http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: 2THE COMMISSIONER OF INCOME-TAX, BOMBAY.

       Vs.

RESPONDENT: M/s.  FILMISTAN LTD.

DATE OF JUDGMENT: 21/02/1961

BENCH: SHAH, J.C. BENCH: SHAH, J.C. KAPUR, J.L. HIDAYATULLAH, M.

CITATION:  1961 AIR 1134            1961 SCR  (3) 893

ACT: Income-tax-Penalty  for  failure to  pay  tax-Appeal  within time-Tax due paid after the period of Limitation--Appeal  if barred  Indian  Income-tax Act, 1922 (11 Of 1922),  ss.  30, sub-ss. (1) and (2), 46(1).

HEADNOTE: Against  an  order imposing penalty under s.  46(1)  of  the Indian  Income-tax  Act  on account of  failure  to  pay  an instalment  of Income-tax, an appeal was preferred.   Though the  memorandum of appeal was presented with the  period  of limitation, the tax was paid after the period of  limitation prescribed for presenting the appeal had expired. Held,  that  the expression " No appeal shall lie "  in  the proviso to S. 30(2) of the Indian Income-tax Act means  that the appeal cannot be held to be properly filed until the tax is  paid,  and  not  that no memorandum  of  appeal  may  be presented. The effect of proviso to s. 30, sub-s. (1) read with  sub-s. (2) of the Act is that the appeal will be deemed to be filed on  the date when the tax due is paid and the question  will then  have to be decided whether there is  sufficient  cause for condonation of delay.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 451 of 1960. Appeal from the judgment and order dated September 18, 1957, of the Bombay High Court in I.T.R. No. 8 of 1957. K.   N. Rajagopal Sastri and D.  Gupta, for the appellant. 894 Bishan  Narain, S. N. Andley, J. B.   Dadachanji,  Rameshwar Nath and P. L. Vohra, for the respondent,. 1961.  February 21.  The Judgment of the Court was delivered by KAPUR, J.-This is an appeal pursuant to a certificate of the High  Court of Bombay under s. 66A(2) of the Indian  Income- tax  Act (hereinafter called the " Act ").  For the year  of assessment  1949-50 the respondent was assessed to a sum  of Rs.  1,80,646/14/  as income-tax and super-tax  on  June  2,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

1954.  A notice of demand under s. 29 of the Act was  served on  the respondent to pay that amount on or before July  17, 1954.  On his application the respondent was allowed to  pay by instalments.  The last instalment of Rs. 30,646/14/-  was payable on or before March 20, 1955.  As there was a default in the payment of this instalment the Income-tax Officer  on March  31,  1955 imposed a penalty of Rs.  3,000/  under  s. 46(1) of the Act.  On April 20, 1955 the respondent filed an appeal  to the Appellate Assistant Commissioner but by  that date  the last instalment had not been paid and it was  paid on   May  16,  1955.   The  Income-tax  Officer   raised   a preliminary   objection  before  the   Appellate   Assistant Commissioner that the appeal was not competent ’because  the last  instalment  of the tax had not been  paid.   This  was upheld  by  the Appellate Assistant  Commissioner.   Against this  order the respondent took an appeal to the  Income-tax Appellate  Tribunal which held that the right of appeal  was conferred by s. 30(1) of the Act and is not taken away by s. 30(2)  of  the Act, only the remedy is barred.   It  further held  that  as the right had not been destroyed  the  appeal became good appeal as soon as the assessee paid the  arrears of  tax and the only effect of the payment on May 16,  1955, was  that the appeal shall be taken to have  been  preferred before the Appellate Assistant Commissioner on that date and it  was  then for the Appellate  Assistant  Commissioner  to decide  whether it was a fit case for extension of time  and condonation  of delay. The Tribunal therefore directed  the. Appellate Assistant Commissioner to dispose of the appeal in accordance with law.  At the instance of the Commissioner 895 of Income-tax, who is. the appellant before us, the Tribunal stated the following question of law to the High Court:- "  Whether the appeal filed before the  Appellate  Assistant Commissioner  on  20th  April, 1955,  became  a  proper  and complete   appeal  though  barred  by  limitation  and   the Appellate  Assistant  Commissioner should have  decided  the question of the condonation of delay ? " The  High  Court answered the question in  the  affirmative. The  Commissioner of Income-tax has come in  appeal  against this judgment. Appeals are provided against assessments under s. 30 of  the Act.   There  is  a, proviso to s. 30(1) in  regard  to  the payment of taxes in the following ’Words:               " Provided that no appeal shall lie against an               order  under  sub-section (1)  of  section  46               unless the tax has been paid." The controversy between the parties revolves round the words "  no  appeal shall lie." The contention  which  was  raised before  us was that these words mean 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 shall lie " in the  proviso is  not that no memorandum of appeal can be presented.   All that  it  means is that the appeal will not  be-held  to  be properly  filed  until  the  tax has  been  paid.   If,  for instance,  the  memorandum of appeal is filed ’on  the  20th day, i.e.,. 10 days before the period of limitation  expires and  the  tax is paid within the rest of the  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 after the period of limitation has expired it will be  taken to  have  been filed on the day when the tax  is  paid  even though  the memorandum of appeal was presented  earlier  and within  the period of limitation., The question,  will  then

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

have  to be decided whether there was sufficient  cause  for condonation  of delay and that is exactly what the  Tribunal had ordered 896 and  that in our opinion is the effect of the proviso to  s. 30(1)  read  with  sub-s. (2) of s. 30 of the  Act.   It  is unnecessary therefore to refer to the two cases referred  to by the High Court, i.e., Raja of Venkatagiri v. Commissioner of  Income-tax  (1) and Kamdar Brothers v.  Commissioner  of Income-tax (2). The appeal is without force and is therefore dismissed  with costs.                               Appeal dismissed.