of assessee it has also been contended that the expression "total income as computed by Assessing Officer" also includes the effect of learned CIT(A)'s appellate order as after first appeal the original assessment order merges with appellate order of learned CIT(A) and again it is the Assessing Officer who has finally to make the computation under section 143(3)/250 of the Act. It has also been contended that it is the Assessing Officer who serves the demand notice under section 156 pursuant to the total income computed by him or as per order of CIT(A). It has also been contended that logically also it does not stand to reason as to why an appellant should be asked to pay fee for that part of the order against which the appellant is not in appeal before the Tribunal. As against this the learned D.R. of revenue has contended that the fee is to be charged as per the comp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n income of Rs. 5 lakhs, for the reason of that being the total income computed by Assessing Officer after giving appeal effect. 4. In this context it may be of some benefit to recall that what is required to be paid by the appellant under section 253(6) is "fee" and not tax; and fee, by its very nature, is relatable to the benefit/facility/relief being claimed by the payer. If an assessee had grievance against an assessment order on ten counts but he has been allowed relief on nine out of those ten counts by the first appellate authority and the assessee intends to prefer second appeal before the Tribunal, then it makes out no sense to compel him to pay fee in respect of all the ten counts (involved in the first/original order of Assessing Officer) despite the fact that he is neither agitating those nine counts in 2nd appeal, nor is Tribunal going to consider/decide them. An otherwise interpretation may, in our humble opinion, seem to be violating the very principles of natural justice. 5. We may, for our benefit sake, in this regard, also analyze with careful consciousness the language of the statutory provision in the context of levy of appeal-fee. Section 253(6) uses the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....otal income to be modified in accordance therewith, but such a grievance, in our view, is too feeble to be sustained. It may hardly be deniable that normally each and every appellate order/revisional order has to be given effect to, and this process of giving appeal effect does, in no abnormal way, result in the working out of the modified total income. The process of rendering justice, by allowing the preferment of appeal on payment of fee on the basis of total income as it stands computed by Assessing Officer after giving appeal effect, need not be obstacled by an otherwise interpretation which tends to stifling rather than redressing, also for the reason that an interpretation favourable to assessee may be preferred when there are two reasonably conceivable interpretations. 8. In that view of the matter considering all the facts and circumstances of the case, as also the redressal aspect of justice involved, we agree with the contentions of the learned AR of assessee that the fee for filing appeal before Tribunal should be chargeable on the total income computed by Assessing Officer after giving effect to the impugned appellate order of first Appellate Authority; and this wil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(b) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than one hundred thousand rupees but not more than two hundred thousand rupees, one thousand five hundred rupees, (c) where the total income of the assessee, computed as aforesaid, in case to which the appeal relates is more than two hundred thousand rupees, one per cent of the assessed income, subject to a maximum of ten thousand rupees, (d) where the subject-matter of an appeal relates to any matter, other than those specified in clauses (a), (b) and (c), five hundred rupees Provided that no such fee shall be payable in the case of an appeal referred to in sub-section (2) or a memorandum of cross-objections referred to in sub-section (4)." Clause (a) of sub-section (6) of section 253 clearly states that the total income of the assessee in the case to which the appeal relates is to be taken as the basis for determination of the income on which the fee is payable for filing the appeal before the ITAT. 3. This view is further strengthened from the perusal of Form No. 36 prescribed under Rule 47(1) of the I.T. Rules, 1962 for filing appeal before the ITAT.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bunal is relevant. Any modification or alteration in the income consequent to the appellate order would not be relevant. The contention of the assessee is that the order giving effect to appellate order is also an order of assessment. It is true that the order giving effect to the order of the first Appellate Authority is also an order of assessment, but the income determined in that order might not be the income computed by the Assessing Officer as the Assessing Officer might just be giving effect to the appellate order and there might not be applicable of his mind; he would be doing a ministerial work. Again, the computation of total income by the Assessing Officer must be in the case which is in appeal before the Tribunal. When the original assessment is made subject-matter of appeal before the Tribunal, it is the income that is computed in that order which is relevant and not the income as modified, revised or computed in subsequent proceedings. Furthermore, if the assessee's contention is accepted then why stop at that order giving effect to the appellate order it should be every subsequent order including an order giving effect to the order of the Tribunal, the CIT under sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 253(6) of the Income-tax Act, 1961. On hearing both the parties, the Members of the Division Bench deferred on interpretation of section 253(6). Whereas the Ld. Judicial Member has expressed the view that the fee payable under section 253(6) is to be calculated with reference to the assessed income as modified by the CIT(A), on the other hand, the Ld. Accountant Member has expressed the view that the appeal fee payable under section 253(6) is relatable to the income as assessed by the Assessing Officer and the modification as a result of appellate order is not to be taken into consideration. The Ld. Accountant Member has relied upon the decision of the Hyderabad Bench of the Tribunal in the case of Andhra Pradesh State Electricity Board to support his view. 2. As a result of the difference of opinion amongst the Members of the Division Bench, the Hon'ble President has nominated me as Third Member for a decision on the following point of difference: "Whether on the facts and in the circumstances of the case, the fee payable for filing of appeal before Tribunal as per section 253(6) of the Income-tax Act, 1961 should be calculated on the basis of the amount of total inco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....section (1) or sub-section (2) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof, within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3). (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. (6) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made, on or after the 1st day of October, 1998, irrespective of the date of initiation of the assessment proceedings relating thereto, be accompanied by a fee of,- (a) where the total income of the assessee as compute....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aised before the Commissioner (Appeals) by the appellant." 6. Reference may also be made to section 156 of the Act, which requires the Assessing Officer to issue a notice of demand to recover any sum due under the Act. The Hon'ble Supreme Court in the case of Dwarka Nath v. ITO [1965] 57 ITR 349, has laid down that the Assessing Officer is required to serve on the assessee a notice of demand in the prescribed form if any amount is due from the assessee in consequence of any order passed under the Income-tax Act. In order to complete the relevant provisions of the Act, I consider it appropriate to refer to some other provisions of the Act. "254. Orders of Appellate Tribunal- (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (2) the Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer: Provided that an amendment which as t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed: Provided that a person referred to in clause (b), who is not required to furnish a return under this sub-section and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who at any time during the previous year fulfils any one of the following conditions, namely:- (i) is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified by the Board in this behalf; or (ii) is the owner or the lessee of a motor vehicle other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or (iii) is a subscriber to a cellular telephone not being a wireless in local loop telephone; or (iv) has incurred expenditure for himself or any other person on travel to any foreign country;....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l returns of income received by him on or before the due date, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and manner as may be specified in that scheme, and in such case, any employee who has filed a return of his income to his employer shall be deemed to have furnished a return of income under sub-section (1), and the provisions of this Act shall apply accordingly. (1B) Without prejudice to the provisions of sub-section (1), any person, being a company or being a person other than a company, required to furnish a return of income under sub-section (1), may, at his option, on or before the due date, furnish a return of his income for any previous year in accordance with such scheme as may be specified by the Board in this behalf by notification in the Official Gazette and subject to such conditions as may be specified therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified in that scheme, and in such case, the return of income furnished under such scheme shall be deemed to be a return furnished under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....use (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, by such scientific research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place; and (ii) the approval granted to such scientific research association or other association or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded." 8. The contentions advanced on behalf of parties are to be considered in the light of the aforementioned provisions of the Act. As is evident from section 143(3) the Assessing Officer is empowered to make an assessment and assess the income of the assessee. If the assessee accepts the assessment, the order of the Assessing Officer becomes final subject to any interference from the CIT(A) under section 263. However, if the assessment made by the Assessing Officer is not accepted by the assessee, the statute ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e appeal relates to is more than ject to the max. of Rs. 2,00,000 Rs. 1,000 (d) Where subject-matter of appeal relates Rs. 500 to any other matter (e) Stay application under Rule 35A Rs. 500 (f) Rectification application under section Rs. 50 254(2) (g) On appeal by the Revenue and Cross &....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is computed in that order which is relevant and not the income as modified, revised or computed in subsequent proceedings. Further more, if the assessee's contention is accepted then why stop at that order giving effect to the appellate order. It should be subsequent order including an order giving effect to the order of the Tribunal. The CIT under section 263 or section 264, a re-assessment order under section 147, a rectification order under section 154/155 and so on. It would then be very difficult rather impossible and impracticable to give effect to the provision. Such an interpretation with absurd results has to be avoided. It is, therefore, held that the total income which was computed in the orders of the Assessing Officer which are subject-matter of appeal before the Tribunal is relevant and if in those orders the assessed income is more than Rs. 1 lakh, a fee of Rs. 1,500 has to be paid for filing the appeal before the Tribunal." 11. Whereas it may be fairly stated that the view expressed by the Ld. Judicial Member is a possible view, if one were to go behind the plain language of the section, yet, in this case, it is observed that there is a decision of the Hyderabad ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of U.O.I. v. Paras Laminates (P.) Ltd. [1990] 186 ITR 722, have also expressed the same view. In the case of 253 ITR 99 (SC)(sic) their Lordships held as under: "Judicial discipline and propriety demands that a Bench of two judges should follow a decision of a Bench of three judges. But if a Bench of two judges concluded that an earlier judgment of three judges is so very incorrect that in no circumstances can it be followed, the proper course for it to adopt is to refer the matter before it to a Bench of three judges setting out, as has been done here, the reasons why ii could not agree with the earlier judgment. If, then the Bench of three judges also comes to the conclusion that the earlier judgment of a Bench of three judges is incorrect, reference to a Bench of five judges is justified". 14. The Hon'ble Members of the Bench have not expressed the desire to refer the matter to the Hon'le President for constitution of Special Bench, hi view of these circumstances, the decision of the Hyderabad Bench of the Tribunal is bound to be followed. 15. Apart from the aforesaid position of law, I am also of the considered view that the Legislature has fixed the appeal fee payab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be gathered on a reasonable interpretation of the language employed by the Legislature." 16. It is also an accepted Principle of Interpretation that the Legislature does not use any words in the Statute, which are superfluous. The Legislature, having consciously used the words "as computed by the Assessing Officer", these words cannot be ignored in arriving at a reasonable interpretation of section 253(6). It is also pertinent to mention that if an order is passed by the CIT(A) reducing the assessed income of the assessee, the Revenue has a right of appeal against such a reduction allowed by the CIT(A). It may so happen that the Tribunal reverses the order of the CIT(A) in having deleted the addition. In that case the assessed income on the basis of the decision of the Tribunal would be more than the income as modified by the CIT(A) and if the assessee had also appealed against any of the addition sustained by the CIT(A), he would be required to pay the fees on the basis of income assessed by the Assessing Officer if the interpretation given by the Ld. Accountant Member is accepted. However, in case the interpretation put by the ld. Judicial Member is accepted, the assessee woul....