The first proviso to Section 30(1) of the Income Tax Act, 1922, does not bar the right of appeal if the tax is paid before the hearing of the appeal.

Judgment -Tendolkar,J.

1. The question that falls for determination on this reference is whether the first proviso to Sub-section (1) of Section 30, which confers a right of appeal to the A. A. C. against certain orders, enacts a condition precedent to the presentation of the appeal or to the exercise of the right of appeal at all; or whether, in the alternative, it does not affect the right of appeal, but it affects merely the hearing and final disposal of the appeal.

2. The relevant facts are that for the assessment year 1949-50 a notice of demand under Section 29 was made for the payment of Rs. 1,80,646/. 14/- as income-tax and super-tax. The amount-was payable ,on 17-7-1954; but at the request of the assesses instalments were allowed and the last instalment of Rs. 30,646/14/- was made payable on or before 20-3-1955. There was default in payment of the last instalment and the Income-tax Officer, acting under Section 46(1), imposed a penalty of Rs. 3,000/- on 31-3-1955. The asses-see preferred an appeal to the Appellate Assistant Commissioner on 20-4-3955. The amount of the last instalment was paid on 16-5-1955. The appeal came up for hearing before ffie Appellate Assistant Commissioner on 19-8-1955, when the I. T. O. raised a preliminary objection that the appeal was not competent because prior to the presentation of the appeal the tax had not been paid. This objection was upheld by the A. A. C., but upon appeal the Tribunal held that upon a true construction of Section 30 Sub-section (1) and the first proviso thereto, the right of appeal was not taken away, but only the remedy was barred until tax was paid. It is this view of the Tribunal which has been challenged before us on this appeal.

3. Now, turning to the relevant section, Section 80 Sub-section (1) provides that any assessee may appeal to the Appellate Assistant Commissioner against the orders enumerated in that Sub-section. The first proviso to this Sub-section is:

"Provided that no appeal shall be against an order under Sub-section (1) of Section 46 unless the tax has been paid."

and the question is: At what stage hss this tax-to be paid in order that the right of appeal should not be affected by reason of non-payment? The contention of Mr. Amin for the Department is that the payment of tax is a condition precedent to the presentation of the appeal; whilst the contention for the assessee, which found favour with the Tribunal, is that the payment ot tax is a condition precedent to the hearing and disposal of the appeal; and if by the time the date of hearing arrives the penalty has not been paid, the appeal will be liable to be dismissed.

4. Now, Mr. Amin has urged that the words "no appeal shall lie" can mean nothing more or less than that the right of appeal is taken away unless the tax is paid. In other words, his contention is that the words "appeal shall lie" relate to the stage of entertaining the appeal or presenting the appeal and all subsequent stages, and not merely to the stage after presentation. Now, we must confess that the words "appeal shall lie" used in the context of a right of appeal in, for example, clause 15 of the Letters Patent or Section 96, 100, 101, 104, or 109 of the C. P. C., do relate to the right of appeal; and, therefore, they are words which are capable of bearing the meaning that tne right of appeal is itself affected if tne tax is not paid. But we have got to construe these words in the context of income-tax law so as to prevent any injustice to the assessee. Now, the requirement that no appe-1 shall lie is a requirement whica, in the case of inability on the part of the assessee to pay the penalty, may lead to an absolute denLl of the right of appeal; and, therefore, when the consequence of interpreting this proviso in a particular manner may well be to deny the right of appeal, wnich is an important right to the asses-see, altogether, if there is any alternative construction which can be put upon those words, it is our duty to try and

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