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2016 DIGILAW 952 (KER)

Commissioner of Income-Tax v. Keerthi Agro Mills (P) Ltd.

2016-11-08

A.K.JAYASANKARAN NAMBIAR, A.M.SHAFFIQUE, ASHOK BHUSHAN

body2016
ORDER : A.K. Jayasankaran Nambiar, J. These unnumbered Income Tax Appeals have been placed before us pursuant to a reference order dated 25/06/2015 in Unnumbered Income Tax Appeal of 2015 (ZITA No. 359/2015). In the said reference order, the reference Court doubted the correctness of an order dated 10/08/2011 passed by this Court in ZITA No. 460/2011, wherein, it was observed as follows: "Registry has issued a query as to the court-fee payable under Schedule II 3C of the Court Fees and Suits Valuation Act in respect of the Income Tax Appeal filed by the department against the respondent-assessee pertaining to assessment for the year 2003-2004. The case of the appellant-department is that they have filed another appeal ITA No. 647/2009 against the very same respondent-assessee pertaining to the very same assessment wherein they have paid maximum court-fee of Rs. 10,000/-. That appeal is stated to have been already disposed of by this Court. This is another appeal filed against the order of the Tribunal for the very same year because against the first appellate order both the assessee and the department had filed appeals before the Tribunal which passed a common order in the two appeals pertaining to same assessment. What we notice from the above referred provision of the Court Fees Act is that maximum court-fee payable in respect of an appeal pertaining to assessment is only Rs. 10,000/-. The question to be considered is when two appeals are filed by the same party pertaining to the same assessment, which happens when cross-appeals are filed for the very same year by both the parties before the Tribunal, what is the court-fee payable for the appeals separately filed by the same party in respect of same assessment. Under the provisions of the Court Fees Act the maximum court-fee payable in respect of an appeal filed for an assessment year is Rs. 10,000/-. Demand of maximum court-fee in each of the two appeals filed against the same assessment, whether it be by the assessee or the department, in our view, amounts to violation of the provision of the 1 Statute. We, therefore, direct the Registry to verify whether ITA No. 647/2009 was filed by the department against the very same assessee for the very same assessment year and whether maximum court-fee of Rs. 10,000/- was paid there and if so, to number this appeal where department has already remitted Rs. We, therefore, direct the Registry to verify whether ITA No. 647/2009 was filed by the department against the very same assessee for the very same assessment year and whether maximum court-fee of Rs. 10,000/- was paid there and if so, to number this appeal where department has already remitted Rs. 500/- towards court-fee. 2. Registry is directed to collect court-fee as per the following guidelines, in respect of income tax appeals. (i) When two appeals are filed either by the assessee or by the department pertaining to assessment for the same year, the court-fee to be collected in one appeal is at the maximum rate provided in the Schedule i.e. Rs. 10,000/- and only Rs. 500/- should be collected in the appeal later filed for the same assessment year. (ii) If refund of court-fee is claimed or granted in respect of one of the appeals, refund to be granted is the court-fee paid at the rate of Rs. 500/- and not the court-fee paid in the connected appeal at the maximum rate provided in the Schedule. (iii) If both the assessee and department happens to file separate appeals against common orders of the Tribunal for the very same assessment year relating to the same assessee, then court-fee at the maximum rate should be collected from both the parties. In other words, the direction above referred applies only when both the appeals for the same assessment year are filed by the same party, whether it be the department or the assessee. Court-fee in penalty-appeals should be collected in the same way as in assessment appeals as stated above." 2. The reference Court, on perusing the provisions of Article 3(iii)(C) of Schedule II of the Kerala Court Fees and Suits Valuation Act, was of the view that when an appeal is filed before this Court, the court-fee specified therein, determined on the basis of the total income of the assessee computed by the Assessing Officer, at the rate as prescribed in Clauses (a), (b) and (c) is to be remitted. It was also found that Clause (d), being a residuary' clause, would apply to cases which are not covered by Clauses (a) to (c). It was also found that Clause (d), being a residuary' clause, would apply to cases which are not covered by Clauses (a) to (c). The referring Court was therefore of the view that as per the provisions of the Article 3(iii)(C) of the Kerala Court Fees and Suits Valuation Act, the court-fee specified therein had to be remitted for every appeal that is filed before this Court, and when two appeals in relation to the same assessment year are filed before this Court, the court-fee would have to be separately remitted in respect of each of the said appeals. Noticing that there was a difference in the view taken by the referring Court with the view that was taken by the earlier Bench, in its order dated 10/08 '2011 in ZITA No. 460/2011, the matter was referred before us to pronounce on the issue as to whether, when two appeals are filed by the Assessee/Revenue against a common order of the Appellate Tribunal, the full amount of court-fee prescribed for the appeals needs to be paid in respect of each of the appeals. 3. Before considering the legal issue in these matters, it would be profitable to briefly refer to the factual situation in each of the Income Tax Appeals which have been referred to us. 4. In ZITA No. 359/2015, the brief facts are that, aggrieved by an assessment order under Section 143(3) read with Section 147 of the Income Tax Act, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), which was substantially allowed. The Department, therefore, filed an appeal before the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals). Before the Appellate Tribunal, the assessee also filed cross-objections. The Income Tax Appellate Tribunal considered both, the appeals preferred by the Department as also the cross-objection of the assessee, and found in favour of the assessee on the issue of re-opening of assessment by the Department by holding that the re-assessment under Section 147 of the Income Tax Act was not justified, and further, that the notice issued to the assessee under Section 148 of the Income Tax Act had been issued beyond the prescribed period of four years. The appeal preferred by the Department was therefore dismissed, and the Cross-objection of the assessee also dismissed as infructuous. The appeal preferred by the Department was therefore dismissed, and the Cross-objection of the assessee also dismissed as infructuous. It is against the common order of the Tribunal in both the appeals that the Revenue has now filed the present appeals before this Court. 5. In ZITA No. 493/2015, the brief facts are that aggrieved by an assessment order under Section 143(3) read with Section 153 A of the Income Tax Act, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who partly allowed the appeal preferred by the assessee by granting certain reliefs. Against the order of the Commissioner of Income Tax (Appeals), both the assessee and the Revenue filed separate appeals before the Income Tax Appellate Tribunal. The Appellate Tribunal allowed the appeal filed by the Revenue and dismissed the cross-objection of the assessee. The assessee therefore filed separate appeals before this Court against the orders of the Appellate Tribunal, allowing the appeal of the Revenue as also dismissing the cross-objection preferred by the assessee. 6. In ZITA No. 145/2015, the assessee, aggrieved by an assessment order under Section 143(3) of the Income Tax Act, filed an appeal before the Commissioner of Income Tax (Appeals) which was partly allowed by the said authority. Against the order of the Commissioner of Income Tax (Appeals), both the assessee and the Revenue filed separate appeals before the Income Tax Appellate Tribunal. The Appellate Tribunal allowed the appeal filed by the assessee and dismissed the appeal filed by the Revenue. The Revenue has therefore come up in two separate appeals against the common order of the Income Tax Appel late Tribunal. 7. In ZITA No. 324/2015, the assessee, who was aggrieved by an intimation issued to him under Section 143(1) of the Income Tax Act, which did not grant him interest on tax amounts that were found to be refundable to him under the Income Tax Act, preferred an appeal before the Commissioner of Income Tax (Appeals) against the said intimation. The Commissioner of Income Tax (Appeals) dismissed the appeal after finding that the assessee was not entitled to interest on the amounts refunded to him. The Commissioner of Income Tax (Appeals) dismissed the appeal after finding that the assessee was not entitled to interest on the amounts refunded to him. In a further appeal preferred by the assessee before the Income Tax Appellate Tribunal, the order of the Commissioner of Income Tax (Appeals) was set aside by the Tribunal which allowed the appeal preferred by the assessee and directed the Assessing Officer to grant interest to the assessee on the amounts refunded to him. It is seen that the Revenue has since filed an appeal before this Court against the said order of the Income Tax Appellate Tribunal. 8. Pursuant to the aforementioned order of the Income Tax Appellate Tribunal, the Assessing Officer gave effect to the order passed by the Appellate Tribunal. In the meanwhile, however, a scrutiny assessment under Section 143(3) was also completed against the assessee by finding that the assessee was liable to pay additional amounts by way of tax for the assessment year in question. In an appeal preferred by the assessee against the said order before the Commissioner of Income Tax (Appeals), the contentions of the assessee were partly allowed by the First Appellate Authority. Against the said order of the Commissioner of Income Tax (Appeals), the assessee and the Revenue filed separate appeals before the Appellate Tribunal, which were subsequently heard and disposed by the Appellate Tribunal. During the pendency of the appeals before the Tribunal, the Commissioner of Income Tax (Appeals) passed an order dated 20/12/2006 under Section 143(3) read with Section 263 of the Income Tax Act. Aggrieved by the said order, the assessee filed an appeal before the income Tax Appellate Tribunal. The Income Tax Appellate Tribunal disposed the batch of appeals preferred by the assessee, relating to the issue of grant of interest on tax amounts found to be refundable to the assessee, by allowing the appeals after relying on its own earlier decision in favour of the assessee on the same issue. The Appellate Tribunal also remanded the matter to the Assessing Officer to recompute the refundable tax and interest due to the assessee. The Revenue has come up in separate appeals challenging the said common order passed by the Appellate Tribunal. 9. The Appellate Tribunal also remanded the matter to the Assessing Officer to recompute the refundable tax and interest due to the assessee. The Revenue has come up in separate appeals challenging the said common order passed by the Appellate Tribunal. 9. It will be seen from a perusal of the facts in the above cases that the Revenue, in ZITA No. 145/20151, ZITA No. 324/2015 and ZITA No. 359/2015 has filed separate appeals against the common orders of the Appellate Tribunal that decided appeals filed before it by both the Revenue and the assessee. Similarly, in ZITA No. 493/2015, it is the assessee who has come up through separate appeals against a common order of the Appellate Tribunal that allowed the appeals filed by the Revenue before it and dismissed the cross-objection filed by the assessee before it. The issue in all these cases is whether, having paid the entire court-fee applicable in respect of an appeal against an order of the Appellate Tribunal, in one of the appeals pertaining to the assessment year in question, there was a necessity for the appellant before this Court, to pay the full court-fee for the second appeal filed against the common order of the Appellate Tribunal also, or whether the appellant, be it the assessee or the Revenue, could maintain the second or subsequent appeal arising out of the same common order of the Tribunal by paying the reduced court-fee of Rs.500/- prescribed in Clause (d) of Article 3(iii)(C) of Schedule II to the Kerala Court Fees and Suits Valuation Act. 10. We have heard the learned Senior Counsel Sri. P.K. Ravindranath Menon on behalf of the Revenue in these cases as also Sri. Arun Raj S., counsel for the assessee in ZITA No. 493/2015. 11. On a consideration of the facts and circumstances of each case, as also the submissions made across the bar, and on considering the views taken in the Division Bench decisions placed before us, we find that the provisions of Article 3(iii)(C) of Schedule II to the Kerala Court Fees and Suits Valuation Act, as it stood at the relevant time, read as under: 3. Memorandum of appeal from an order inclusive of an order determining any question under Section 47 or Section 144 of the Code of Civil Procedure, 1908, and not otherwise provided for when presented- (i) xxxxxxxxxxxx (ii) xxxxxxxxxxxx (iii) to the High Court- (A) xxxxxxxxxxxx (B) xxxxxxxxxxxx (C) From an order of the Appellate Tribunal under the Income Tax Act, 1961 or the Wealth Tax Act. 1957 – (a) Where the Joint income of the assessee as computed by the Assessing Officer, in the case to which the appeal relates is one lakh rupees or less. Five hundred rupees (b) Where such income exceeds one but does not exceed two lakh rupees lakh rupees One thousand and five hundred rupees. (c) Where such income exceeds two lakh rupees One per cent of the assessed income, subject so a maximum often thousand rupees. (d) Where the subject-matter of an appeal relates to any matter, other than those specified in sub-clauses (a) to (c) above Five hundred rupees It will be apparent from a reading of the said provision that what is contemplated is that la fee is to be paid for every appeal filed against an order of the Appellate Tribunal. The requirement of payment of fee, therefore, is in respect of every appeal that is filed against an order of the Appellate Tribunal. The basis of computation of the fee payable for an assessment appeal is the income that is assessed in the assessment order which gave rise to the appeal before the Income Tax Appellate Tribunal, and consequently, to the appeal before this Court. It is relevant to note at this stage that the requirement of filing separate appeals, as also cross-objections, before the Income Tax Appellate Tribunal is to enable an adjudication before the said Appellate Authority of the issues that are covered by the individual appeals and cross-objections. The issues covered in the appeal and cross-objection need not be the same. It is only consequent to the filing of an appeal that the Appellate Tribunal is called upon to decide the particular issues that are the subject-matter in the appeal. The issues covered in the appeal and cross-objection need not be the same. It is only consequent to the filing of an appeal that the Appellate Tribunal is called upon to decide the particular issues that are the subject-matter in the appeal. Consequently, unless there are separate appeals filed by the Revenue as well as the Assessee against a common order of the First Appellate Authority that grants only part of the relief claimed by the appellant before it, all the issues that were before the authority that decided the first appeals, would not come up for consideration before the Appellate Tribunal, which is the Second Appellate Authority. The payment of a separate appeal fee, in respect of each appeal that is filed against a common order is therefore, for the purposes of determining the particular issues that are covered in the individual appeals. It follows, therefore, that when two or more appeals are necessitated against a common order of the Appellate Tribunal, each appeal would have to be considered separately for the purposes of payment of the appeal fee as contemplated under the Kerala Court Fees and Suits Valuation Act. We do not find the words of the Kerala Court Fees and Suits Valuation Act, and in particular, Article 3(iii)(C) to Schedule II of the said Act as admitting of any restricted interpretation, as observed by the Division Bench of this Court in the order dated 10/08/2011 in ZITA No. 460/2011. In this connection, we note that the reference order takes note of the decision of a Division Bench of this Court in Commissioner of Income Tax v. Kerala State Industrial Development Corporation, 2012 KHC 562 : 2012 (3) KLT 497 , wherein, the Court opined that in all cases where the appeal is against determination of the total income, that is to say, in all assessment appeals, court-fee is payable on the total income of the assessee as computed by the Assessing Officer. Such appeals would fall in sub-clause (a), (b) or (c) of Article 3(iii)(C) depending upon the total income assessed. However, all other appeals, including penalty appeals, filed against various orders under the IT Act, would fall under the residuary provision, viz., sub-clause (d) of Article 3(iii)(C). We are of the view that this is a correct statement of the law. Such appeals would fall in sub-clause (a), (b) or (c) of Article 3(iii)(C) depending upon the total income assessed. However, all other appeals, including penalty appeals, filed against various orders under the IT Act, would fall under the residuary provision, viz., sub-clause (d) of Article 3(iii)(C). We are of the view that this is a correct statement of the law. Resultantly, we hold that when separate appeals are filed against a common order of the Appellate Tribunal, the full court-fee as contemplated under Article 3 (iii)(C) would have to be paid in respect of each of the appeals, notwithstanding that it pertains to the same assessment year under the Income Tax Act. In the cases before us, we note that the fee to be paid in respect of the appeals would be covered by one of the Clauses, namely (a), (b) or (c) of Article 3(iii)(C), as applicable, and Clause (d), which is the residuary clause, would not apply to the appeals before us. The issue referred is answered accordingly.