1. In as many as 21 grounds of appeal which are unnecessarily full of arguments and narrative, objection is taken to the order of the Commissioner (Appeals) dated 25-2-1984 holding that the appeal filed by Pan American World Airways (Panam) against the order passed by the ITO under Section 230(2) of the Income-tax Act, 1961 ('the Act') was not maintainable in law. The Commissioner (Appeals) had considered at length the submissions made before him and then after analysing the provisions of Section 246 of the Act after consulting the various commentaries of Income-tax Law come to the conclusion that no appeal lay against the order for recovery of tax which was passed by the ITO under Sub-section (2) of Section 230.
2. Shri Veda Vyas, advocate, the learned authorised counsel of the appellant has, after stating the relevant facts, contended that the Commissioner (Appeals) misconstrued the provisions of Section 246(1)(c) in declining to entertain as maintainable the appeal filed against the order of the ITO under Section 230(2). According to the learned counsel the appeal filed by Panam ought to have been entertained by the Commissioner (Appeals) under Section 246(1)(c) as Panam was an assessee within the meaning of Section 2(7)(c) of the Act, and as it was denying its liability to be assessed under the Act and in particular under the provisions of Section 230(2). Referring to the order passed by the ITO under Sub-section (2) of Section 230 and after analysing these provisions, the learned counsel says that the order passed by the ITO amounted to an assessment in respect of taxes demanded and, therefore, for this reason and for the reason that the amount of tax demanded was determinable by the ITO under Sub-section (2) of Section 230, the appeal filed by Panam was squarely covered by the provisions of Section 246(1)(c). According to him there should have been no doubt about the maintainability of the assessee's appeal within the provisions of Section 246(1)(c) and that in any case even if there was any possibility of a doubt the appeal ought to have been entertained by the Commissioner (Appeals) as the right of appeal which is a valuable right cannot be denied on grounds of denial nonconformity (sic). According to Shri Vyas the provisions relating to appeals should be given a liberal interpretation and that unless there are unmistakable indications to the contrary, the right should not be denied. In support of his contention that the appeal filed by Panam before the Commissioner (Appeals) was maintainable under the provisions of Section 246(1)(c), Shri Vyas has relied on a number of decided cases. Firstly, he has referred to the decision of the Hon'ble Supreme Court in the case of CIT v. Kanpur Coal Syndicate  53 ITR 225. It is submitted on the authority of the above decision that the expression 'denial of liability' as appearing in Section 246(1)(c) is comprehensive enough to take into account not only the total denial of liability but also the liability to tax under particular circumstances. The next authority on which he placed reliance is in Gopi Lal v. CIT  65 ITR 477 (Punj.). In this case the decision of the Hon'ble Supreme Court in the case of Kanpur Coal Syndicate (supra) had been taken note of and it had been held by the Hon'ble High Court that the expression 'denial of liability' not only includes a case where the liability to tax under the Act was altogether denied by an assessee but also included a case where the liability was denied in particular circumstances. The third authority on which reliance is placed by the learned counsel is in Mohan Lal Khemka v. C/7  81 ITR 89 (All.). Here once again the guidelines laid down by the Hon'ble Supreme Court in the case of Kanpur Coal Syndicate (supra) had been taken note of by the Hon'ble Allahabad High Court and it had been held that a provision granting the right of appeal to the subject being a valuable right should be construed liberally and that the expression 'denial of liability' was comprehensive enough to include not only the total denial of liability but also the denial of liability to tax under particular circumstances 3. On the other hand Shri N.K. Chakraborty, the learned departmental representative, has refuted all the contentions taken by the learned counsel of Panam. Raising a preliminary objection to the maintainability of the appeal filed before the Tribunal, the learned authorised representative says that the grounds of appeal being full of arguments and being contrary to the provisions contained in Rule 8 of the Income-tax (Appellate Tribunal) Rules, 1963, the appeal should be rejected in limine. Thereafter the learned departmental representative submits that the directions which had been given by the ITO under the provisions of Sub-section (1) of Section 230 to the Panam not to allow the tax defaulter Dr. Jayanti Dharma Teja to avail of travelling facilities on any of the aircraft belonging to Panam without production of a tax clearance certificate was a valid order and for that he placed reliance on a decision of the Hon'ble Andhra Pradesh High Court in the case of Dr. Jayanti Dharma Teja v. Secretary, Government of India, Ministry of Finance  148 ITR 316. According to him, a valid direction under Section 230(1) having been issued to Panam not to allow Dr. Teja any travel facilities unless he had produced a tax clearance certificate in accordance with Section 230(1) and that direction having been flouted and Dr. Teja having been allowed to leave India on one of the Panam flights, the ITO was justified in taking executive action of recovering taxes due from the defaulter from Panam itself in accordance with the provisions of Section 230(2). According to the learned departmental representative the right of appeal does not exist in the air and that it can be availed of only when it is specifically provided under the statute. According to Shri Chakraborty, the order passed under Sub-section (2) of Section 230 was merely an executive order or a direction and that such an executive order or a direction of fastening vicariously the liability of a defaulting assessee on an aircraft carrier who disregards the directions issued under Section 230(1) would not be an appealable order as it would not fall within the provisions of Section 246. Reading from the order of the Commissioner (Appeals) the learned departmental representative says that Clause (c) of Section 246(1) can be dissected into two parts. Firstly, according to him an appeal would lie under Section 246(l)(c) where an assessee denies his liability to be assessed under the Act. Secondly, the appeal would lie where the assessee objects to an order of assessment under Sub-section (3) of Section 143 or Section 144 of the Act in respect of the amount of income assessed or to the amount of tax determined or to the amount of loss computed or to the status in which the assessment is made.
According to the departmental representative, the assessee's case does not come within any one of the limbs of Section 246(1)(c). Referring to the order dated 15-2-1983 passed by the ITO under Section 230(2), the departmental representative says that this order had been made on the defaulting assessee named Dr. Jayanti Dharma Teja and that the liability of the defaulting assessee had been fastened on the Panam not because any assessment had been framed on Panam but because it had defaulted within the meaning of Sub-section (2) of Section 230. The provisions of Sub-section (1) of Section 230 were applicable in the case of Dr. Jayanti Dharma Teja (supra) and this fact had been duly brought to the notice of the Panam and since in spite of that information the Panam as the owner of aircraft operating in India had allowed Dr. Teja to leave India and to go to United States of America, the order under Section 230(2) had been passed merely as a measure of recovery of taxes from Panam. Such an order according to the departmental representative did not amount to any assessment or the determination of any tax on Panam and that it merely tanta-mounted to asking Panam to pay the taxes which were due from tax-defaulter Dr.
Teja who had been allowed to leave India without insisting upon him to produce a tax clearance certificate. The learned departmental representative further submits on the authority of the decision of the Hon'ble Calcutta High Court in the case of Kalinga Air Lines (P.) Ltd. v. ITO  85 ITR 443 that the matter regarding the issuance of tax clearance certificate is purely an executive matter and, therefore, there was no question of their being an appeal being permissible under the provisions of Section 246(1)(c). After making an analysis of the different Chapters of the Act, laying down the procedure of assessment and the procedure of recovery, the learned departmental representative submits that the order passed under Section 230(2) on Dr. Teja was not an order of assessment within Chapter XIV of the Act and that it was an order which fell within the Chapter XVII-D of the Act which provides for the various modes of collection and recovery of taxes from assessees who are in default or assessees who are deemed to be in default. In these circumstances, according to Shri Chakraborty, when the liability to tax had been fastened on Dr. Teja and when it had been vicariously demanded from Panam on account of Section 230(2), there was no question of the assessee's case falling under any one of two parts of Section 246(1)(c). According to the departmental representative it could not be a case of denial of liability to be assessed under the Act on the part of the Panam which in fact is assessed to tax in India in respect of its Indian income. Similarly, according to him, this also could not be a case which fell within the second part of Section 246(1)(c) inasmuch as it was not a case of an assessee objecting to the income assessed or to the amount of tax determined or to the loss computed or to the status under which the assessment was framed. Shri Chakraborty admits that liberal interpretation should be placed on provisions relating to filing of appeals but at the same time maintains that liberal interpretation can be given where in fact any appeal is provided but it cannot be given where the statute did not intend that an executive order be made appealable. Ultimately, Shri Chakraborty concludes is arguments by saying that the process of recovery and the process of assessment are different and that since an order under Section 230(2) was not an order of assessment and was merely an executive direction issued to Panam, the Commissioner (Appeals) was justified in holding that the appeal filed before him by Panam was not maintainable. According to Shri Chakraborty, all orders that may be passed by the income-tax authority cannot be claimed to be appealable and he gives the instances of those orders which were considered and held to be not appealable by the Hon'ble Supreme Court or the High Courts decisions in CIT v. Amritlal Bhogilal & Co.  34 ITR 130, Shell Co. of India Ltd. v. CIT  51 ITR 669 (Cal.), Delhi Registered Stockholders (Iron & Steel) Association Ltd. v. CIT  59 ITR 16 (Punj.) and Vineet Talkies v. CIT  148 ITR 66 (MP).
4. Before we adjudicate upon the rival contentions ably taken by the learned representative of the two sides we may briefly state the facts which led to the controversy in question. One Dr. Jayanti Dharma Teja had been assessed on large amounts of income-tax and wealth-tax during the assessment years 1963-64 to 1977-78. As per particulars given in the order passed by the ITO under Sub-section (2) of Section 230 on Dr.
Teja there was a total liability of income-tax and wealth-tax amounting to Rs. 4,75,24,031 which had not been paid by the defaulting assessee.
Since the ITO was of the opinion that Dr. Teja may leave India with an intention of not returning to India, he had intimated the various aircraft carriers operating in India that Dr. Teja should not be allowed to avail of the travel facilities on their aircraft unless a tax clearance certificate had been produced by him. The information sent by the ITO acting under Section 230(1) had been duly received by Panam and the fact that this information had been received by them had been duly acknowledged. In spite of that Dr. Teja was allowed to leave India on 14-5-1977 on a Panam flight to America en route to Sanjose in Costarica. Panam had allowed the travel facilities to the defaulter without insisting on the production of a tax clearance certificate under Section 230(1). For the default committed in the form of allowing a tax defaulter to leave India without producing a tax clearance certificate, a notice was sent to Panam under Sub-section (2) of Section 230 calling upon them to show cause as to why they should not be proceeded against for recovery of taxes due from Dr. Teja up to the date of his departure from India. In reply Panam stated that the whole of the responsibility for the escape of Dr. Teja could not be fixed upon Panam and that it was the primary responsibility of the customs authorities and not of the Panam to insist for the production of a tax clearance certificate. It was also stated in reply that it was the Government of India which had deliberately allowed Dr. Teja to leave the country. The ITO held in his order dated 15-2-1983 that none of the contentions of the Panam were tenable and that since it had allowed Dr.
Teja to escape from India on one of its aircraft it was liable for recovery of taxes assessed on Dr. Teja in accordance with the provisions of Sub-section (2) of Section 230.
5. In the background of the abovementioned facts, we have given our very careful consideration to the contentions raised by the learned authorised representatives of the assessee and the department. We have very carefully gone through the various decisions on which reliance has been placed by Shri Vyas, learned counsel for the assessee or by Shri Chakraborty, the learned departmental representative. We have also gone through the provisions regarding appealable orders as contained in Chapter XX of the Act and the provisions relating to a tax clearance certificate as contained in Section 230.
6. The provisions of Section 230 appear under Chapter XVII-D under the heading 'Collection and recovery'. Apart from providing for levy of penalty and interest under Sections 220 and 221 of the Act for non-payment of taxes, etc., demanded under Section 156 of the Act and under other provisions of the Act, the provisions of Chapter XVII-D also provide for other modes of recovery. The provisions of Sections 222 to 225 of the Act provide for initiation of certificate proceedings against a defaulting assessee and the forwarding of a certificate of recovery by the ITO to the TRO. The provisions of Section 226 of the Act, amongst others, empower the ITO to recover the taxes from any person or persons from whom money is due or may become due to the defaulting assessee. The provisions of Section 227 of the Act provide for recovery of taxes through the State Governments. The provisions of Sections 228 and 228A of the Act provide for recovery of Indian taxes in Pakistan and taxes recoverable in pursuance of agreement with foreign countries, in Section 229 of the Act it has been clarified that any amount imposed by way of interest, fine, penalty, etc., could be recoverable under Chapter XVII as arrears of tax. Thereafter appear the provisions of Section 230(1) which provide that no persons whether he is domiciled in India or not shall be allowed to leave the territory of India by land, sea or air unless he produced a tax clearance certificate from the competent authority to the effect that he has no tax liability under the various tax Acts or that satisfactory arrangements have been made for the payment of taxes due from him. The provisions of Sub-section (2) of Section 230 provide that if the owner or charterer of any ship or aircraft carrying persons from any place in the territory of India to any place outside India allows any person to whom the provisions of Sub-section (1) of Section 230 apply to leave India without satisfying that such person is in possession of a clearance certificate, he shall be personally liable to pay the whole or any part of the amount of tax payable by such person as the ITO may, having regard to the circumstances of the case, determined. In Sub-section (3) of Section 230 it has been further provided that if the owner or a charterer of any ship or aircraft fails to pay the taxes demanded from him under provisions of Sub-section (2) of Section 230, he shall be deemed to be an assessee in default and the sums payable by him will be recoverable in the manner provided in Chapter XVII as arrears of tax. After carefully going through the scheme of recovery of taxes as envisaged in the abovementioned sequence, it does appear to us that these provisions which come into play after an assessment is framed cannot be equated with any process of assessment. Assessment in its most comprehensive sense can be said to include the entire procedure for imposing a liability upon the taxpayer in respect of his income. As has been opined by the commentators on Income-tax Law, 'assessment' consists of three steps. Firstly, it involves computation of the taxable income of an assessee. In the second place, the tax payable by him on the basis of such computation of income has to be determined. Finally, a notice of demand specifying the taxes on income payable by the assessee has to be served upon the assessee. Viewed from this comprehensive angle, the proceedings of recovery do not come within the meaning of the word 'assessment'. In these circumstances, we would agree with the point of view of the learned departmental representative that an order within the meaning of Section 230(2) in Chapter XVII-D dealing with recovery and collection of taxes would not be a part of assessment. In other words, when an order is passed under Section 230(2), the person against whom the order is passed cannot be said to have been assessed under the Act.
7. We would now proceed to examine the provisions of Section 246(1)(c) which according to the learned counsel for the appellant permitted the filing of a maintainable appeal against an order under Section 230(2).
Before we do that we may say a few words about the law regarding the interpretation of provisions which permit filing of appeals under the statute. We would agree with the learned counsel for the appellant that a liberal interpretation has to be put on the provisions regarding appeals. The right of an appeal is a valuable right of a litigant and according to us it should never be denied unless its forfeiture or abandonment is conclusively shown. At the same time we are also aware that right of appeal is a creature of statute and that there can be no right of an appeal unless it is conferred by the statute. If the right of appeal stands conferred by a certain statute then undoubtedly it has to be liberally construed. Now examining the provisions of Section 246(1)(c), we find that its dichotomy results in two parts. These are that any assessee can appeal firstly where he denies his liability to be assessed under the Act, or where the assessee objects to any order of assessment under Sub-section (3) of Section 143 or Section 144 or where he 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. If an assessee has a grievance against an order passed against him and if that grievance does not fall withing any one of the situations mentioned above, then the provisions of Section 246(1)(c) will not apply. So far as the second limb of Section 246(1) (c) is concerend, it cannot by any stretch of imagination embrace within itself an appeal against an order passed under Sub-section (2) of Section 230. The learned counsel for the appellant also admits so, but as stated earlier his contention is that the case of the appellant falls within the first limb of Section 246(1)(c), i.e., within denial of liability to be assessed under the Act. In order to judge whether the assessce's case falls within the expression 'where the assessee denies his liability to be assessed under this Act' we have as a very first step looked into the decision of the Hon'ble Supreme Court in Kanpur Coal Syndicate's case (supra). Their Lordships had examined the meaning of the expression 'denial of liability' and held relied upon by the learned counsel of the appellant, i.e., those in Gopi Lal's case (supra) and Mohan Lal Khemka's case (supra) do not support the case which is being made out by him inasmuch as these decisions had been pronounced in entirely different facts and circumstances. Guided by the majority view of the various Hon'ble High Courts as found in the abovementioned decision we would hold that the order passed by the 1TO under Section 230(2) against Panam, in the facts and circumstances stated above, did not fall within the expression 'denies his liability to be assessed under this Act'. Since the procedure of recovery does not amount to a procedure of being assessed under the Act, the question of appellant contending that its case falls within the denial clause does not arise. At this stage we are reminded of the celebrated decision of the Hon'ble Supreme Court which is in Amritlal Bhogilal & Co.'s case (supra). There their Lordships were considering the scope of Sections 30 and 31 of the Indian Income-tax Act, 1922, which provide for the appeals to the AAC under that Act. Their Lordships held that, however, wide the powers of an AAC may be in an appeal, they can be exercised only in respect of matters which are specifically made appealable and if any order has been deliberately left out from the jurisdiction of the AAC, it is not up to him to entertain a plea about the correctness, propriety or validity of such an order. Here in the present case before us we find that neither the provisions of Section 246(1)(c) nor any other provisions of Section 246 permit an appeal against an executive order passed by the ITO under Sub-section (2) of Section 230 for recovering the taxes initially assessed upon an assessee who had defaulted and which are vicariously demanded to the extent fixed by the ITO. From a person who had failed to comply with the provisions of Sub-section (1) of Section 230. In fact there is only one Section out of various sections mentioned in Chapter XVII-D which finds a mention in the provisions of Section 246. That section is Section 221, which enables an assessing authority to impose penalty on an assessee who is in default or who is deemed to be in default. In respect of other modes of recovery appeals are provided to the extent that they are mentioned in the Income-tax (Certificate Proceedings) Rules, 1962. A whole code for recovery proceedings has been devised in these Rules and these Rules provide for appeals against the orders of the TRO. As far as an order under Section 230(2) is concerned, it does not find a mention any where either in Section 246 or in any one of the said rules. But that does not mean that an order passed under Section 230(2) is without any remedy whatsoever. The appellant could have moved in accordance with the provisions of Section 264 of the Act but as far as the provisions of Section 246 are concerned, we find that in fact there is no clause which permits an appeal against an executive order or a direction which is made by an ITO under Section 230(2). The mere fact that the ITO is entitled to determine the quantum of taxes which is demanded from a person under the provisions of Section 230(2) does not make that order appealable. In case the statute makers actually intended that an appeal was permissible against an order under Section 230(2) they could have made, a provision like the one as contained in Section 248 of the Act. That having not been done by the framers of the statute and there being nothing in Section 246 permitting an appeal against an order under Section 230(2) which as per decision in Kalinga Air Lines (P.) Ltd's case (supra) is merely an executive direction, we would agree with the order passed by the Commissioner (Appeals) rejecting the appeal filed by the appellant in limine.