Skip to content


Commissioner of Income-tax Vs. Babu Ram Chandra Bhan - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 14 of 1965
Judge
Reported in[1969]74ITR143(All)
ActsIncome Tax Act, 1922 - Sections 30(1) and 67A
AppellantCommissioner of Income-tax
RespondentBabu Ram Chandra Bhan
Appellant AdvocateShanti Bhushan and ;R.R. Misra, Advs.
Respondent AdvocateDeokinandan Agarwal, Adv.
Excerpt:
- - section 67a stated :in computing the period of limitation prescribed for an appeal under this act or for an application under section 66, the day on which the order complained of was made, and the time requisite for obtaining a copy of such order, shall be excluded......8, 1963, on two grounds. firstly, the appeal was barred by time. secondly, in view of the prior appeal filed by babu ram, partner, another appeal by mahabir prasad was not maintainable. against the decision of the appellate assistant commissioner, mahabir prasad went up in further appeal before the income-tax appellate tribunal, delhi bench 'c'. the tribunal reversed the decision of the appellate assistant commissioner on both the points. the tribunal held that mahabir prasad's appeal was within time, and was maintainable in spite of the fact that another appeal had been previously filed by babu ram. the tribunal, therefore, directed rehearing of the appeal by mahabir prasad. 2. being dissatisfied with the tribunal's decision, the commissioner of income-tax, u.p., applied for a.....
Judgment:

V.G. Oak, C.J.

1. There existed a firm consisting of four partners. Among the partners were Babu Ram, Satya Deo and Mahabir Prasad. The firm was dissolved on October 22, 1957. The firm was assessed as such for assessment years 1957-58 and 1958-59. There were two separate appeals filed against the assessment orders. In the first instance, an appeal was filed by Babu Ram, partner. That appeal was disposed of by the Appellate Assistant Commissioner on July 28, 1962. In the meanwhile, another partner, Mahabir Prasad, filed an independent appeal on May 5, 1962. The appeal of Mahabir Prasad was dismissed by the Appellate Assistant Commissioner on January 8, 1963, on two grounds. Firstly, the appeal was barred by time. Secondly, in view of the prior appeal filed by Babu Ram, partner, another appeal by Mahabir Prasad was not maintainable. Against the decision of the Appellate Assistant Commissioner, Mahabir Prasad went up in further appeal before the Income-tax Appellate Tribunal, Delhi Bench 'C'. The Tribunal reversed the decision of the Appellate Assistant Commissioner on both the points. The Tribunal held that Mahabir Prasad's appeal was within time, and was maintainable in spite of the fact that another appeal had been previously filed by Babu Ram. The Tribunal, therefore, directed rehearing of the appeal by Mahabir Prasad.

2. Being dissatisfied with the Tribunal's decision, the Commissioner of Income-tax, U.P., applied for a reference to this court. Accordingly, the Tribunal has referred to this court the following questions of law :

'(1) Whether, on the facts and in the circumstances of the case, the appeals filed by the partner, Mahabir Prasad, before the Appellate Assistant Commissioner are valid under the second proviso to Section 30(1)?

(2) Whether, on the facts and in the circumstances of the case, the appeals filed by the said Mahabir Prasad were within time '

3. Section 30 of the Indian Income-tax Act, 1922 (hereafter referred to as the Act), provides for an appeal against an assessment order. Sub-section (1) of Section 30 states :

' Any assessee objecting to the amount of income assessed under Section 23. ... may appeal to the Appellate Assistant Commissioner against the assessment....

Provided further that where the partners of a firm are individually assessable on their shares in the total income of the firm, any such partner may appeal to the Appellate Assistant Commissioner against any order of an Income-tax Officer determining the amount of the total income or the loss of the firm or the apportionment thereof between the several partners, but in respect of matters which are-determined by such order may not appeal against the assessment of his own total income :.....'

4. It is common ground that Mahabir Prasad as a partner was entitled to file an appeal under the second proviso to Sub-section (1) of Section 30 of the Act. But, according to the Commissioner of Income-tax, U.P., that right of Mahabir Prasad was extinguished by the fact that Babu Ram had filed an appeal previously. We do not see how Mahabir Prasad's right of appeal can be extinguished by the mere fact that another appeal had been filed by another partner, Babu Ram. Babu Ram and Mahabir Prasad were both partners of the dissolved firm. They both had a right of appeal under the second proviso to Section 30(1) of the Act. Ordinarily, there should be no difficulty in consolidating such appeals filed by two different partners of a dissolved firm. Some difficulty may arise if a partner files an appeal after the decision of an appeal by another partner. But no such difficulty arose in the instant case. At first Babu Ram filed his appeal. Subsequently, Mahabir Prasad filed his appeal on May 5, 1962. The two connected appeals were pending before the Appellate Assistant Commissioner in May, 1962. Babu Ram's appeal was not disposed of till July 28, 1962. There was thus no difficulty in consolidating the two appeals and disposing of them by one order at any time between May 5, 1962, and July 28, 1962. We agree with the Tribunal that Mahabir Prasad's appeal was competent under the second proviso to Section 30(1) of the Act.

5. On the question of limitation, the relevant facts are these. Demandnotice was served upon Satya Deo, partner, on March 27, 1962. MahabirPrasad applied for a copy of the assessment order on April 19, 1962. Hegot the copy on May 3, 1962. The appeal was filed by Mahabir Prasad onMay 5, 1962. The question is whether Mahabir Prasad's appeal waswithin limitation.

6. The period of limitation is thirty days. The appeal was filed 39 days after service of notice upon Satya Deo. The Appellate Assistant Commissioner assumed that service upon Satya Deo is to be deemed to be service upon Mahabir Prasad. It is to be noted that Satya Deo was served with the demand notice several years after the dissolution of the firm. It is, therefore, doubtful whether service upon Satya Deo can be treated asservice of the demand notice upon Mahabir Prasad. Even if it is assumed that Mahabir Prasad was constructively served with the demand notice on March 27, 1962, matters do not materially improve for the Commissioner of Income-tax.

7. We must bear in mind that Mahabir Prasad spent 15 days in obtaining a copy of the assessment order. The question arises whether Mahabir Prasad is entitled to exclude that period of 15 days for computing limitation,

8. Mahabir Prasad relied upon Section 67A of the Act. Section 67A stated :

' In computing the period of limitation prescribed for an appeal under this Act or for an application under Section 66, the day on which the order complained of was made, and the time requisite for obtaining a copy of such order, shall be excluded.'

9. Dr. Misra, appearing for the department, contended that Mahabir Prasad is not entitled to exclude the time in obtaining a copy, because it was not necessary for the appellant to file a copy of the assessment order along with the memorandum of appeal. Reliance is placed upon a decision of the Punjab High Court in T. N. Swami & Co. v. Commissioner of Income-tax . It was held in that case that since no certified copy of the appellate order of the Tribunal had to be filed along with an application under Section 66(1) and as the appellate order of the Tribunal was communicated to the assessee by means of a certified copy, the Tribunal was right in not excluding the time taken for obtaining a copy of its order.

10. In that judgment we find a reference to a decision of a Full Bench of the Lahore High Court in Punjab Co-operative Bank Ltd. v. Official Liquidators, Punjab Cotton Press Co. Ltd., [1941] 11 Comp. Cas. 254 ; A.I.R. 1941 Lah. 257 (F.B.), It was hold in that case that the appellant was entitled to exclude the time requisite for obtaining a copy of the judgment appealed against even though under the Rules of the High Court no copy of the judgment had to be filed with the memorandum of appeal.

11. We are in respectful agreement with the decision of the Full Bench of the Lahore High Court. The language of Section 67A of the Act is plain. It is expressly mentioned in the section that the period spent in obtaining a copy of the impugned order shall be excluded. Such exclusion is not subject to any condition that it should be obligatory to file a copy of the impugned order with the memorandum of appeal. The Tribunal in the instant case was, therefore, justified in excluding the time taken by Mahabir Prasad in obtaining a copy of the assessment order. After excluding such period, his appeal was within limitation.

12. We answer both the questions referred to this court in the affirmative, and in Mahabir Prasad's favour. The Commissioner of Income-tax, U.P., shall pay to Mahabir Prasad Rs. 200 as costs of this reference.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //