IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.8914-8922 OF 2003

Commissioner of Income Tax, Indore            ...Appellant(s)

Versus

Pawan Kumar Laddha                       ...Respondent(s)

J U D G M E N T

S.H. KAPADIA,J.

At the hearing of the appeal filed by the assessee  

before the Income Tax Appellate Tribunal against the order  

under Section 158BC of the Income Tax Act, 1961, the Revenue  

raised a preliminary objection as to the maintainability of  

the appeal on the ground that the assessee having not paid  

the  admitted  tax  before  filing  the  appeal,  the  appeal  

preferred by him should be dismissed as not maintainable.  In  

this connection, reliance was placed by the Department in  

support of it's preliminary objection on Section 249(4)(a) of  

the  Income  Tax  Act,  1961  [`1961  Act',  for  short].   The  

Revenue invited the attention of the Income Tax Appellate  

Tribunal [`Appellate Tribunal', for short] to letter dated  

19th October, 2001, wherein it was stated that the assessee  

had paid a sum of  Rs.22,63,600/- before filing of the appeal

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out of Rs.26,47,800/- payable by the assessee in terms of his  

Block Returns.  Before the Appellate Tribunal, the assessee  

objected to the above contention of the Department on the  

ground that Section 249(4) of 1961 Act cannot be read into  

Section  253(1)(b)  which  deals  with  the  Appeals  to  the  

Appellate  Tribunal  and  which  falls  in  Chapter  XX(B).  

According  to  the  assessee,  Section  249,  which  deals  with  

Appeals  to  the  Commissioner  (Appeals),  falls  in  Chapter  

XX(A),  whereas  Appeals  to  the  Appellate  Tribunal  under  

Section 253(1)(b) falls in Chapter XX(B).

After  going  through  the  provisions  of  Section  

249(4)(a) and Section 253(1)(b) of 1961 Act, which, at the  

relevant time, dealt with an order passed by the Assessing  

Officer under Section 158BC(c) of 1961 Act, the Appellate  

Tribunal held that one cannot read Section 249(4)(a) into the  

provisions  of  Section  253(1)(b)  of  1961  Act;  that  while  

Section  253(1)  was  an  enabling  provision  giving  right  of  

appeal to the assessee to file an appeal to the Appellate  

Tribunal,  there  was  no  provision  similar  to  Section  

249(4)(a), which fell in Chapter XX(A) in Section 253(1)(b),  

hence, it was not a condition mandatory to the filing of the  

appeal to the Appellate Tribunal to pay undisputed tax amount  

as  condition  precedent.   Consequently,  according  to  the  

Appellate Tribunal, there was no merit in the contention of  

the Department that an assessee must pay the admitted tax due  

before or at the time of filing of the appeal before the  

Appellate Tribunal.   

Aggrieved by the decision of the Appellate Tribunal  

on the preliminary objection raised by the Department, the  

matter was  carried in appeal  under Section 260A of 1961 Act

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by the Department to the High Court of Madhya Pradesh, Indore  

Bench, which has affirmed the view of the Appellate Tribunal.  

Hence, these civil appeals.

At  the  outset,  we  may  state  that,  in  these  civil  

appeals, we are concerned with Block Period 1986-1987 to 14th  

September, 1995.  This aspect is important because the law  

has since undergone several changes, particularly after 1st  

October,  1998,  in  the  matter  of  grant  of  stay  by  the  

Appellate Tribunal under Section 253(7) of 1961 Act, which  

sub-section did not exist during the relevant period.  Hence,  

this judgement is confined to the period prior to 1st October,  

1998.

None appears for the assessee, though served.

The  basic  argument  advanced  by  Shri  V.  Shekhar,  

learned senior counsel appearing on behalf of the Department,  

before us, was that Section 249(4), inter alia, states that  

no appeal under this Chapter [i.e., Chapter XX] shall be  

admitted unless at the time of filing of the appeal, the  

assessee has paid the admitted tax due on the income returned  

by him.  According to the learned counsel, the present case  

is covered by Section 249(4)(a) of 1961 Act inasmuch as the  

assessee, in the present case, did file his Block Return in  

which he declared his undisclosed income of Rs.26,47,800/-.  

The  assessee,  as  stated  above,  however,  paid  only  

Rs.22,63,600/- and  not the  full amount  of  Rs.26,47,800/-,  

hence, according to the Department, the appeal preferred by  

the  assessee  was  not  maintainable.   In  this  connection,  

learned counsel submitted that Chapter XX of 1961 Act dealt  

with Appeals and Revision.  That Chapter had different Heads  

at the relevant  time in the form  of Appeals to Commissioner

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(Appeals) [Heading `A'], Appeals to the Appellate Tribunal  

[Heading `B'], Reference to High Court [Heading `C'], Appeals  

to  the  Supreme  Court  [Heading  `D']  and  Revision  by  the  

Commissioner [Heading `E'] etc.  According to the learned  

counsel, in Section 249(4), the words used are “no appeal  

under `this Chapter' shall be admitted unless at the time of  

filing of the appeal, the assessee has paid the tax due on  

the income returned by him”.  The learned counsel emphasised  

the words “this Chapter” in Section 249(4) to mean the whole  

of Chapter XX and not Chapter XX(A) alone and, consequently,  

every appellant at the time of filing of appeal under Section  

253(1) to the Appellate Tribunal was required to pay the  

admitted tax due on the income returned by him in terms of  

Section 249(4)(a) of 1961 Act as condition precedent failing  

which  his  appeal  was  not  maintainable.   Consequently,  

according to the learned counsel, in the present case, since  

the assessee had failed to pay the tax due on the income  

returned by him, his appeal to the Appellate Tribunal under  

Section  253(1)(b)  should  have  been  dismissed  as  not  

maintainable.   

We find no merit in the above arguments.  At the  

outset, we may reiterate that, in these civil appeals, we are  

concerned with the period prior to 1st October, 1998.  This  

judgment is confined strictly to the Block Period 1986-1987  

to 14th September, 1995.

Chapter  XX  deals  with  “Appeals  and  Revisions”.  

Chapter XX is divided into Headings `A' to `F'.  Section 246  

enumerates a list of Orders of the Assessing Officer against  

which appeal(s) would lie.  In that list of Orders, an appeal  

to  the  Appellate  Tribunal  under  Section  253(1)  is  not

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mentioned.  This is a very important indicia to show that  

each Heading in Chapter XX deals with a different subject-

matter and one cannot read the words in Chapter XX(A) into  

the words used in Chapter XX(B).  Chapter XX(A) deals with  

Appeals to the Deputy Commissioner and Commissioner (Appeals)  

whereas Chapter XX(B) deals with Appeals to the Appellate  

Tribunal.  Similarly, Reference to the High Court lies under  

Chapter XX(C).  It is for this reason that we have come to  

the conclusion that each Heading is a stand-alone item and,  

therefore, one cannot read the provision of Section 249(4)(a)  

into Section 253(1)(b) of 1961 Act.  If the argument of the  

Department is to be accepted, then, in that event, no appeal  

or  Reference  could  lie  even  to  the  High  Court  without  

complying with the provisions of Section 249(4)(a) of 1961  

Act.  This cannot be the Scheme of Chapter XX of 1961 Act.  

There is one more reason why we are of the view that Section  

249(4)(a) cannot be read into Section 253(1)(b) of 1961 Act.  

Section 253(1)(b) refers to an assessee filing an appeal to  

the  Appellate  Tribunal  against  an  order  passed  by  an  

Assessing Officer under Section 158BC(c) of 1961 Act.  Sub-

section (b) came to be inserted into Section 253(1) by the  

Finance Act, 1995, and, that too, with effect from 1st July,  

1995.   The  very  concept  of  Block  Assessment  came  to  be  

inserted in the Income Tax Act, 1961, vide Finance Act, 1995,  

with  effect  from  1st July,  1995,  whereas  the  words  “this  

Chapter” in Section 249(4) came to be inserted in the Income  

Tax Act, 1961, vide Taxation Laws (Amendment) Act, 1975, with  

effect from 1st October, 1975.  This is one more reason to  

confine the  expression “this Chapter” in  Section  249(4) to

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Chapter XX(A) without it being extended to Section 253(1)(b)  

which is there in Chapter XX(B).  Further, under the Scheme  

of  Chapter  XX,  as  stated  above,  no  appeal  under  Section  

249(4)(a)  in  Chapter  XX(A)  was  admissible  without  the  

assessee  having  paid  the  admitted  tax  due  on  the  income  

returned by him.  It appears that once Section 249(4)(a) is  

treated as a mandatory condition for filing an appeal before  

Commissioner of Income Tax (Appeals) and once that condition  

stood  satisfied  at  the  time  of  his  filing  an  appeal  to  

Commissioner  of  Income  Tax  (Appeals),  then,  there  was  no  

necessity for the assessee to once again pay the admitted tax  

due as a condition precedent to his filing the appeal before  

the Appellate Tribunal under Section 253(1)(b) of 1961 Act.  

Lastly, one must keep in mind the principle that the doctrine  

of  incorporation  cannot  be  invoked  by  implication.   A  

provision  which  insists  on  the  assessee  satisfying  a  

condition of paying the admitted tax as condition precedent  

to his filing of appeal under Section 253(1)(b) of 1961 Act  

is a dis-enabling provision.  Such a dis-enabling provision  

must be clearly spelt out by the Legislature while enacting  

the statute.  The Courts have to be careful in reading into  

the Act such dis-enabling provisions as that would tantamount  

to judicial legislation which the Courts must eschew.  It is  

for the Parliament to specifically say that no appeal shall  

be filed or admitted or maintainable without the assessee(s)  

paying the admitted tax due.  That has been done only in the  

case of an appeal under Section 249(4)(a) of 1961 Act.  We  

cannot  read  such  a  dis-enabling  provision  into  Section  

253(1)(b)  of  1961  Act.   If  we  do  so,  we  are  judicially  

legislating

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by reading something into the Act which is not there.  In  

such a case, the question would also arise as to why the  

Appellate Tribunal should not be given the power to dispense  

with or waive such a condition?  All this would come in the  

realm  of  legislation  which  can  be  done  only  by  the  

Legislature.  Hence, we find no merit in these civil appeals  

filed by the Department.   

We are informed by the learned counsel appearing on  

behalf  of  the  Department  that,  since  the  question  of  

preliminary objection raised by the Department was pending  

determination in this Court, the Appellate Tribunal, Indore  

Bench, has, till date, not disposed of the appeal, bearing  

No.IT(SS) No.13/IND/1996, preferred by the assessee before  

it.  If that is so, we direct the Appellate Tribunal to  

dispose  of  the  assessee's  appeal,  bearing  No.IT(SS)  

No.13/IND/1996,  as  expeditiously  as  possible,  on  merits,  

within a period of three months from today.  The period of  

three  months  shall  be  counted  from  the  date  when  the  

Appellate  Tribunal  receives  this  order.   We  direct  the  

Registry  to  immediately  send  the  original  record  and  

proceedings to the Appellate Tribunal.  We express no opinion  

on the merits of the case.

Accordingly,  these  civil  appeals  filed  by  the  

Department are dismissed with no order as to costs.

......................J.               [S.H. KAPADIA]

......................J.               [SWATANTER KUMAR]

New Delhi, April 06, 2010.