Law:

Section:

Section 246, read with section 221 of the Income-tax Act, 1961 [Corresponding to section 30(1), read with section 46(1) of the Indian Income-tax Act, 1922] - Commissioner (Appeals) - Appealable orders - Assessment year 1948-49 - Whether first proviso of section 30(1) of 1922 Act should not be interpreted to mean that an appeal shall not be presented against an order under section 46(1) of 1922 Act unless tax has been paid previously - Held, yes - Assessee did not pay entire tax in respect of which penalty under section 46(1) of 1922 Act was imposed on him - Whether it could not be said that no appeal lay to AAC under section 30(1) of 1922 Act against penalty imposed under section 46(1) of 1922 Act - Held, yes FACTS For the relevant assessment year, the assessment of the assessee-HUF was completed and a notice of demand was also issued. An appeal was pending against assessment order. Since the assessee had not paid the tax due to be paid, the ITO imposed a penalty under section 46(1). On appeal the AAC held that no appeal lay to him under section 30(1) against the penalty imposed under section 46(1) as the assessee had not paid the entire tax, in respect of which the penalty under section 46(1) had been imposed. On second appeal, the Tribunal confirmed the order of the AAC. On reference: HELD If the legislature contemplated that no appeal shall be presented against an order under sub-section (1) of section 46 unless the tax had been paid, there appears to be no reason why the Legislature did not use apt language to that effect. It could not, therefore, be said that the first proviso to section 30(1) should be interpreted to mean that an appeal shall not be presented against an order under sub-section (1) of section 46 unless the tax has been paid previously. In the instant case, it was to be held that in the circumstances of the case the appeal preferred by the assessee against the penalty imposed under section 46(1) was competent and the AAC was wrong in law in holding that the appeal was not competent on that date. Note: The case was decided in favour of the assessee. CASES REFERRED TO Mussummat Durga Chowdhrani v. Jawahar Singh Chowdhuri [1890] 17 IA 122…

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