1. This appeal of the assessee has been directed against the order of the CIT(A)-XVI, Mumbai, dt. 7th March, 2001. for the block period 1st April, 1987 to 8th Dec., 1997). The main issue for consideration in this case is regarding the application of the provisions of Section 249(4) of the IT Act.
2. The assessee is an individual sharebroker. In this case the search under Section 132 of the IT Act, 1961 was conducted in the office and residential premises of the assessee on 8th Dec., 1997. In response to the notice under Section 158BC which was issued on 28th Oct., 1998, the assessee. filed return of income on 27th Nov., 1998. The return filed was not in time as has been stated by the AO in his order. The assessee declared total undisclosed income at Rs. 10 lakhs. This undisclosed income has been declared for the whole block period, i.e., 1st April, 1987, to 8th Dec., 1997. The assessee did not pay any tax on the undisclosed income. The assessee, however, indicated in his return that Rs. 1.8 lakhs seized during the search is to be considered as has been paid on account of tax on the undisclosed income. The income disclosed by the assessee, however, was not accepted by the AO as no details were given by the assessee regarding the undisclosed income pertaining to the block period. The AO after going through the seized material determined the undisclosed income for the block period at Rs. 33,57,283. Aggrieved by the order of the AO, the assessee preferred appeal before the CIT(A) challenging the various additions made by the AO.3. The learned CIT(A), in his order has observed that the assessee filed the return of income in respect of block period 1st April, 1987, to 8th Dec., 1997, showing undisclosed income of Rs. 10 lakhs on 27th Nov., 1998, which was found to be beyond 16 days or service of notice and thus attracted 158BFA interest for a period of one month. The learned CIT(A) has also observed that the assessee was required to pay total tax of Rs. 6,12,000 by way of self-assessment tax including Section 158BFA interest which was not paid at the time of filing the return of income nor before filing the present appeal before him. Thus, the learned CIT(A) asked the assessee to explain how the present appeal was maintainable in view of the provisions of Section 249(4) of the Act. It was explained by the assessee that at the time of raid, a sum of Rs. 1,80,000 was seized which was requested by way of note in the return of income to be adjusted against the tax on returned income. The assessee also explained that the appeal was to be filed on 26th March, 2000, which was actually filed on 24th March, 2000, without paying the remaining amount because of lack of liquidity and also because of mistake of accountant, who was asked to pay an amount of Rs. 4 lakhs towards the tax demand of block assessment, but, he inadvertently paid such amount as advance-tax for the asst. yr. 2000-01 on 15th March, 2000. Therefore, the assessee arranged some further funds and paid an amount of Rs. 5 lakhs on 31st March, 2000 which is just 7 days after the date on which appeal has been filed. The assessee relied on the case of Collector Land Acquisition v. Mst Katiji and Ors. (1987) 167 ITR 471 (SC) wherein it has been observed that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. Thus, the assessee pleaded before the learned CIT(A) that the present appeal be deemed to have been filed on 31st March, 2000 and the delay in filing the appeal be condoned in view of lack of liquidity. The assessee referred to the case of Mumbai Benches of the Tribunal in the case of N.L. Mehta v.Asstt. CIT (IT Appeal No. 8710/Bom/1990) where it has been held that in a case where tax has been paid after filing of the appeal, the appeal can be deemed to have been filed late and the CIT(A) should decide whether the assessee has a reasonable cause for the delay in filing the appeal. The learned CIT(A), however, observed that so far as the payment of Rs. 4 lakhs is concerned, the same cannot be said to have been paid towards the block assessment liability. According to him, the assessee did not produce any evidence to support the contention that the above amount was paid towards the liability of block assessment and not for the last instalment of advance-tax in view of the fact that the date of payment of advance-tax coincided with the date of payment of tax liability towards block assessment. The learned CIT(A) has further stated that even if the payment of Rs. 4 lakhs is to be considered as payment towards the tax liability of block assessment, still, there is shortfall. The learned CIT(A) has also stated that the case of Mst.
Kattiji (supra) relates to the delay in filing of the appeal and not regarding non-payment of admitted tax liability. Similarly, the case of N.L. Mehta (supra) pertains to a period when there was a provision for condonation of such lapses. Thus, the learned CIT(A) held that the appeal filed by the assessee was not maintainable under the provisions of Section 249(4) of the Act and thus, the same becomes infructuous.
The CIT(A), thus, dismissed the appeal filed by the assessee.
4. At the time of hearing the learned counsel for the assessee referred to the provisions of Section 30 of the IT Act, 1922, which reads as follows : "Provided that no appeal shall lie against an order under Sub-section (1) of Section 46 unless the tax has been paid." "Where a return has been filed by the assessee the assessee has paid the tax due on the income returned by him".
and contended that the words used in Section 30 of the IT Act, 1922 are in pan materia with Section 249(4)(a) of the IT Act, 1961. Therefore, he invited our attention to the Supreme Court decision in the case of CIT v. Filmistan Ltd. (1961) 42 ITR 163 (SC) wherein the Hon'ble Supreme Court has interpreted Section 30 of the IT Act, 1922, as follows : "The controversy between the parties revolves around 'no appeal shall lie". The contention which was raised before us was that these words meant that there is no right of appeal till the tax is paid and, therefore, if the tax has not been paid,' the memorandum of appeal cannot be filed and if filed, it is merely a waste paper. In our opinion, the meaning of the words 'no appeal lie' will not be held to be properly filed until the tax has been paid. If for instance, the memorandum of appeal is filed on 20th, i.e., 10 days before the period of limitation expires, and the tax is paid within the rest of 10 days the appeal will be a proper appeal. It will be within time and no question of limitation will arise but if the tax is paid even though the memorandum of appeal was presented earlier and within the period of limitation. The question will then to be decided whether there was sufficient cause of condonation of delay and that is exactly what the Tribunal had ordered and that, in our opinion, is the effect of proviso to Section 30(1) with Sub-section (2) of Section 30 of the Act." The learned counsel also pointed out that the above judgment of Supreme Court was based on the Bombay High Court judgment in the case of CIT v.Filmistan Ltd. (1958) 33 ITR 334 (Bom) wherein the Hon'ble High Court has held as follows : "There is a direct decision of the Patna High Court in Kamdar Bros.
of Jharia v. CIT (1955) 27 ITR 176 (Pat) where that High Court held that if the tax was paid before the date of hearing, the appeal was competent although filed before the tax was actually paid. Their Lordships in the judgment took the same view of the interpretation of the words "appeals shall lie" in proviso and the word "presented" in Sub-section (2) as we are disposed to take viz., that if the legislature intended to provide in the proviso that the appeal shall not be presented, nothing could have been simpler for the legislature than to use that expression. Their Lordships also considered the dictionary meaning of the word "lie", which unfortunately, does not necessarily help the one view or the other, but only says the expression 'lie' may be an expression of doubtful meaning. We have, in any event here a case where two High Courts have taken two contrary views of the provisions of a statute and it would be reasonable, in any event, to say that the true meaning of the words "shall lie" in the proviso is not beyond doubt and were it not beyond doubt we ought to put on the proviso a construction which will favour the assessee and which would not deprive him of the right of appeal together, because such a construction would be in consonance with right and justice rather than the construction which would deprive him of that right altogether." 5. The learned counsel further referred to the case of Kamdar Bros. of Jharia v. CIT (supra) wherein the High Court held that the proviso does not state "no appeal shall be presented against an order under Sub-section (1) of Section 46 unless the tax has been paid". There is a distinction between the presentation of an appeal and the admission of an appeal and this distinction has been expressly recognised by the legislature in the language of Section 30 of the Act. Section 30(2) states "the appeal shall ordinarily be presented within thirty days of the payment of the tax deducted under Sub-sections (3A), (3B) or (3C) of Section 18 or of receipt of the notice of demand relating to the assessment or penalty objected to...." 6. The learned counsel referred to the case of Mussummat Durga Choudhari v. Jawahar Singh Choudhari to support his contention. In the above case, the question at issue was proper interpretation to be given to Section 100 of the CPC which states that- "Save where otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to a High Court, on any of the following grounds, namely...." It has been held in that section should be interpreted to mean that the High Court has no jurisdiction to entertain a second appeal except on the grounds specified in this section itself. Similarly, O' Shea v.O'Shea & Parnell (2) the English Court of appeal was considering the proper interpretation to be placed on Section 47 of the Judicature Act, 1873 which was in the following terms : "No appeal shall lie from the judgment of the said High Court in any Criminal Cause or matter, save for some error of law apparent upon the record, as to which no question shall have been reserved for the consideration of the said Judges under the said Act of the 11th and 12th years of her Majesty's reign".
"It was held in that case that the Court of appeals had no jurisdiction to hear on application by a party to a civil action for an attachment against a person not a party to the action for contempt of Court was a "criminal cause or matter" within the meaning of Section 47 of the Judicature Act and no appeal from an order made upon such an application can be heard by the Court of appeal. These authorities support to some extent the view that we have taken as to the interpretation of the first proviso of Section 30(1) of the Indian IT Act." 7. The learned counsel further referred to the case of Kashiram Bhajan Lal v. CIT (1962) 45 ITR 1 (All) wherein the Supreme Court held that "in our opinion the word "lie" can also be used in the sense of sustainable and we read the proviso to that effect, no appeal shall be sustainable against an order under Sub-section (1) of Section 46 unless the tax has been paid. The expression "unless the tax has been paid" clearly shows that the right to file the appeal is there, but the appeal becomes effective only after the tax has been paid. The proviso does not say that "no appeal shall lie...." unless the tax is paid on the date on which the appeal is sought to be filed or by the time of limitation for filing the appeal has expired. In other words, the proviso is silent on the point by which time the tax shall be deposited in order to make the appeal "lie". A proviso must be strictly construed and its scope cannot be widened by adding some words to it which does not exist in it. We have, therefore, to conclude that even if the tax is paid till the appeal is actually heard on the date of hearing, the appeal would be competent and relief can be given on its basis.
8. The learned counsel further invited our attention to the Orissa High Court decision in the case of CIT v. Kalipada Ghose (1987) 167 ITR 173 (Ori) wherein the High Court has laid down that "Section 249(4) lays down condition that unless the admitted tax in a case where return has been filed by the assessee or advance-tax in case where no return has been filed is deposited by the assessee, the appeal shall not be admitted. Under the proviso to the sub-section power to exempt the assessee from making the deposit is vested in the appellate authority.
Therefore, the assessee could comply with the requirements of Section 249(4) of the Act either by making the deposit in question or by obtaining the order of exemption." The Court further held that "on the aforesaid analysis, it has to be held that the order of the AAC dismissing the appeals for non-compliance with Section 249(4) of the Act came within the ambit of Section 250 of the Act and was appealable before the Tribunal under Section 253 of the Act. The Tribunal, therefore, committed no illegality in entertaining the appeal and in condoning the delay of being satisfied on the facts and circumstances of the case that there was sufficient cause for the assessee's failure to comply with the provisions of Section 249(4) of the Act and in remitting the cases to the first appellate authority for disposal on merits." Thus, according to the learned counsel, the entire tax payable on the returned income of Rs. 6 lakhs was paid on or before 31st March, 2000. The appeal was to be filed latest by 27th March, 2000 which was actually filed on 24th March, 2000. The counsel referred to the decision of the Delhi Bench of the Tribunal in the case of Encon Furnaces (P) Ltd. v. Assn. CIT (1996) 56 ITD 40 (Del) wherein the Tribunal held that "the same reason would also apply for admission of appeal if it is considered as a belated one following the ratio of the Hon'ble Supreme Court in the case of CIT v. Filmistan Ltd. (supra). In the aforesaid case it was held by their Lordships that in case the tax is paid after the period of limitation has expired, it could be taken to have paid on the day when the tax is paid even though memorandum of appeal was presented earlier and within the period of limitation. Their Lordships further held that the question then have to be decided whether there was sufficient cause for condonation of delay or not. Even for this, the principle of sufficient reason has to be applied before the appeal could be admitted for its decision on merits. On the same set of facts whatever has been held to be good and sufficient reason for admission of appeal under proviso of Section 249(4) of the Act would also constitute sufficient reason for admission of appeal under Section 249(3) of the Act. Thus, on both the accounts, we are of the considered view that the appeal should have been admitted and decided on merits." Thus, the learned counsel contended that the assessee was having a reasonable cause for filing the appeal belatedly, i.e., in the present case, the only delay was of 4 days. The learned counsel argued that the assessee's case is squarely covered with the decision of the Delhi Bench of the Tribunal discussed above.
10. The learned counsel also made reference to the decision of the Kerala High Court in the case of Vanaja Textile Ltd. v. CIT (2001) 249 ITR 374 (Ker) wherein the High Court laid down that "Section 292B of the IT Act, 1961, provides that no return of income shall be invalid or shall be deemed to be invalid merely by a reason of any mistake, defect or omission in such return of income if it is, in substance and effect, in conformity with or according to the intent and purpose of the Act.
Section 139 also throws some light on the question. If there is any defect, the AO is required to give an opportunity to the assessee to rectify the defect within the stipulated time." 11. Similarly, the learned counsel also referred to the decision of the Calcutta High Court in the case of National Insurance Co. Ltd. v. CIT (1995) 213 ITR 862 (Cal) wherein the Court also laid down that "a return of income has to be regarded as a defective, only if it contains any of the defects referred to in the Explanation to Section 139(9). In other words, the provisions of Section 139(9) will not be applicable in the case of returns which do not contain any of the specified defects.
Section 139(9) makes a distinction between a defective return and an invalid return. A defective return is not ipso facto to be regarded as an invalid return. It is only when a return contains any of the specified defects and the ITO in his discretion, intimates the defect to the assessee and the assessee rectifies the same within the specified period, that the ITO may treat the return as invalid return." 12. The learned counsel thus prayed that the matter be restored to the file of the CIT(A) for fresh adjudication in accordance with law and further giving the appellant due and adequate opportunity of being heard.
13. The learned Departmental Representative contended that the full taxes were not paid before filing the appeal. He invited our attention to the appeal Form No. 35 (placed in the Departmental compilation p.
(1) and stated that no taxes were paid as per the appeal memo. He further stated that as per the demand notice under Section 156 of the IT Act there was only adjustment of refund of Rs. 27,830. He pointed out that the appeal was filed on 24th March, 2000, whereas the request for adjustment of seized cash of Rs. 1,80,000 was made only on 27th Aug., 2000 (Departmental compilation p. 6). The learned Departmental Representative also invited our attention to Section 30 of the IT Act, 1922, and contended that no appeal to the AAC against the assessment order would "lie" under Sub-section (1) of Section 46 unless the tax has been paid. He further invited our attention to Sub-clause (2) of third proviso of the above section wherein it has been clearly mentioned that "but the AAC may admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within that period." Therefore, he argued that under the provisions of Section 46 of the IT Act, 1922, there was a discretion with the AAC to admit an appeal if he was satisfied that the assessee was having sufficient cause for not making the payment of taxes before filing the appeal, but, under the present Section 249(4)(a) of the IT Act, 1961, there is no such discretion available to the CIT(A). It is mandatory on the part of the assessee to make the payment of taxes as per returned income before filing the appeal.
Otherwise, the appeal filed would be treated as invalid appeal.
14. The learned Departmental Representative thus pointed out that the Supreme Court decision in the case of Filmistan Ltd. (supra) relied upon by the learned counsel is not applicable to the present provisions of Section 249(4)(a) of the IT Act, 1961. The learned Departmental Representative referred to the decision of the Ahmedabad Bench in the case of Khushmanlal Hiralal v. Asstt. CIT (1996) 57 ITD 531 (Ahd) wherein the Tribunal has interpreted the provisions of Section 249(4)(a) of the IT Act, 1961, and has held that there is no dispute that the assessee had not paid tax on the returned income before filing of the appeal on 3rd Feb., 1992, nor any advance tax or tax on account of self-assessment had been paid by the assessee. As such, the provisions of Section 249(4)(a) are clearly attracted in the case of the assessee. It may be submitted that Section 249(4)(a) was brought on the statute book with specific purpose of discouraging the assessee from withholding the tax due on the returned income by filing an appeal before the concerned authority; in other words, the intention behind this provision was encouraging tax compliances.
These provisions must be interpreted in consonance with the avowed aims and objects of the legislature in enacting this provision and to further these and not to defeat these. Being the creature of the IT Act, 1961, the CIT(A) has to function within the parameters of the said statute and as such has no inherent powers in the matter of entertaining the appeal. He does not have power to transgress the limits placed by the statute. Under the circumstances, the CIT(A) was justified in not entertaining the appeal filed by the assessee." 15. The learned Departmental Representative also invited our attention to the judgment in the case of Lachmandas Arora v. Ganeshlal (1999) 8 SCC 532 where it is laid down that "there is no gain saying that the law of limitation may harshly affect a particular party. But it has to be applied with all its vigours when the statute so prescribes. The Courts cannot extend the period of limitation on equitable grounds." The learned Departmental Representative thus, contended that various cases relied upon by the learned counsel are old cases and they do not have any application to the amended provisions of Section 249(4)(a) of the IT Act, 1961. He, therefore, prayed that the findings of the learned CIT(A) may be confirmed as the appeal filed before the CIT(A) was not maintainable under the provisions of Section 249(4)(a) of the Act.
16. We have carefully considered the submissions made by the rival parties. We have also gone through the various documents filed before us. The main issue for consideration in this case is regarding the maintainability of the appeal filed by the assessee before the CIT(A).
The CIT(A) has dismissed the appeal on the ground that the same is not maintainable under the provisions of Section 249(4)(a) of the IT Act, 1961. In this case, the return of income was filed on 27th Nov., 1998.
However, self-assessment tax of Rs. 10 lakhs was not paid thereon. The appeal against the order of the AO was to be filed latest by 27th March, 2000, but the same was filed on 24th March, 2000, the tax payable on the returned income of Rs. 10, lakhs was Rs. 6 lakhs. The assessee made the request that the amount seized during the course of action under Section 132 of Rs. 1,80,000 be adjusted against the tax payable on the returned income. There was also a refund due of Rs. 27,830 pertaining to the asst. yr. 1998-99 on 2nd Dec., 1999. The assessee paid the amount of Rs. 5 lakhs before 31st March, 2000. Thus, the assessee paid the tax as follows : This tax covers the full tax due on Rs. 10 lakhs returned income. The assessee was required to make the payment of Rs. 6,12,000 including the interest under Section 158BFA on the returned income of Rs. 10 lakhs.
But the assessee paid only Rs. 2,07,830 (Rs. 1,80,000 + Rs. 27,830) by way of adjustments as mentioned above before filing the appeal on 24th March, 2000. The payment of Rs. 5 lakhs was paid after the filing of the appeal on 31st March, 2000, which cannot be considered as payment made before filing the appeal. Therefore, it is an admitted fact that the assessee did not make the payment of tax which was due on the returned income of Rs. 10 lakhs before filing the appeal. Therefore, the default of the assessee under s, 249(4)(a) of the Act is clearly established.
"No appeal under this Chapter shall be admitted unless at the time of filing the appeal...
(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or (b) where no return has been filed by the assessee the assessee has paid an amount equal to the amount of advance tax which was payable by him. Provided that in case falling under Clause (b) and on an application made by the appellant in this behalf, the CIT(A) may, for any good and sufficient reasons to be recorded in writing exempt him from the operation of the provisions of that clause." There is no dispute that the assessee had not paid the tax on the returned income before filing the appeal on 24th March, 2000 nor any advance-tax or tax on account of self-assessment had been paid by the assessee. The provisions of Section 249(4)(a) are mandatory and are clearly attracted in the case of the assessee prior to the Tax Laws (Amendment) Act, 1989, w.e.f. 1st April, 1989, there was a discretion with the CIT(A) to exempt the assessee from the operations of provisions of Clause (a) of Sub-section (4) of Section 249 if the assessee produced before the CIT(A) an evidence that he was prevented by some good and sufficient reasons for not making the payment on the returned income before filing the appeal. But such discretion had not been conferred on the CIT(A) after the amendment. Therefore, the appeal of the assessee would not be maintainable if tax has not been paid on the returned income before filing the appeal. The amendment has been brought on the statute book with some specific purpose of discouraging the assessee from withholding tax due even on the returned income by filing an appeal before the concerned authority and to get the benefit on the basis of good and sufficient reasons for not making the payment on the returned income before filing the appeal. The object behind the amendment was to encourage the tax compliance. The very purpose of the amendment to this section would be defeated if appeals are admitted even without making the payment of tax on the returned income on the basis of good and sufficient reasons for not making the payment.
Therefore, these provisions must be interpreted in consonance with the aim and objects of the legislature in enacting the provisions for the objects and not to defeat them. The requirement of Section 249(4) regarding payment of tax on income returned, etc. cannot be said merely to regulate the exercise of the assessee's pre existing right of appeal but in truth whittles down the right itself and cannot be regarded as mere rule of procedure. The provisions of Section 249(4) are substantive provisions. This has been laid down by the Hon'ble Supreme Court in the cases of Hussain Kasam Dada (India) Ltd. v. State of M.P.(1953) 4 STC 114 (SO and Collector of Customs v. A.S. Bawa AIR 1968 SC 18. Therefore, in order to get his appeal admitted by the first appellate authority, the assessee must comply with the mandatory requirements of the provisions of Section 249(4)(a), wherever these have application as to the payment of tax due on the returned income before the expiry of the period of limitation of filing the appeal. On failure of the assessee to comply with the requirement the first appellate authority is competent not to admit the appeal.
18. The language of Section 249(4)(a) is very plain and without any ambiguity. We also do not find any inconsistencies in the words and expression used in the section. A statute is an edict of the legislature and conventional way of interpreting or construing statute is to seek the intention of its maker. A statute is to be construed according to the intent of them that make it and the duty of adjudicative is to act upon the true intention of the legislature. If a statutory provision is open to more than one interpretation, the Court has to choose that interpretation which represents the true intention of the legislature. In the present case Section 249(4)(a) is not open to more than one interpretation, i.e. no appeal shall be admitted unless at the time of filing the appeal "where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him." The intention of the legislature is very clear that the appeal would not be maintainable unless the tax is paid on the returned income. The function of the Court is only to expound and not to legislate. Sometimes, the words used by the legislature do not always bear a plain meaning. Moreover, Judges quite often differ on the issue whether certain words are plain and even when there is an agreement that the words are plain, difference of opinion may result on the question as to what the plain meaning is. In case of doubt, therefore, it is always safe to have an eye on the object and purpose of the statute or reason and spirit behind it. In the present case, the words used by the legislature in Section 249(4)(a) bear a plain meaning i.e., before filing the appeal tax must be paid on the returned income otherwise appeal is not maintainable. Even if there is any doubt, we have to look into the object and purpose of the statute and the reason and the purpose behind it. Prior to the amendment, the assessees were not making the payments of taxes even on their returned income and their appeals were admitted just on the basis that the assessees were having good and sufficient reasons not to make the payment even on the returned income before filing the appeal. The amendment to Section 249(4)(a) was brought on the statute to meet with this situation and to force such tax evaders to make the payment at least on the basis of their returned income before filing the appeal. So the provisions of Section 249(4)(a) have to be construed in the light of general purpose and object of the statute. Now, if the appeal is admitted without the payment of taxes on the returned income, this would defeat the very purpose of the amendment to Section 249(4)(a) of the Act which is w.e.f. 1st April, 1989. It is a rule now firmly established that the intention of the legislature must be found by reading the statute as a whole. It is also an established rule of law that a statute or any enacting provisions therein must be so construed as to make it effective and operative. A statute is designed to be workable, and the interpretation thereof by a Court should be to secure the object unless crucial omissions or clear directions make that end unattainable. It has been held by the Courts that a construction which fails to achieve the manifest purpose of the legislature should be avoided otherwise it would reduce the legislation to futility. In the present case, the intention of the legislature quite plain, i.e., to collect the taxes at least on the basis of returned income before filing the appeal. But if the appeal filed without making the payment of tax on the basis of returned income is to be taken as maintainable, it would defeat the obvious intention of the legislature to force the collection of lawful taxes and would reduce the statute to futility. Therefore, in our opinion, the appeal is not maintainable where the taxes have not been paid on the basis of returned income before filing the appeal.
19. It is a well-established rule that the taxing statute must be strictly construed. In a classic passage from Partington v. A.C. (1869) LR 4 HL 100, p. 122 referred in the case of J.K. Steel Ltd. v. Union of India AIR "If the person sought to be taxed comes within the letter of law he must be taxed, however, great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover tax, cannot bring the subject within the letter of the law, the subject is free, however, apparently within the spirit of law the case might otherwise appear to be. In other words, if there be admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute." Similarly, Viscount Simon guoted with approval a passage from Rowlatt, J, in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64, p. 71 (Rowlatt, J) referred in the case of Smt. Tarulata Syam v. CIT AIR 1977 SC 1802, expressing the principle in the following words : "In a Taxing Act one has to look merely at what is clearly said.
There is no room for any intendment. There is no equity about a tax.
There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." The Courts have also held that "the proper course of construing Revenue Acts is to give a fair and reasonable construction to their language without leaning to one side or the other but keeping in mind that no tax can be imposed without words clearly showing an intention to lay the burden and that equitable construction of the words is not permissible. Consideration of hardship, injustice or anomalies do not play any useful role in construing taxing statutes unless there be some real ambiguity. It has also been said that if taxing provision is "so wanting in clarity that no meaning is reasonably clear, the Courts will be unable to regard it as of any effect." The Supreme Court in the case of A.V. Fernandez v. State of Kerala AIR 1957 SC 657 has enunciated the principle of interpretation of taxing laws in the language of Bhagwati, J., as follows ; "In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law.
If the Revenue satisfies the Court that the case falls strictly within the provisions of tax law, the subject can be taxed. If on the other hand, the case is not covered within the four corners of the provisions of taxing statute, no tax can be imposed by inference or by ahalogy or by trying to prove into the intention of the legislature and by considering what was the substance of the matter." Similarly, the Hon'ble Supreme Court in the case of CST v. Modi Sugar Mills AIR 1961 SC 1047, has enunciated the principle of interpretation of taxing laws at p. 1051 in the language of Shah J, as follow : "In interpreting a taxing statute, equitable consideration are entirely out of place. Nor can taxing statute be interpreted on any presumptions or assumptions. The Court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any assumed deficiency." Thus, the Courts have held that if the words used are ambiguous and reasonably open to two interpretations benefit of interpretation is given to the subject. If the legislature fails to express itself clearly and the tax payee escapes by not being brought within the letter of the law, no question of unjustness as such arises. But equitable considerations are not relevant in construing a taxing statute and similar logic or reason cannot be of much avail in interpreting a taxing statute. When intention to levy the tax is clearly shown by the words used by Parliament it is not open to speculate on what would be the fairest and most equitable mode of levying that tax and no rule or principle of construction requires that the close reasoning should not be employed to arrive at the true meaning of a badly drafted provisions in taxing statute.
The rule that object of the legislature has to be kept in view and construction consistent with the object has to be placed on the words used if there be ambiguity, is also applicable in construing a taxing enactment. Every taxing statute has a fiscal philosophy, a feel of which is necessary together the intent and effect of its different clauses. Courts are not entitled to fill in any lacuna in any Act much less in a Taxing Act, but the Courts will also not stretch a point in favour of the taxpayer to enable him to get by his astuteness the benefit which other taxpayer do not obtain.
20. In the present case, the provisions of Section 249(4)(a) are mandatory and the intention of the legislature is also very clear to enforce the payment of taxes before filing the appeal as per the returned income. There is no ambiguity in the language of the said section and the same is also not open to two interpretations. The intention of the legislature to recover the tax on the returned income before filing the appeal to the CIT(A) is clearly expressed in the language of section. Therefore, the same is not open to speculate as what would be the fairest and most equitable mode of collecting the tax. Therefore, as we have mentioned above, the object of the legislature has to be kept in view and a construction consistent with the object has to be placed on the words used if there is any ambiguity; but in the present case, there is no ambiguity in the language of the section and it is capable only to one interpretation that the tax must be paid on the returned income before filing the appeal. In view of the aforesaid discussion, we do not find any infirmity with the order of the learned CIT(A) and the same is upheld.21. The various Court cases relied upon by the learned counsel have no application to the facts of the present case. In the case of Filmistan Ltd. (supra) as per the provisions of Section 30 of the Indian IT Act, 1922, there was a discretion with the AAC to admit an appeal after the expiration of the period if he was satisfied that the appellant had sufficient cause for not presenting it within that period. The Hon'ble Supreme Court held that "If, for instance, the memorandum of appeal is filed on 20th day, i.e. 10 days before the period of limitation expires and the tax is paid within the rest 10 days, the appeal will be proper appeal, it will be within time and no question of limitation will arise but if the tax is paid eventhough the memorandum of appeal was presented earlier and within the period of limitation, the question will then have to be decided whether there was sufficient cause for condonation of delay and that is exactly what the Tribunal had ordered and that in our opinion is the effect of the proviso to Section 30(1) r/w Sub-section (2) of Section 30 of the Act." Thus, the Hon'ble Supreme Court has interpreted the provisions of the proviso to Section 30(1) r/w Sub-section (2). Sub-section (2) as we have mentioned above gives -the discretion to the AAC to admit an appeal if he is satisfied that the appellant had sufficient cause for not presenting it within that period. There is no such discretion given to the CIT(A) in the present Section 249(4)(a). Therefore, the provisions are mandatory in nature. Moreover, in the above case, the tax was paid within the limitation period for filing the appeal, whereas in the present case, the tax has been paid after the limitation period of filing the appeal.
The last date for filing the appeal expired on 27th March, 2000, whereas the full taxes on the returned income were paid only on 31st March, 2000. In fact, the provisions of Section 30 of the Indian IT Act, 1922 were pan materia to the provisions of Section 249(4)(a) before the amendment which is w.e.f. 1st April, 1989. Under these circumstances, this case has no application to the provisions of the present Section 249(4)(a) of the IT Act, 1961. Similarly, the Bombay High Court decision in the case of Filmistan Ltd. (supra) is not relevant to the facts of the present case. The Patna High Court decision in the case of Kamdar Bros. of Jharia (supra) is also not relevant to the facts of the present case as the same is also based on the provisions of Section 30 of the Indian IT Act, 1922, which we have already discussed in the foregoing paragraphs. Similarly, in the case of Mussummat Durga Choudhaii vs Jawahar Singh Choudhaii (supra) is not relevant as the same is also based on the interpretation of the first proviso of Section 30(1) of the Indian IT Act, 1922. The case of Kashiiam Bhajan Lal (supra) is also based on the provisions of Section 30 of the IT Act, 1922, which empowers the AAC to admit the appeal even after the expiration of the period if he is satisfied that the assessee had sufficient cause for not presenting it within that period. There is no such discretion left with the CIT(A) under the amended provisions of Section 249(4)(a) of the Act. The facts of the case of Kalipada Ghose (supra) are not relevant to the facts of the present case. The above case has been decided prior to the amendment to Section 249(4)(a) of the Act. Section 249(4)(a) was amended w.e.f. 1st April, 1989, and thereafter the provisions of Section 249(4)(a) became mandatory. Under the new provisions, if the assessee wants to get his appeal admitted by the first appellate authority, he must comply with the mandatory requirement of the provisions of Section 249(4)(a) by making the payments of the tax on the returned income before filing the appeal. On failure of the assessee to comply with the requirement, the first appellate authority is competent not to admit the appeal. Therefore, this case is also ,not relevant because the same pertains to the period prior to amendment when the CIT(A) was having discretion under the provisions of the proviso to Section 249(4) for the admission of the appeal even if the taxes were not paid on the returned income if he was satisfied that the assessee had good and sufficient reasons for not making the payments of tax. The case of Gopalchand Khandelwal (supra) of Delhi Bench of the Tribunal is not relevant to the issue involved in the present case. The issue involved in that case whether in view of the fact that the assessee had applied soon after search for adjusting seized cash against his tax liability, it could be held that tax was not paid on income returned has to debar the assessee from filing the appeal as per Section 249(4). The Tribunal held that the appeal was maintainable because the cash seized should have been considered on payment of tax on the returned income. This case, moreover, supports our finding that the appeal would be maintainable only if the tax has been paid on the returned income before filing it. The case of Encon Furnaces (P) Ltd. (supra) pertains to the old provisions of Section 249(4)(a) when Clause (a) of Sub-section (4) of Section 249 was also covered by the proviso to Section 249(4). Therefore, this case is also not relevant to the facts of the present case. The case of Bhagwati Prasad Kedia (supra) is on the issue of interpretation statutes which we have discussed in detail in the aforesaid paragraphs and we have concluded that the intention of the legislature to amend this section w.e.f. 1st April, 1989, was to enforce-the recovery of tax at least on the returned income. We have also held that the taxing statutes have to be strictly construed. Similarly, other cases relied upon by the learned counsel have no relevance to the facts of the present case.
Under the circumstances, the learned CIT(A) has correctly treated the appeal of the assessee as not maintainable.