Satish Chandra, C.J. - (1.) THE question of law which requires consideration by this Full Bench is whether levy of interest either under Section 139 of the I.T. Act, 1961, for late filing of the return, or under Section 215 for not paying or short paying advance tax, or under Section 217 for not sending the estimate, is appealable under Section 246 of the Act.
(2.) IT is trite that an appeal is a creature of the statute. An assessee has a right of appeal only if there is a statutory provision for it. Chapter XX of the I.T. Act, 1961, deals with appeals and revisions. Section 246 provides: " 246. Any assessee, aggrieved by any of the following orders of an Income-tax Officer may appeal to the Appellate Assistant Commissioner against such order--... (c) an order against the assessee, where the assessee denies his liability to be assessed under this, Act or any order of assessment under Sub-section (3) of Section 143 or Section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed ;...... (m) an order under Section 216." Section 30 of the Indian I.T. Act, 1922, provided for appeals in similar terms. Under Clause (c) of Section 246, there is a right of appeal against the regular assessment under Section 143(3) or Section 144 where the objection is to the amount of income assessed or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed. In this context, the phrase "where the assessee denies his liability to be assessed under this Act" should not be construed to include the grounds of attack covered by the other part of the clause, because that will render the aforesaid part of Clause (c) otiose or superfluous.
(3.) LEGISLATIVE history is an admissible aid to interpretation of statutes. Clause (c) has a peculiar legislative history. : Under Section 18A of the Indian I.T. Act, 1922, the levy of interest was automatic. The ITO had no discretion. He had merely to calculate the amount. By Act No. 25 of 1953 which was enacted with retrospetive effect from April 1, 1952, a discretion was conferred on the ITO to reduce or waive the interest. Rule 48 was added to the Indian I.T. Rules, 1922, setting out the circumstances which the ITO was required to take into consideration while deciding the question of waiver or reduction of interest. Even though a judicial discretion was so conferred, no change was brought about in Section 30 which gave a right of appeal. Before the enactment of the 1961 Act the Direct Taxes Administration Enquiry Committee (popularly known as "the Tyagi Committee") in its report made a specific recommendation (para. 4.26, at page 86 of the report) that rights of appeal should be provided against the orders passed by the ITO under Section 18 A(6), 18 A(7) and 18A(8) authorising levy of interest and Section 18 A(9) and Section 18A(10) authorising levy of penalty in instances of late payment or non-payment of the correct amount of advance tax. The Income-tax Bill was referred to the Select Committee along with the Tyagi Committee's report. The Select Committee recommended that an order made under Section 216 (equivalent to old Section 18A(1) should be made appealable, and accordingly under Clause (m) of Section 246 of the Act of 1961 an appeal was so provided. No appeal was, however, provided against orders levying penal interest under other provisions, like Section 18A(6), equal to Section 215, and Section 217, equivalent to old Section 18A(8). The position is that the recommendation made by the Tyagi Committee was not accepted by Parliament, nor was the phrase "where the assessee denies his liability to be assessed under this Act" changed or modified so as to include orders of levy of interest. Parliament's intention is evident. Such orders were not found fit for appeal.;