The special bench of the Kolkata Tribunal in Bidyut Kumar Sett vs. Income-tax Officer (2005) 92ITR 148 S held that the Tribunal fee on an appeal against the order of penalty levied under section 271(1)(c) of the I.T. Act is governed by clauses (a) to(c) of section 253(6) of the Income-tax Act. Sub-section (6) of section 253 provide the following scale of fees for appeal to the Tribunal:-
“ (6) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made, on or after the 1st day of October, 1998, irrespective of the date of initiation of the assessment proceedings relating thereto, be accompanied by a fee of,—
(a) where the total income of the assessee as computed by the Assessing Officer, in the case to which the appeal relates, is one hundred thousand rupees or less, five hundred rupees,
(b) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than one hundred thousand rupees but not more than two hundred thousand rupees, one thousand five hundred rupees,
(c) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than two hundred thousand rupees, one per cent. of the assessed income, subject to a maximum of ten thousand rupees :
~(d) where the subject matter of an appeal relates to any matter, other than those specified in clauses (a), (b) and (c), five hundred rupees.
Provided that no such fee shall be payable in the case of an appeal referred to in sub-section (2) or a memorandum of cross-objections referred to in sub-section (4).”
The special bench held a view that there is a link or nexus or relationship between the assessment proceedings and the penalty proceedings hence it is required of the appellant to deposit a fee upto a maximum of Rs.10000 (at current scale of fee prescribed by the Act). Before such ruling came into force and even thereafter in some cases the registry require payment upto Rs.10000 for each filing. More importantly the registry at various benches of the Tribunal also insists for deposit of fees of Rs.10000 even in appeal matters relating to tax deduction at source. Even in stay applications at times the registry insists for payment of Rs. 10000 instead of the statutory sum of Rs. 500 under Rule 35A of the Appellate Tribunal Rules, 1963. On the contrary no fee is required to be paid by the Department of Revenue for filing such appeals.
Following is the extract (Para 54 of the Explanatory Circular on the Finance Act, 1999) from the CBDT Circular No 779 dated 14.9.1999. The circular clarifies that ITAT fees in TDS matters shall be Rs.500 only.
" 54. Rationalisation of provisions relating to reduction of litigation and other allied issues :
54.1 Finance (No. 2) Act, 1998 introduced a number of measures to reduce mounting litigation and delay in disposal of appeals under direct tax enactments. The major amendments included direct appeal to the High Court, introduction of a scale of fee payable before the Commissioner (Appeals) and enhancement of existing scale of fee payable before the Appellate Tribunal. These provisions have come into effect from the 1st day of October, 1998. A number of suggestions were received on the implementational aspects of these measures. Some of them required amendment of the relevant sections of the Income-tax Act to rationalise and streamline the provisions. The following amendments have been made by the Act in this regard : (i) The Finance (No. 2) Act, 1998, introduced a scale of fees for filing appeals before the Commissioner (Appeals) and also enhanced the existing scale of fee payable before the Appellate Tribunal under various direct tax acts. The fee payable under the Income-tax Act both before the Commissioner (Appeals) and the Appellate Tribunal is relatable to the assessed income. However, appeals are also filed on issues such as TDS defaults, non-filing of returns, etc. which may not have any nexus with the assessed income. The Act, therefore, has amended section 249 of the Income-tax Act to provide a fee of Rs. 250 for appeals before the Commissioner (Appeals) and Rs. 500 for appeals before the Appellate Tribunal for the residuary group of appeals which cannot be linked with the assessed income. [Sections 83 and 85]."
The Karnataka High Court in their recent decision in Rajkamal Polymers P. Ltd. v. CIT (2007) 291ITR314 held that the issue in a penalty appeal is not one relating to quantum of income, so that it should be treated as an appeal “in any other mater” under residual clause in section 253(6) of the Act, for which a flat rate of Rs. 500 has been prescribed. The High Court directed the Tribunal in this case to refund the excess paid along with interest @ 10% PA beyond 30 days from such order.
Earlier the Mumbai bench of ITAT in Amruta Enterprises vs. Deputy Commissioner of Income-tax (2003) 84ITD172 also held that in the context of penalty appeal the filing fee payable should be governed by clause (d) of sub-section (6) of section 253. AS per the bench clauses (a), (b) and (c) have particularly referred the quantum of total income on the basis of which filing fee is determined and the Legislature has not linked anywhere the quantum of total income with the amount of penalty. Therefore, it would be unfair and unjust to charge more fee from the appellant by enlarging the scope of such provisions. It particularly made reference to the CBDT Circular (supra) and the memorandum explaining the provisions so as to hold in the appellant’s case that it has deposited the proper filing fee in terms of section 253(6)(d) of Rs. 500.
Assessee’s who have therefore paid more than the required fee may approach the respective Tribunal for refund of excess payment made on the basis of this solitary decision of the Karnataka High Court.
“ (6) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made, on or after the 1st day of October, 1998, irrespective of the date of initiation of the assessment proceedings relating thereto, be accompanied by a fee of,—
(a) where the total income of the assessee as computed by the Assessing Officer, in the case to which the appeal relates, is one hundred thousand rupees or less, five hundred rupees,
(b) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than one hundred thousand rupees but not more than two hundred thousand rupees, one thousand five hundred rupees,
(c) where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than two hundred thousand rupees, one per cent. of the assessed income, subject to a maximum of ten thousand rupees :
~(d) where the subject matter of an appeal relates to any matter, other than those specified in clauses (a), (b) and (c), five hundred rupees.
Provided that no such fee shall be payable in the case of an appeal referred to in sub-section (2) or a memorandum of cross-objections referred to in sub-section (4).”
The special bench held a view that there is a link or nexus or relationship between the assessment proceedings and the penalty proceedings hence it is required of the appellant to deposit a fee upto a maximum of Rs.10000 (at current scale of fee prescribed by the Act). Before such ruling came into force and even thereafter in some cases the registry require payment upto Rs.10000 for each filing. More importantly the registry at various benches of the Tribunal also insists for deposit of fees of Rs.10000 even in appeal matters relating to tax deduction at source. Even in stay applications at times the registry insists for payment of Rs. 10000 instead of the statutory sum of Rs. 500 under Rule 35A of the Appellate Tribunal Rules, 1963. On the contrary no fee is required to be paid by the Department of Revenue for filing such appeals.
Following is the extract (Para 54 of the Explanatory Circular on the Finance Act, 1999) from the CBDT Circular No 779 dated 14.9.1999. The circular clarifies that ITAT fees in TDS matters shall be Rs.500 only.
" 54. Rationalisation of provisions relating to reduction of litigation and other allied issues :
54.1 Finance (No. 2) Act, 1998 introduced a number of measures to reduce mounting litigation and delay in disposal of appeals under direct tax enactments. The major amendments included direct appeal to the High Court, introduction of a scale of fee payable before the Commissioner (Appeals) and enhancement of existing scale of fee payable before the Appellate Tribunal. These provisions have come into effect from the 1st day of October, 1998. A number of suggestions were received on the implementational aspects of these measures. Some of them required amendment of the relevant sections of the Income-tax Act to rationalise and streamline the provisions. The following amendments have been made by the Act in this regard : (i) The Finance (No. 2) Act, 1998, introduced a scale of fees for filing appeals before the Commissioner (Appeals) and also enhanced the existing scale of fee payable before the Appellate Tribunal under various direct tax acts. The fee payable under the Income-tax Act both before the Commissioner (Appeals) and the Appellate Tribunal is relatable to the assessed income. However, appeals are also filed on issues such as TDS defaults, non-filing of returns, etc. which may not have any nexus with the assessed income. The Act, therefore, has amended section 249 of the Income-tax Act to provide a fee of Rs. 250 for appeals before the Commissioner (Appeals) and Rs. 500 for appeals before the Appellate Tribunal for the residuary group of appeals which cannot be linked with the assessed income. [Sections 83 and 85]."
The Karnataka High Court in their recent decision in Rajkamal Polymers P. Ltd. v. CIT (2007) 291ITR314 held that the issue in a penalty appeal is not one relating to quantum of income, so that it should be treated as an appeal “in any other mater” under residual clause in section 253(6) of the Act, for which a flat rate of Rs. 500 has been prescribed. The High Court directed the Tribunal in this case to refund the excess paid along with interest @ 10% PA beyond 30 days from such order.
Earlier the Mumbai bench of ITAT in Amruta Enterprises vs. Deputy Commissioner of Income-tax (2003) 84ITD172 also held that in the context of penalty appeal the filing fee payable should be governed by clause (d) of sub-section (6) of section 253. AS per the bench clauses (a), (b) and (c) have particularly referred the quantum of total income on the basis of which filing fee is determined and the Legislature has not linked anywhere the quantum of total income with the amount of penalty. Therefore, it would be unfair and unjust to charge more fee from the appellant by enlarging the scope of such provisions. It particularly made reference to the CBDT Circular (supra) and the memorandum explaining the provisions so as to hold in the appellant’s case that it has deposited the proper filing fee in terms of section 253(6)(d) of Rs. 500.
Assessee’s who have therefore paid more than the required fee may approach the respective Tribunal for refund of excess payment made on the basis of this solitary decision of the Karnataka High Court.
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