Yashashree Yogesh Naik vs Deputy Commissioner of Income Tax

During the course of hearing of these appeals, it was noticed that the Assessee has not complied with the provisions of Section 253(6) of the IT Act, 1961, requiring, inter alia, an Assessee Appellant to pay requisite fees. The Assessee has, however, moved a petition urging us to hold that the Assessee, being an indigent person, is not required to pay the appeal fees. We are thus required to dispose of this plea at the threshold itself.

The Assessee before us is a lawyer by profession, and she was subjected to a search and seizure operation carried out by the IT authorities. During the course of search, only Rs. 10,000 were found in cash. It is in connection with the assessments framed as a result of this search operation that the Assessee is pursuing the present appeals.

The case of the Assessee is that she is not in a position to pay the appeal fees, and that, in accordance with the letter and spirit of provisions of order XXXIII of the Code of Civil Procedure, we should not deny her justice only on the ground of her inability to pay the appeal fees. According to her calculations, she is required to pay appeal fees of Rs. 25,269 (though the correct amount for the present six appeals, in our understanding, works out to Rs. 7,510). When it was put to her that the Tribunal does not have any specific powers to grant exemption from payment of appeal fees, she invited our attention to the judgments of Hon''ble Supreme Court in the case of A.A. Hajamuniddin v. Indian Railways : AIR 1993 SC 361, and of Hon''ble Bombay High Court in the case of Raj Kumar v. DRT : II (2004) BC 485, in support of the proposition that underlying principles of the Code of Civil Procedure cannot be ignored by any Tribunal, including the Income-tax Appellate Tribunal. She submits that once Hon''ble Courts hold that the provision of the Code of Civil Procedure must guide functioning of the Tribunals, it cannot be open to us to disregard order XXXIII which is one of the most important provisions of the Code of Civil Procedure and which ensures that the justice is not denied to the indigent persons. She submits that this Tribunal has inherent powers to waive the payment of appeal filing fees in fit and deserving cases, and this power has been specifically recognized by the Hon''ble Supreme Court as also by Hon''ble jurisdictional High Court. Our attention is also invited to several other judicial precedents, including from non-jurisdictional High Courts as well, namely in the cases of Powsulph India (P) Ltd. v. Inventa Technical and Ors. : AIR 1995 Ori 291, Chayamani Tripathi and Anr. v. Praveen Kumar and Ors. : AIR 1998 HP 36, Jugal Kishore v. Dhanno Devi : AIR 1973 SC 2508, K. Yahoda and Ors. v. State of Kerala : AIR 1997 Ker 130, Parvathi v. Ram Chand : AIR 1986 P&H 217 and A. Prabhakaran Nair v. K.P. Nelakamatan Pillai : AIR 1988 Ker 267. Learned Assessee then makes elaborate submissions in support of her plea that the orders impugned in the appeal, are wholly devoid of any legally sustainable merits, and that the authorities have neither complied with the principles of natural justice, nor even the basic requirements of service of notice for assumption of jurisdiction. She points out, what she claims to be, fundamental and gross errors of law which have vitiated the impugned orders so much so that they cannot meet any independent judicial scrutiny. It is submitted that she has already been subjected to undue harassment by the Revenue authorities, and it will add to her woes if she is also asked to pay the appeal filing fees in connection with such frivolous cases against her.

Learned CIT-Departmental Representative, on the other hand, submits that the Tribunal itself is a creature of the IT Act, 1961, and it cannot be open to the Tribunal to question the validity of, or read down the scope of, the very provisions of the IT Act. In case we venture to do so, we will, according to the learned CIT. be travelling well beyond the scope and call of our duty and powers. Learned CIT be very politely but firmly submits that we must restrict ourselves to interpreting the law as it exists and refrain from venturing to interpret the law as it ought to be. It is also important to bear in mind the fact, according to the learned CIT, that the powers of Hon''ble High Courts and Hon''ble Supreme Court are indeed much wider and extend to even examining the validity of, and reasonable of, legislation on the touchstone of principles embedded in the Constitution of India. We are thus urged to refrain from taking too aggressive a view of our powers and remain confined to the provisions of the IT Act. It is also pointed out that, in any event and even on merits, it is not a fit case for exempting the Appellant from payment of appeal fees. The provisions of order XXXIII of the Code of Civil Procedure, as it appears from a cursory reading of the said provision, are meant to help out a destitute or pauper, and not to elite professionals like lawyers. It is also pointed out that the Appellant before us is a successful lawyer who is admittedly practicing before Hon''ble Bombay High Court, Debt Recovery Tribunals and other legal forums. Assuming that we have the powers to exempt an Appellant from paying the appeal fees, even as learned CIT emphatically submits that we have no such powers, the case before us does not deserve the relief sought.

In rejoinder, learned Assessee submits that in view of the unambiguous provisions of Article 141 of Constitution of India, the words of statute cannot have primacy over the law laid down by the Hon''ble Supreme Court. The views expressed by the Hon''ble Courts above are to be given due and fair consideration. It is also submitted that there is no question of our reading down the provisions of the IT Act; their Lordships have already done so. All we have to do is to implement, in letter and in spirit, the law laid down by the Hon''ble Courts above. It is also pointed out that as a subordinate Court, we are duty bound to implement the law laid down by their Lordships. In response to our question that the observations made by the Hon''ble Courts are not in the context of the provisions of the IT Act, it is pointed out that what is material is the law as laid down by their Lordships and not the context in which law is so laid down. That would have been relevant, according to the learned Assessee, if there was any ambiguity in the observations made by their Lordships. As for the merits of learned Assessee''s claim that she should be exempted from payment of fees, she submits that it is not the earning of the Assessee, but the assets of the Assessee at the material point of time, which must govern whether or not she should be exempted from payment of filing fees. All that is found with her, even in a search operation, is Rs. 10,000 and yet she is expected to part with this amount to pay the filing fees. She also submits that just because she is a lawyer does not necessarily mean that she is well off. She further submits that the case against her is wholly frivolous and she cannot be subjected to undue hardship to pay fees to defend this frivolous case. She urges us to examine the merits of the case and then take the call whether or not this is a fit case for exemption from payment of appeal filing fees. She once again reiterates her submissions, and urges us to exercise, what she perceives as, our inherent powers to grant exemption from payment of appeal filing fees.

We have considered the rival submissions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position.

A plain reading of order XXXIII of the Code of Civil Procedure indicates that the said provision is essentially to safeguard the interests of indigent persons who do not have the means to pay for fees to seek legal remedies available to them. When these provisions are successfully invoked, the successful Petitioner is not liable to pay any Court fee, or fees payable for service of process, in respect of any petition, appointment of a pleader or other proceeding connected with the litigation. The noble objectives of this provision have been aptly explained in illuminating observations by Hon''ble Justice Krishna Iyer, while rejecting the SLP filed by the State of Haryana v. Darshana Devi and Ors. : AIR 1979 SC 855, at 856, as follows: We refuse leave but with a message tag. The poor shall not be prised out of the justice market by insistence on Court fees and refusal to apply the exemptive provisions of order XXXIII Code of Civil Procedure, so we are distressed that the State of Haryana, mindless of the mandate of equal justice to the indigent under the Magna Carta of our Republic, expressed in Article 14 and stressed in Article 39A of the Constitution, has sought leave to appeal against the order of the High Court which has rightly extended ''pauper'' provisions to auto accident claims. The reasoning of the High Court in holding that the order XXXIII will apply to Tribunals, which have trapping of the Civil Courts, finds our approval. We affirm the decision.

It is thus clear that the benefit of ''pauper provisions'' under order XXXIII is confined to the underprivileged class of public which does not have means to pay the costs of litigation. The expression ''indigent person'', which is used in order XXXIII to refer to this category of our underprivileged brothers and sisters, is a well defined expression. We have taken note of Expln. 1 of order XXXIII of Code of Civil Procedure provides, as modified for application in the jurisdiction of Hon''ble Bombay High Court, which defines an indigent person as someone who is "not possessed to means exceeding rupees one thousand in value or where he is possessed of means exceeding one thousand rupees in value, the same are not sufficient to enable him to pay fees prescribed by law for the plaint". The definition of an indigent person is thus restricted to such persons who do not even possess as little as one thousand rupees, or to those persons who do not possess enough money as to pay the filing fees prescribed by law.

To invoke the provisions of order XXXIII thus, an Assessee must fit in one of these two categories. Even by learned Assessee''s admission, she does not fall in the first category i.e. having assets of less than rupees one thousand only. As for the second category, we have noted that the total fees payable by the Assessee, for all these six appeals, is Rs. 7,510, and the Assessee, a lawyer in practice, can be declared to be an indigent person only when it is found that the means she is possessed of "are not sufficient to enable her to pay fees prescribed by law". At least two of these appeals involved as little a fee as Rs. 500 each, while three other involved appeal fee of Rs. 1,500 each, and one appeal involved a fees of Rs. 2,010. Even by Assessee''s admission, the Assessee had means to pay for these six appeals, but yet the Assessee has invoked the provisions, which are meant for destitute, to shirk her responsibility. There is no dispute at all that the Assessee Appellant is in practice before Bombay High Court, Debt Recovery Tribunal and lower Courts. As a matter of fact, those appeals, which were originally filed before the Nagpur Bench of this Tribunal, were transferred to Mumbai Benches, inter alia, on the ground that due to Assessee''s preoccupation with professional work in Mumbai, it is not possible for her to attend to the proceedings before the Tribunal in Nagpur. During the course of hearing before us, she stated that her annual income from profession is Rs. 70,000. Whatever be the credibility of this statement, even going by her statement, it is not possible to infer that she did not have the means to pay Rs. 7,510 as filing fees. Her explanation is that she had only Rs. 10,000 which she needs "for maintenance of life and meet day to day expenses of the family". It is not because of the priorities of the litigant but because of lack of resources of litigant that order XXXIII can be invoked. The claim that a lawyer, with decades of standing and possessing the legal skills which she has displayed in making out this case, does not have means to pay Rs. 7,510 as filing fees, appears too far-fetched to have any credence. As a matter of fact when we put this proposition to her, her reaction was that even if she has resources to pay the appeal fees, the cases against her are frivolous and there cannot be any good reasons to make her part with money for no fault of her. We are unable to see any merits in this approach of the Assessee. Whether a case is frivolous or not, is irrelevant when examining the scope of application of order XXXIII of the Code of Civil Procedure, which is essentially meant to protect the legal rights of a destitute or a pauper, i.e. indigent persons. The frivolity of demands raised on an Assessee could at best be one of the relevant considerations in deciding whether or not it is a fit case for award for costs to the Assessee Appellant, but that has nothing to do with whether the Assessee Appellant can be considered to be an indigent person. The protection of order XXXIII could be available to helpless person who cannot pursue the legal remedies because of lack of resources. Under Rule 4(1) of order XXXIII, the Court has powers to examine the applicant regarding the merits of the applicant''s claim of being an indigent person, and as a corollary thereto, under Rule 5(2), the Court can reject the claim of the applicant to the effect that he is indigent person. It is not that mere making of a claim of indigent person would be sufficient to discharge the Assessee Appellant of his burden to pay fees. The claim for being covered by the protection available for indigent persons must be decided in the light of the criterion laid down by Expln. 1 to Rule 1 of order XXXIII. As we have seen in the foregoing discussions, the Assessee fails on the two tests laid down therein. The Assessee thus clearly does not fit in the criterion of being an indigent person. The case made out by the Assessee is frivolous and devoid of any merits. In our view, a plain look at the basic facts of the case unambiguously demonstrates that the Assessee is not an indigent person, and there is no need to address ourselves to the question as to whether or not order XXXIII of Code of Civil Procedure will have application in the matter. Given the above factual matrix, it is a wholly academic question as to whether or not this Tribunal has the powers to grant exemption from payment of filing fees to the Assessee Appellants. There is no occasion and no need to consider that aspect of the matter. In any event, there are significant dissimilarities in scope and coverage of income-tax litigation vis-a-vis accident claim litigation or railway claim litigation that Hon''ble Supreme Court had occasions to consider. Unlike the cases of motor accident claims and railway claims, which involve even the most underprivileged section of society, income-tax litigation is generally touching the lives of relatively affluent section of society, and there may not be any cases in which persons defined as ''indigent persons'' could be involved in litigation before this Tribunal. It is, therefore, futile to go into, what seems to us, an entirely hypothetical question. We decline to address ourselves to the broader question regarding the powers of Tribunal to grant exemption of appeal filing fees, and also to the objections, raised by the learned CIT-Departmental Representative, challenging our powers to adjudicate on that question.

During the course of hearing, when it was indicated to the learned Assessee that we are not swayed by her arguments nor does she appear to be an indigent person so as to claim protection under order XXXIII of Code of Civil Procedure, and we asked the Assessee whether she would like to pay the fees so that appeals can be adjudicated on merits, learned Assessee wanted to take a rain check on our offer, by making a prayer that in the event of our formally holding so in the order, she should be given liberty to pay the fees and seek restoration of appeals. We are not very happy with this approach of the Assessee. The Assessee has wasted our precious time on adjudicating upon a frivolous plea, and now the Assessee seeks an anticipatory permission, if need be, to pay the fees and to have the appeals restored. While, in the interest of substantial justice, we do not want to put any impediments in the way of any such requests being entertained by the Tribunal on merits-as when the occasion arises, we also make it clear that we do not wish to pre-empt, or to be seen as preempting, the decision of the Bench as and when it is in seisin of that request or prayer. In any event, it is for the Assessee lawyer, who is apparently well versed with the intricacies of law, to take the call whether she wants to pay the appropriate fees, and file fresh appeals along with condonation of delay, or to seek restoration of these appeals-as may be permissible in accordance with the law. We leave it at that.

In the result, all the six appeals are dismissed as not maintainable, for want of payment of appeal fees.