Law:

Section:

In-come-tax Act (XI of 1922), S. 30(1), first proviso-Appeal -Order imposing penalty for non-payment of tax in time -Failure to pay tax before filing of appeal-Maintainability of appeal.   An appeal against the imposition of penalty under section 46(1) for non-payment of tax is not incompetent merely because the tax, for non-payment of which penalty was imposed, is not paid before the date of filing the appeal. The proviso to section 30(I) has to be interpreted in the context that by the main clause the right of appeal has been expressly con ferred. The true construction of section 30(1) is that the Legislature intended to confer a right of appeal in every case of imposition of penalty but qualified that right by saying that it shall not be effective unless the tax is paid. Therefore, even if the tax is paid on the date of hearing, the appeal would be competent and the case can be heard on the merits.   The rule "that no appeal shall lie unless the tax has been paid" is a rule of public policy meant to make the realisation of taxes easy and has got nothing to do with the merits of the controversy or the nature of the cause on the basis of which the right of appeal depends. This rule cannot be so construed as to destroy the right altogether and it should be so read as to harmonise with the right of appeal and yet to implement the intention of the Legislature to provide for an easy recovery of tax.   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 construction is unavoidable and in the case of doubt the same should be resolved in favour of the right of appeal. The Income-tax Act is a fiscal statute and if there is any doubt with regard to the interpretation of section 30 the same must be resolved in favour of the assessee.   A proviso must be strictly construed and its scope cannot be widened by adding some words to it which do not exist in it.   Commissioner of Income-tax v. Filmistan Ltd. (1958) 33 I T R 334 and Kamdar Brothers of Jharia v. Commissioner of Income-tax (1955) 27 I T R 176…