K. Raveendranathan Nair v. Commnr. of Income Tax & Ors
[Citation -2015-LL-0908-36]

Citation 2015-LL-0908-36
Appellant Name K. Raveendranathan Nair
Respondent Name Commnr. of Income Tax & Ors.
Court SUPREME COURT
Relevant Act Income-tax
Date of Order 08/09/2015
Judgment View Judgment
Keyword Tags memorandum of appeal • net wealth • right to appeal • state government
Bot Summary: In the State of Kerala the law of court fee is governed by the Kerala Court Fees and Suits Valuation Act, 1959(hereinafter referred to as 'Act,1959'). While the validity of the aforesaid order of the High Court is to be tested, another aspect is highlighted by the High Court in the concluding paras of the judgment. The vested right of appeal subsequently conferred under Section 260A of the Income Tax Act is so far as payment of court fee is concerned is taken away by necessary implication. We accordingly hold that in all appeals filed by the Commissioner of Income tax or in any appeal to be filed either, by the Revenue or by the assessee under the Income Tax Act and under the Wealth Tax Act against the orders of the Income Tax Appellate Tribunal from 26.10.2002 Court fee is payable and has to be paid under Section 52A r/w Schedule II Article 3 item sub-item(C) of the Kerala Court Fees and Suits Valuation Act, inserted by the Kerala Court Fees and Suits Valuation Act, 2003 the view expresses in the office note is sustained and the objection raised by the appellant to the contrary is overruled. Section 52A provided for the court fee payable on the memorandum of appeal filed before the High Court against orders of the Income Tax Appellate Tribunal under the Income Tax Act and the Wealth Tax Act. Further, though the legislative has got the power to fix the court fee on appeal on some reasonable basis, in a third appeal from the point of view of the assessee, second appeal from the point of view of the revenue what is the significance for the total income assessed The total income assessed by the assessing officer may or may not survive at the time when the appeal is filed before the High Court. Under the Kerala Court Fees and Suits Valuation Act court fee is payable on the relief claimed in the appeal.


1 ITEM NO.101 COURT NO.14 SECTION IIIA S U P R E M E C O U R T O F I N D I RECORD OF PROCEEDINGS Civil Appeal No(s). 3131/2006 K. RAVEENDRANATHAN NAIR Appellant(s) VERSUS COMMNR. OF INCOME TAX & ORS. Respondent(s) (with office report) WITH C.A. No. 3130/2006 (With Office Report) Date : 08/09/2015 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Mr. K. Radhakrishan, Sr. Adv. Mr. S. Udaya K. Sagar, Adv. Ms. Bina Madravan, Adv. Mr. M. Singh, Adv. for M/s. Lawyer S Knit & Co,Adv. Mr. B. V. Balaram Das,Adv. For Respondent(s) Ms. Rekha Pandey, Adv. Mr. Ritin Rai, Adv. Ms. Meenakshi Grover, Adv. Mr. Anil Katiyar, Adv. Mr. Ramesh Babu M. R.,Adv. UPON hearing counsel Court made following O R D E R By amendment in Income Tax Act in year 1998 Section 260A was inserted in Act providing for statutory appeal against Signature Not Verified Digitally signed by orders passed by Income Tax Appellate Tribunal. ASHWANI KUMAR Date: 2015.09.12 In this 10:59:39 IST Reason: very Section under Sub-Section(2)(b) court fees on such appeals was also prescribed which was fixed at Rs.2,000/-. However, Sub-Section 2 (2)(b) of Section 260A prescribing aforesaid fee was omitted by amendment carried out in said Act w.e.f. 1.6.1999. It was presumably for reason that insofar as court fee payable on such appeals are concerned, which are to be filed in High Court, it is State Legislature which is competent to legislate in this behalf. In State of Kerala law of court fee is governed by Kerala Court Fees and Suits Valuation Act, 1959(hereinafter referred to as 'Act,1959'). Section 52 thereof relates to fee payable in appeals. Thus, with omission of clause(b) of Sub-section(2) of Section 260A in Income tax Act, fee became payable on such appeals as per Section 52. State Legislature thereafter amended aforesaid Act, 1959 by amendment Act of 2003 and inserted Section 52A therein which was passed on 6.3.2003. In fact, before that ordinance was promulgated on 26.10.2002 which was replaced by aforesaid Amendment Act. Act categorically provided that Section 52A is deemed to have come into force on 26.10.2002. As per amended provisions viz. Section 52A of Act, 1959, fee on memorandum of appeals against order of Income Tax Appellate Tribunal or Wealth Tax Appellate Tribunal is to be paid at rates specified in sub-item(c) of item (iii) of Article 3 of Schedule II. Sub-item(c) of item (iii) of Article 3 of Schedule II reads as under: (c)Where such income exceeds two One percent of assessed lakh rupees income, subject to maximum of ten thousand rupees. 3 It is clear from above that fee is now payable, where such income exceeds two lakh rupees, @ 1% of 'assessed income' subject to maximum of ten thousand rupees. question that arose for consideration before High Court in impugned judgment against which these appeals arise, was payment of fee as per aforesaid schedule on appeals that are filed on or after 26.10.2002. As per State of Kerala, all appeals which are filed against order of Income Tax Tribunal or Wealth Tax Appellate Tribunal on or after 26.10.2002 fee is payable as per aforesaid amended provisions. appellant herein, however, contended that all those cases which were even pending before lower authorities i.e. Assessing Officer, Commissioner of Income Tax (Appeals) or Income Tax Appellate Tribunal and orders were passed even before 1.10.1998, right to appeal had accrued w.e.f. 1.10.1998 and, therefore, such cases would be governed as on date when orders were passed by lower authorities and court fee would be payable as per unamended provisions. High Court has not accepted this plea of appellant and has held that any appeal 'filed' on or after 26.10.2002 shall be governed by Section 52A of Act,1959. While validity of aforesaid order of High Court is to be tested, another aspect is highlighted by High Court in concluding paras of judgment. It has noticed that court fee which is payable @1% is on 'assessed income' i.e income which was assessed by Adjudicating Officer/Assessing Officer meaning thereby fee is not to be paid on amount which is 4 subject matter of appeal. In this behalf, High Court has given illustration namely where income is assessed by Assessing Officer in sum of Rs. 10 lakhs but dispute is only in respect of some addition to tune of Rs.10,000/-, as per aforesaid provisions court fees have to be calculated on Rs.10 lakhs which seems to be absurd situation. Following comments are made by High Court on aforesaid aspect: 30. As we have already held State Legislature had clearly manifested is intention by use of expressions fee payable on Memorandum of Appeal filed in Section 52a. vested right of appeal subsequently conferred under Section 260A of Income Tax Act is so far as payment of court fee is concerned is taken away by necessary implication. In other words, provision of section 52A of Court Fees and Suits Valuation Act inserted by Amendment Act of 2003 in that sense has retrospective operation thereby affecting earlier assessment also. 31. We accordingly hold that in all appeals filed by Commissioner of Income tax or in any appeal to be filed either, by Revenue or by assessee under Income Tax Act and under Wealth Tax Act against orders of Income Tax Appellate Tribunal from 26.10.2002 Court fee is payable and has to be paid under Section 52A r/w Schedule II Article 3 item (iii) sub-item(C) of Kerala Court Fees and Suits Valuation Act, inserted by Kerala Court Fees and Suits Valuation (Amendment) Act, 2003 view expresses in office note is sustained and objection raised by appellant to contrary is overruled. We place on record our deep appreciation for valuable assistance rendered by Sri V.K. Beeran, learned Addl. Advocate General, Sri P.K.R. Menon, learned senior standing counsel for Revenue and Sri P. Balachandran, who has been specially requested by court for assistance. 32. Before parting with matter, we would 5 like to pint out something about legislative draftsmanship in enacting Section 52A and Schedule II Article 3 item (iii) sub-item (c) particularly to Schedule portion inserted by Kerala Court Fees and Suits Valuation (Amendment) Act, 2003. Section 52A provided for court fee payable on memorandum of appeal filed before High Court against orders of Income Tax Appellate Tribunal under Income Tax Act and Wealth Tax Act. Under Income Tax Act, tax is on total income assessed whereas under Wealth Tax Act tax is on net wealth assessed. Schedule II Article 3, item (iii) sub-item(C) though refers to both enactments court fee is based on 'total income' of assessee and computed by assessing Officer. How can it apply to appeals filed under Wealth Tax Act where 'total income' has nothing to do with in matter of assessment? Can any court fee be demanded in wealth tax appeal based on said schedule entry? Is there not ambiguity in this regard? 33. Further, though legislative has got power to fix court fee on appeal on some reasonable basis, in third appeal (Appeal before High Court) from point of view of assessee, second appeal from point of view of revenue what is significance for total income assessed? total income assessed by assessing officer may or may not survive at time when appeal is filed before High Court. There may be not even have any dispute with regard to total income assessed not varied. Still, what it logic in fixing court fee on appeal based on total income? It is something like, in civil appeal filed by party, court fee is fixed on entire value of assets held by that party though subject matter of appeal is only small item of assets. Under Kerala Court Fees and Suits Valuation Act (Sections 51 and 52 Explanation I) court fee is payable on relief claimed in appeal. What is reason for this change in Section 52A. Was it is intention of legislature that in respect of appeal against penalty orders where huge stakes are involved, sub-clauses (C)(b) and (a) of sub-item (C) of item (iii) of Article 3 of Schedule II is to be made applicable or irrespective of reliefs sought, fixed court fee of Rs.500/- under sub-clause (d) of sub-item (c) of item (iii) of Article 3 of Schedule II alone need be paid? There are all matters which required urgent attention of 6 State Government and if it is considered necessary appropriate amendment has to be made urgently to make provision beyond any doubt. Now that State legislature by inserting section 73A by Amendment Act 2003 exempted State and its Officers from payment of Court fees in official matters whether such treatment can be extended to Central Government and its officials in official matters consistent with scheme of Income Tax Act and Wealth Tax Act is also matter for consideration by State Government. aforesaid order was passed on 8.3.2004 i.e. more than 11 years ago. It appears that till date no remedial steps are taken even when High Court directed that copy of said order be sent to Chief Secretary to State for perusal and follow up action. In these circumstances, we have inquired from learned counsel appearing for State of Kerala as to whether any decision was taken on aforesaid recommendation of High Court. Learned counsel wants sometime to seek instructions. Insofar as main issue is concerned, we have heard learned counsel for parties for sometime. However, in order to have holistic view in matter, we would also like to know steps that are taken by State Government on aspect mentioned above. List matters after six weeks as part-heard. However, in meantime, status quo order which was passed on 23.4.2007 shall continue to operate. (Ashwani Thakur) (Renu Diwan) COURT MASTER COURT MASTER K. Raveendranathan Nair v. Commnr. of Income Tax & Or
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