TMI Blog2006 (7) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty and not against the quantum, so the fee of Rs. 500 has rightly been paid by the assessee and the objection as raised should be dropped. 4. When after recalling of the order, the case was fixed for first hearing on 6-4-2006, the assessee's counsel requested for adjournment which was granted and the assessee's counsel was reminded that fee paid is short by Rs. 4,039. The case was adjourned for 25-4-2006, when again the assessee filed application for condonation of delay taking the plea that the assessee is still of the opinion that the fee is payable at Rs. 500 only, however, to purchase peace and to avoid dispute, he has paid difference of fees of Rs. 4,039 on 19-4-2006 at SBI, Nainpur. So it was requested that delay, if any, in payment of fees may be condoned and appeal be admitted and heard on merit. 5. Ld. DR opposed the move of the assessee and in view of Special Bench decision in the case of Bidyut Kumar Sett v. ITO [2005] 142 Taxman 50 (Cal.) (Mag.) pleaded that since the assessee is pleading that fee of Rs. 500 has correctly been paid so his appeal should not be admitted as delay caused in payment of deficient fee cannot be said to be in good faith which is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of income assessed by the Assessing Officer and the concealed income and also establish the requisite relationship between the assessed income and the filing fee. If the Legislature wanted to provide for the filing fee based on the quantum of income assessed only in the case of appeals filed against the assessment order, then they could have easily used a much simpler phraseology in clauses (a) to (c) as has been done in section 246 which provides for appeals to the Commissioner (Appeals). However, since the expression 'in the case to which the appeal relates' has been coined in clauses (a) to (c), it indicates a clear intention on the part of the Legislature to link the filing fee with the amount of income assessed by the Assessing Officer in cases of all appeals which have a relation with the amount of income assessed including appeals against penalty for concealment. The residuary clause takes care of all appeals, including appeals against certain penalties which have no nexus with the amount of income assessed." 8. Though the assessee has hot shown his bona fides and he has just made good the deficiency only to purchase peace and to avoid dispute yet fact of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Kanpur Range. The Full Bench relied on an observation of this Court in Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner (J)-I, Sales Tax, Kanpur with regard to the meaning of the word "entertain". According to that decision "entertain" meant the first occasion on which the Court took up the matter for decision. It might be at the admission stage or if by the rules of the Appellate Tribunal the appeals were automatically admitted it would be the time of the hearing of the appeal. The High Court considered that according to the aforesaid decision of this Court when the first proviso is read with the main provision of section 9(1) of the Act the deposit also had to be made within limitation. The High Court came to the conclusion that section 9(6) of the Act could not be applied and section 5 of the Limitation Act was not attracted when the question arose whether the delay in depositing the admitted tax should be condoned." We are wholly unable to comprehend and appreciate the above reasoning or the conclusion of the Allahabad High Court on the point under consideration. It is true that an appeal filed under section 9 of the Act cannot be entertained by the appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case. Indeed according to that decision the words "no appeal shall be entertained" in the proviso to section 9 do not denote the filing of the memorandum of appeal but refer to the point of time when the appeal is being considered. Therefore though the memorandum of appeal filed within time is not accompanied by the treasury challan showing payment of tax if before the appeal is being considered satisfactory proof of payment of tax is given then the proviso to section 9 is satisfied. In the present case when the assessee produced the necessary documents which showed that the deposit of the full amount had been made by 27-5-1966 the appeal became entertainable. It only suffered from the defect that it was barred by time on that date. The assessee could, therefore, apply under section 9(6) for extending the period of limitation in accordance with section 5 of the Limitation Act. It is entirely a different matter whether on the facts of the present case the appellate authority would have condoned the delay or not but to say that the appellate authority had no jurisdiction to extend the time simply because the amount of admitted tax had been deposited beyond the period of 30 days wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decide the appeals on merits after due opportunity to the assessee. While passing this direction we are well aware that the right of appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in judicial and quasi-judicial adjudication. The right to appeal is a statutory right and it can be circumscribed by the condition in the grant. If a statute gives a right to appeal upon certain conditions it is upon fulfilment of those conditions that the right becomes vested in and exercisable by the appellant. But all other circumstances are also to be taken into account before applying the provisions of law in this regard and in this case assessee conclusively fulfilled the required conditions: So his appeals were held to be entertainable. As a result, appeals of the assessee get accepted." 10. Now adverting to the facts of the present case in relation to admission of the appeal, I find that difference between the case in hand and the case decided by the Delhi 'A' Bench of ITAT is that in this case question about delayed payment of deficit Tribunal fee is there whereas in that case, delayed payment of wealth-tax before the filing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, has concluded to confirm the action of Assessing Officer against which the assessee is in further appeal. 13. Ld. counsel for the assessee pleaded before this Bench that firstly, penalty could not be imposed as addition made and to the extent sustained was on estimate basis. Therefore, penalty is liable to be deleted and alternatively it was pleaded that since addition sustained to the extent of Rs. 1,02,000 includes addition of Rs. 28,500 which was the amount surrendered at the time of search and disclosed in the return filed in response to notice under section 148 so penalty with respect to such amount is not imposable at all, therefore, if penalty has to be sustained it should be in relation to Rs. 73,500 and not with respect to Rs. 1,02,000. 14. Ld. DR while relying on the basis and reasoning as given by the authorities below has pleaded for the confirmation of the impugned order. It was further submitted that assessee in this case, in response to notice in penalty proceeding has stated an incorrect fact that entire addition made by the Assessing Officer has been deleted by the ITAT whereas such addition was restricted to Rs. 1,02,000 by ITAT and not deleted as cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n even be imposed on estimated addition also. Relevant head notes and conclusion as drawn by the Hon'ble Supreme Court are reproduced as under- "Penalty under section 271 (1)(c), Explanation - Burden of proof - Difference between income assessed and income returned was more than 20 per cent - Assessee not able to discharge the onus which was on it under the Explanation to section 271(1)(c) - ITO justified in imposing penalty, notwithstanding the fact that income was assessed on estimate basis - CIT v. B.A. Balasubramaniam Bros. [1984] 40 CTR (Mad.)/[1985] 152 ITR 529 (Mad.) affirmed; CIT v. Mussadilal Ram Bharose [1987] 60 CTR (SC) 34/[ 1987] 165 ITR 14 (SC); TC 50 R. 474; CIT v. K.R. Sadayappan [1990] 86 CTR (SC) 120; [1990] 185 ITR 49 (SC); TC 50 R. 795 and Addl. CIT v. Jeevan Lal Sah [1994] 117 CTR (SC) 130; [1994] 205 ITR 244 (SC); TC 50 R. 973 followed. Conclusion Difference between the income assessed and the income returned being more than 20 per cent, the Explanation to section 271 (1)(c) became applicable and the ITO was justified in imposing penalty because the assessee had not been able to discharge the onus which was on it under the said Explanation, notwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the statement given under section 132(4), the assessee admits the receipt of undisclosed income for those years and also specifies the manner in which such income had been derived, and thereafter pays the tax on that undisclosed income with interest, such undisclosed income would get immunised from the levy of penalty. There was a search in the premises of the assessee on 13-2-1990. A statement of the assessee was recorded, under section 132(4) of the Act, at the time of search. Thereafter, the assessee filed his returns for the earlier year: and admitted a larger income and also paid the tax together with interest. The Assessing Officer levied penalty. The Tribunal cancelled the penalty. On reference: Held, that the Tribunal was right in holding that the penalty was not leviable." 18. Since no contrary decision has been cited in this regard, and as per Hon'ble M.P. High Court in the case of CIT v. G.M. Mittal Stainless Steel Ltd. [2005] 142 Taxman 349 (MP) in the absence of Hon'ble S.C./jurisdictional High Court decision, help can be taken from other High Court decision, so, in view of Hon'ble Madras High Court decision, as noted above, penalty with respect to Rs. 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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