TMI Blog2009 (7) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... . H. BHATIA JJ. P. J. Pardiwala, Atul K. Jasani and Ms. Vandana Rawale for the petitioner. P. S. Sahadevan for the respondents. JUDGMENT The judgment of the court was delivered by <?xml:namespace prefix = st2 /> FERDINO I. REBELLO J . - Rule. Heard forthwith. 2. The principal question that arises for determination in this petition is what are the court fees payable by the assessee in preferring an appeal to the Appellate Tribunal under section 253(6) of the Income-tax Act, 1961, which hereinafter shall be referred to as "the Act". On behalf of the petitioner, learned counsel has submitted as under: 3. The petitioner had filed its return of income for the assessment year 2003-04 on December 1, 2003, in which return it claimed that it was entitled to carry forward a loss of Rs. 19,24,93,890. The petitioner's assessment was completed under section 143(3) by respondent No. 2 by his order dated February 17, 2006, by which order respondent No. 2 determined the business loss incurred by the petitioner at Rs. 7,18,78,768 and the long-term capital loss at Rs. 1,82,19,212 aggregating Rs. 9,00,97,980. In making the assessment respondent No. 2 disallowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be Rs. 500 in terms of section 253(6). The Tribunal, therefore, on its administrative side was wrong in rejecting the appeal for failure to pay proper court fees. 7. On the other hand, on behalf of the respondent-Revenue, it is submitted that this court should not exercise its writ jurisdiction, as an appeal shall lie to the High Court from every order passed by the Appellate Tribunal. As an appeal is an effective and efficacious legal remedy, this court ought not to exercise its extraordinary jurisdiction and consequently petition on this ground alone must be dismissed. 8. It is then contended that total income means "the total amount of income referred to in section 5 computed in the manner laid down in the Act. The computation process may result in positive income or loss as happened in the case of the petitioner. The total income was computed at Rs. 7,18,78,768 (loss). That will be the basis of payment of fees in appeal proceedings. There is, therefore, no infirmity in the finding by the Tribunal but as the income goes up the fees accordingly are higher. Similarly, when the loss goes up, the fees will also go on increasing. 9. For the purpose of deciding the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1992, changed the manner of computing the fee and it was provided that if the total income of the assessee as computed by the Assessing Officer in the case to which the appeal relates is rupees one lakh or less the fee payable would be Rs. 1,500. The circular explaining the provisions of the Finance Act, 1992 (see [1992 198 ITR (St.) 1, 50) being Circular No. 636, dated August 31, 1992, states thus: "52. The Finance Act has amended section 253 enhancing the fee to be paid for filing appeals before the Income-tax Appellate Tribunal. Under the pre-amended provisions of sub-section (6), an appeal to the Appellate Tribunal shall be in the prescribed format and shall be accompanied by a fee of Rs. 200. After the amendment, the fee will be Rs. 250, where the total income computed by the Assessing Officer is up to Rs. 1 lakh and Rs. 1,500 in cases where the total income as so computed is more than Rs. 1 lakh. The former type of cases would include cases where the total income computed by the Assessing Officer is a negative figure." 12. The Finance (No. 2) Act, 1998, once again amended section 253(6) and it was provided that if the total income was less than rupees one lakh, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount involved in dispute in appeal a suitable provision to that effect was made. For example, under Schedule 1 to the Bombay Court Fees Act, 1959, article 16 prescribed the fee payable on a reference application under section 256(2). The fee was one half of the ad valorem fee leviable on the amount in dispute. Likewise a fee payable when an appeal is preferred under section 260A is in terms of article 16A is to be computed having regard to the amount disputed in appeal. 15. If we, therefore, trace the legislative history, it is clear that court fees is based on total income of the assessee. Higher the total income, more the court fees payable. The only question is when the income is negative whether the expression "total income" should also be considered to be the loss. Learned counsel for the Revenue has placed before us the judgment of the Supreme Court. The Supreme Court by judicial interpretative process has held that income would include both profit and loss. The question, however, for consideration is the language of the provision. As an illustration in section 253(6)(a), the words used as "one hundred thousand rupees or less". In (b), the language used is "more tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me" as appearing in section 253(6). 18. In CIT v. J. H. Gotla [1985] 156 ITR 323 (SC), the assessee was claiming that the loss incurred by him in an earlier previous year from a business carried on by him should be permitted to be carried forward and set off against the income that arose to his wife and minor children which was clubbed with his income. The case of the Revenue was that such set off was not permitted as the set off was permissible only against the income of a business, profession or vocation carried on by the assessee in that year. The Supreme Court rejected this argument and held that it was permissible to set off the loss. In so doing it observed at page 338 of the report that "it can be accepted without much doubt that income would include loss". But from this observation it does not follow that the total income assessed in so far as the petitioner is concerned is in a sum in excess of rupees two hundred thousand so as to bring its case within the scope of clause (c). 19. The last decision of the Supreme Court in CIT v. P. Doraiswamy Chetty [1990] 183 ITR 559 merely follows the principle laid down in Gotla's case [1985] 156 ITR 323 (SC). The Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) and an inference should be drawn that it is the item in dispute that has to be considered for determining the amount of fee that is payable. In our opinion, such a contention is not permissible considering the clear language of clause (c). What has to be determined is the purpose for deciding the quantum of fee that has to be paid and what is the total income that is computed by the Assessing Officer for the year to which the appeal relates. It is that figure that determines the quantum of fee payable. Let us take an illustration cited on behalf of the petitioner. Take a case where an assessee declares a loss of Rs. 10 lakhs after claiming a deduction of Rs. 10,50,000 by way of interest. The Assessing Officer comes to the conclusion that the interest is to be disallowed. There fore he computes the total income of Rs. 50,000. In such a case even though the disputed amount on the appeal would be Rs. 10,50,000 but it is not the case of the respondents that the fee payable will be any amount other than Rs. 500 because the case falls within scope of clause (a). However assuming, the assessee had determined the loss of return of Rs. 13 lakhs which was arrived at by making the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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