TMI Blog1961 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment years 1945-46, 1946-47 and 1947-48 the assessee was assessed on income shown as below: Year Income Rs. Under section Date of 1945-46 65,667 23(3)/34 28-2-1950. 1946-47 25,762 do. do. 1947-48 90,343 do. do. Demand notices were sent for the tax due from the assessee but the demand not having been satisfied the following orders of penalty were passed under section 46(1) of the Act on October 1, 1951: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and in the circumstances of this case the Tribunal was justified in holding that the appeals preferred by the assessee before the Appellate Assistant Commissioner against the imposition of penalty under section 46(1) of the Income-tax Act were incompetent on the ground that the taxes for the non-payment of which the penalty was imposed had not been paid on or before the date on which the appeals were filed? We have heard learned counsel for the assessee as also for the department. The relevant portions of section 30 which are material for the decision of the case before us read as follows: Any assessee objecting to...any penalty imposed by an Income-tax Officer under sub-section (6) of section 44E or sub-section (5) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso is that the right which has been so conferred by the main clause remains ineffective so long as the tax is not paid. It is well known that the right of appeal is determined by and is dependent upon the nature of the cause and not by or upon the conduct of a party. The effect of reading the main clause along with the proviso is that though the right of filing an appeal exists and the cause qualifies for an appeal, the appellant due to his conduct of not paying the tax remains disqualified from enforcing that right. No sooner the disqualification is removed the right becomes enforceable. The legislature in the proviso did not use the words no appeal shall be entertained but used a much more doubtful expression no appeal shall lie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless the tax is paid. The tax becomes payable only after the service of a notice under section 29 of the Act. Section 30(2) provides that an appeal shall be filed ordinarily within 30 days from the receipt of the notice of demand. Consequently, the right of appeal accrues on the date when the notice is received by an assessee and limitation for filing an appeal begins to run from that date. In our opinion if the appeal is filed within the period of limitation, even though the tax has not been paid, there would be no bar to its entertainment and on the date of hearing the Appellate Assistant Commissioner would have to determine whether the appeal is effective and any relief can be given under it by seeing whether the tax has been paid or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he merits of the controversy or the nature of the cause on the basis of which alone the right of appeal depends. In our judgment it is not possible to construe this rule of public policy and convenience so as to destroy the right altogether and it should be so read as to harmonise with the right of appeal and yet implement the intention of the legislature to provide for an easy recovery of the tax. It is well established that statutes pertaining to the right of appeal should be given a liberal construction in favour of the right since they are remedial and the right should not be restricted or denied unless such a construction is unavoidable and in case of doubt the same should be resolved in favour of the right of appeal (see Statutory Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been allowed. We do not think that it is necessary in this case to decide as to whether the effect of the setting aside of the assessments would be that no tax was at all due from the assessee in the eye of law at any time and consequently, the assessee cannot be deemed to have been in arrears of tax. On this question we would prefer to express no opinion, but for the reasons which we have already mentioned for holding that, if the payment of the tax is made up to, or that there are no arrears on, the date of hearing of the appeals, the proviso would not stand in the way of the appeals being heard, we answer this reference in the negative and hold that the appeals before the Appellate Assistant Commissioner against the orders imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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