TMI Blog2005 (4) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... hereas 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 computation of total income made by-Assessing Officer in the origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 phraseology "total income of the assessee as computed by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, 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 will relieve the assessee-appellant of the burden of fee with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The relevant columns 2 to 5 of Form No. 36 are reproduced below:- 2. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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 section 263 or section 264, a re-assessment order under section 147, a rectification order un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion 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 income as computed by the Assessing Officer after giving effect to the order of the first appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst 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 computed by the Assessing Officer, in the case to which the appeal relates, is one hundred thousand rupees or less, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; or (v) is the holder of a credit card, not being an "add-on" card, issued by any bank or institution; or (vi) is a member of a club where entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (1), and the provisions of this Act shall apply accordingly." Section 143(3) reads as under: "143(3) On the day specified in the notice,- (i) issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 provides an appeal to the first appellate authority, in this case being the CIT(A). As is evident from the provisions of section 251, the CIT(A) has the power to confirm, reduce e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,70,700. The Revenue's case is that the required fee to be paid by the assessee is 1 per cent of the income assessed by the Assessing Officer, i.e., 1 per cent of Rs. 4,04,120. However, the assessee's case is that he is required to pay fee at the rate of 1 per cent of the income as assessed after giving effect to the order of the CIT(A). As mentioned earlier, the claim made by the assessee has been accepted by the Hon'ble Judicial Member. However, the Hon'ble Accountant Member has taken a contrary view. The Hon'ble Accountant Member has referred to the decision of the Hyderabad Bench of the Tribunal in the case of Andhra Pradesh State Electricity Board. The Ld. Accountant Member has quoted the following para from the order of the Tribunal. "On a plain reading of section 253(6), it is clear that it is the total income as computed by the Assessing Officer in the case to which the appeal relates. Therefore, the total income which is computed by the Assessing Officer must be in the case which is in appeal. The assessment order gives birth to an appeal before the first appellate authority and an appeal then comes to the Tribunal against that order in first appeal. It is, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT v. L.G. Ramamurthi [1977] 110 ITR 453. In this case, it has been held as under: "No Tribunal of fact has any right or jurisdiction to come to a conclusion entirely contrary to the one reached by another Bench of the same Tribunal on the identical facts. It may be that the members who constituted the Tribunal and decided on the earlier occasion are different from the members who decided the case on the present occasion. But what is relevant is not the personality of officers presiding over the Tribunal or participating in the hearing, but the Tribunal as an institution. If it is to be conceded that simply because of the change in the personnel of the officers who manned the Tribunal, it is open to the new officers to come to a conclusion totally contradictory to the conclusion which had been reached by the earlier officers manning the same Tribunal on the same set of facts, it will not only shake the confidence of the public in judicial procedure as such, but it will also totally destroy such confidence. The result of this will be conclusions based on arbitrariness and whims and fancies of the individuals presiding over the courts or the Tribunals and not reached object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and the ITAT. In CIT v. Indian Express (Madurai) (P.) Ltd. [1983] 140 ITR 705, the Hon'ble Madras High Court has held that there is no dispute about the proposition of law that appellate proceedings are continuation of assessment proceedings. Therefore, when the CIT(A) or the Appellate Tribunal modifies the income assessed by the Assessing Officer, the income so modified will be the assessed income unless modified by a decision of the Hon'ble High Court or Hon'ble Supreme Court. However, here it is noteworthy t hat the Legislature has not used the words "assessed income" in isolation as the basis for payment of appeal fee to the Tribunal. The Legislature, in its wisdom has consciously used the words "the income as computed by the Assessing Officer." As is evident from the provisions of the Act, the Income-tax Officer computes the income while making an assessment under section 143(3) or under section 144. If the assessment is the subject matter of the appeal and the assessment is modified, the Assessing Officer gives effect to the order of the appellate authority. Therefore, one has to ascertain the income as computed by the Assessing Officer going by the plain language used in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of fee by not linking the same to the modification of the assessed income by the appellate authorities. The assessed income as computed by the Assessing Officer having been chosen as the base for payment of fee, the intention of the Legislature has got to be given effect to without venturing to find out as to what would be the reasonable amount of fee payable by the assessee as appeal fee to the Tribunal. It may also be pertinent to mention that the Legislature, in its wisdom, has not linked the fee payable by the assessee to the income contested in appeal, but has linked the same to the income as computed by Assessing Officer. If the provisions incorporated by the Legislature does not seem to be reasonable as per the wisdom of the court or Tribunals, the Legislature is free to incorporate an amendment so as to rationalize the payment of fee to the Tribunal. However, as the law stands as of now, the assessee is required to pay the fee on the basis of the income as computed by the Assessing Officer at the time of making the assessment. 17. I accordingly concur with the view expressed by the Ld. Accountant Member and hold that the assessee is required to pay the fee on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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