MANCHANDA J. - This is a case stated under section 66(2) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act).
The question referred is :
'Whether, on the facts and circumstances of the case, an appeal against the order passed by the appellate Assistant Commissioner lay to the Appellate Tribunal ?'
The facts leading up to this reference are these :
The relevant year of assessment is 1943-44. The assessee is a firm doing calendering business. Notice under section 22(4) of the Act calling upon the assessee to produce its account books was issued. The assessee did not fully comply with this notice. The assessment was made under section 23(3) of the Act estimating the assessees total income at Rs. 35,000 against Rs. 1,977 returned. On appeal, the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal) reduced the income to Rs. 20,000. The Income-tax Officer thereupon imposed a penalty of Rs. 4,845 under the provisions of section 28(1) (c) of the Act on the 4th of June, 1947. The notice of demand was served on the assessee on the 15th of July, 1947. As the assessee did not receive the copy of the order imposing the penalty, he made an application to the Income-tax Officer for a certified for a copy of the order. The application was received on the 31st of July, 1947, and, when ready, it was issued by the Income-tax Officer under certificate of posting on the 5th of December, 1947. The assessee preferred an appeal to the appellate Assistant Commissioner on the 13th of December, 1947. As the appeal was not filed within the prescribed period of thirty days of the receipt of the demand notice, the appellate assistant Commissioner, after hearing the assessee, refused to admit the appeal as being time barred. He rejected the assessees explanation that the notice dispatched by the Income-tax Officer on the 5th of September, 1947, had not been received by him and delay was consequently held to be not satisfactorily explained. Against the said order of the Appellate Assistant Commissioner, an appeal was preferred before the tribunal. A preliminary objection was raised by the departmental representative that the order passed by the appellate Assistant Commissioner being one under section 30, sub-clause (2), and not under section 31 of the Act, no appeal lay to the Tribunal against such an order. The Tribunal, for the reasons given by it in its order dated the 21st of August, 1950, held that the appeal before the appellate Assistant Commissioner was barred by limitation and, therefore, the appeal before the Tribunal was incompetent as being against an order passed under section 30 and not under section 31 of the each. An application under section 66(1) of the Act was made but that was rejected. This court, on being moved, directed the Tribunal to make a reference which has accordingly been made and the question set out hereinabove has been referred for the opinion of this court.
There was a conflict between the various High Courts on the question referred in this reference but the supreme Court in the case of Mela Ram & Sons v. Commissioner of Income-tax, set it at rest by holding that an order of the Appellate Assistant Commissioner rejecting the appeal as time-barred is an order passed under section 31 and not under section 30, sub-clause (2), of the Act, and as such an appeal lies from that order to the Tribunal and it makes no difference whether the order of dismissal is made before or after the appeal is admitted by the Appellate Assistant Commissioner.
The matter now stands concluded and the question, therefore, referred has to be answered in the affirmative and in favour of the assessee. The assessee is entitled to the costs of this reference which are fixed at Rs. 200.
Question answered in the affirmative.