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Haji Ghulam HusaIn and Sons Vs. Commissioner of Income-tax, U. P. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax References Nos. 160, 161 and 169 of 1949
Reported in[1957]31ITR231(All)
AppellantHaji Ghulam HusaIn and Sons
RespondentCommissioner of Income-tax, U. P.
Cases ReferredMahabir Prasad Niranjan Lal v. Commissioner of Income
Excerpt:
- - arguments were heard and it appears that the assistant commissioner passed orders on the same date, for the appellate orders are dated the 11th september, 1947. copies of these orders were sent to the assessee presumably to communicate to him the orders passed in the appeals and these were received on the 20th september, 1947. the assessee was not satisfied with the decision of the appellate assistant commissioner and preferred appeals to the income-tax appellate tribunal. computation of period of limitation -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. learned counsel for the.....this is a reference under section 21 of the excess profits tax act (read with section 66 (2) of the income-tax act) relating to the chargeable accounting periods ending on 31st of march, 1944, 31st of march, 1945 and 31st of march, 1946. the assessee had preferred appeals under the excess profits tax act from assessments made in respect of the three chargeable accounting periods mentioned above, and the 11th september, 1947, was fixed for hearing of these appeals by the appellate assistant commissioner of excess profits tax at his camp at bareilly. arguments were heard and it appears that the assistant commissioner passed orders on the same date, for the appellate orders are dated the 11th september, 1947. copies of these orders were sent to the assessee presumably to communicate to him.....
Judgment:

This is a reference under section 21 of the Excess Profits Tax Act (read with section 66 (2) of the Income-tax Act) relating to the chargeable accounting periods ending on 31st of March, 1944, 31st of March, 1945 and 31st of March, 1946. The assessee had preferred appeals under the Excess Profits Tax Act from assessments made in respect of the three chargeable accounting periods mentioned above, and the 11th September, 1947, was fixed for hearing of these appeals by the Appellate Assistant Commissioner of Excess Profits Tax at his camp at Bareilly. Arguments were heard and it appears that the Assistant Commissioner passed orders on the same date, for the appellate orders are dated the 11th September, 1947. Copies of these orders were sent to the assessee presumably to communicate to him the orders passed in the appeals and these were received on the 20th September, 1947. The assessee was not satisfied with the decision of the Appellate Assistant Commissioner and preferred appeals to the Income-tax Appellate Tribunal. The appeals were sent on the 11th November, 1947, and were received by the Tribunals office at Bombay on the 18th November, 1947. The Assistant Registrar of the Tribunal made a note that these appeals were not in order as copies of the Excess Profits Tax Officers orders were not furnished. On the 22nd November, these appeals were sent to the Allahabad Bench of the Tribunal for disposal. Notices were sent to the parties for the hearing of the appeals fixing the 2nd June, 1948, as the date for hearing. On this date these appeals were heard by the Tribunal and were dismissed on the following date, the 3rd June, 1948. Against these orders of the Tribunal, the assessee filed three applications supporting to be under section 21 of the Excess Profits Tax Act read with section 66 (1) of the Income-tax Act requesting the Tribunal to refer to this Court certain question of law alleged to arise out of the appellate orders of the Tribunal. These applications were dismissed on the 4th November, 1948, on the ground that the orders of the Tribunal passed on the 3rd June, 1948, were passed under section 33 (2A) of the Income-tax Act and that no question of law arising therefrom could legally be referred to this Court. In the Tribunals opinion questions of law arising out of the orders passed under section 33 (4) of the Income-tax Act alone may be referred to the High Court.

The assessees contention before the Tribunal appears to have been, inter alia :

(1) that in computing the period of limitation 'the date of the order' from which the prescribed period of time is to run means the date of the knowledge of the order as the assessee became aware of the order only on the 20th September, 1947;

(2) that rule 17A of the Excess Profits Tax Rules had been amended by a notification dated the 21st February, 1948, by inserting the words 'of receipt' after the word 'date' and it is the amended rule as existing on the date of the order passed by the Tribunal that should have been applied in the case; and

(3) that in the alternative, section 67 of the Income-tax Act having been made applicable by section 21 of the Excess Profits Tax Act, the period between the date of the order (11th September, 1947) and the date on which the copies were received by the assessee (20th September, 1947) should be excluded in computing copies of the Appellate Assistant Commissioners orders.

These contention did not find favour with the Tribunal which dismissed the appeals as mentioned above. The reference application under section 66 (1) were also dismissed as the Tribunal took the view that the orders passed by the Tribunal dismissing the appeals as barred by time were orders under section 33 (2A), and not under 33 (4) and as such the application for reference were incompetent. On a petition being made to this Court, a Bench of this Court passed an order under section 66 (2) on the 5th October, 1950, directing the Tribunal to state the case and to refer such questions of law as arose in the case. Accordingly the Tribunal has referred the following questions of law.

'1. Whether in view of the language of rule 17A of the Excess Profits Tax Act from the date of the order the limitation of 60 days is to be computed from the 11th September, 1947, or from 20th September, 1947, the date on which assessee received the orders

2. Whether rule 17A as amended by Notification 2, Camp, dated 21st February, 1948, is retrospective in character and applies to the appeals filed before the Tribunal

3. Whether on the facts and in the circumstances of the case, the period of 9 days reckoned from 11th September, 1947, to 20th September, 1947, both days inclusive is the period requisite for obtaining copies of the Appellate Assistant Commissioners orders appealed against

4. Whether section 67A, Income-tax Act, applies to the excess profits tax appeals

5. Whether on the facts and in the circumstances of this case the dismissal of the assessees appeals as barred by limitation after the issue of notices to the parties fixing the date and place of hearing is an order passed under section 33 (2A) of the Income-tax Act or is an order passed under 33 (4) of the Income-tax Act ?'

The first two question relate to the applicability of rule 17A of the Excess Profits Tax Act. Under section 19 (2) of the Excess Profits Tax Act appeals to the Income-tax Appellate Tribunal may be filed within the prescribed time and in the prescribed manner. Section 27 of the Act empowers the Central Board of Revenue to make rules for carrying out the purposes of this Act, and the time and the manner required to be prescribed under section 19 (2) have been provided for by some of the rules. Among the Excess Profits Tax Rules, 1940, rule 17A, as it stood at the time when the appeal to the Tribunal was preferred, reads as follows :

'An appeal to the Appellate Tribunal under sub-section (2) of section 19 of the Act against an order of the Appellate Assistant commissioner of Excess Profits Tax under section 16 or 17 of the Act shall be made at any time before the expiry of 60 days from the date of such order.'

The period of sixty days which is prescribed under this rule was thus to commence running from the date of the order of the Appellate Assistant Commissioner. By a notification dated the 21st February, 1948, the Central Board of Revenue amended this rule by inserting therein after the word 'date' the words 'of the receipt'. The rule, therefore, as amended, provided that the period prescribed should start running from the date of the receipt of the order of the Appellate Assistant Commissioner. If the rule as it originally stood was applicable the appeal, subject to other considerations, would be beyond time. If the amended rule was applicable the appeal would be obviously within time.

Learned counsel for the appellant urged that on the 3rd June, 1948, when the appeals came up before the Tribunal and were dismissed rule 17A stood in its amended form. The Tribunal was not right, it is contended, in applying the provisions which no longer existed. Learned counsel contends that the rule was a rule of procedure and, therefore the law of procedure as existing at the time when the Tribunal had to decide the question was applicable.

We are unable to accept this contention. The question to be decided is as to whether the appeals when filed were or were not within time. The date on which the matter came up for decision before the Tribunal is hardly relevant for the decision of the question. On the date when the appeals were governed was rule 17A in its unamended form. A right of appeal is a statutory right and the statutory provision conferring the right of appeal has to be consulted to determine the nature and extent of that right. Reading section 19 (2) of the Excess Profits Tax Act with rule 17A as it existed on the date when the appeal was filed, it is clear that the appeals were not within time unless the period is enlarged under other provision of the law.

Rule 17A was amended on the 21st February, 1948. If the applicants contention be accepted the appeal to the Tribunal was within time if it came up for consideration before the Tribunal on any date subsequent to the 21st February, 1948. If, on the other hand, the Tribunal had to decide the matter on the 20th February, 1948, or on an earlier date, the appeal would have been found to be beyond time because the question would have had to be decided with reference to the original rule 17A. Thus the appeals filed by the applicant would be barred by time or within time according as the Tribunal had to consider the matter before of after the amendment to rule 17A. What has to be decided is whether the appeals as filed on the 18th November, 1947, were on that date within time or beyond time. In our opinion, the question whether the appeals were or were not within time should be answered with reference to the rule or law prevailing at the time when the appeals were filed.

In rule 17A of the Excess Profits Tax Rules 'the date of the order' is the starting point for the period prescribed within which the appeal had to be filed. The phrase 'from the date of the order' came up for consideration before a Bench of the Madras High Court in A.M. Muthiah Chettiar v. Commissioner of Income-tax Madras. In that case the applicant was assessed to income-tax by an order dated the 4th February, 1948. He had received the order on the 24th February, 1948, and on the 18th February, 1949, he moved a revision application to the commissioner of Income-tax under section 33A (2) of the Income-tax Act. That section reads as follows :

'The Commissioner may, on application by an assessee for revision of an order under this Act passed by any authority subordinate to the Commissioner made within one year from the date of the order...... call for the record of the proceeding in which such order was passed........... may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit.'

The commissioner of Income-tax rejected the application in limine as barred by time. A petition for the issue of a writ was moved, and the question which fell for decision on merits was whether the period of one year mentioned in the section was to be computed from the date when the order was signed by the Income-tax Officer or from the date when it was communicated to the petitioner. Rajamannar, C.J., delivering judgment of the Bench considered some earlier cases of the Madras High Court and took them as supporting the contention of the petitioner that the date of the order does not mean the date when the officer passed the order but the date when such order was either communicated to the party, or the date when it was pronounced or published in such a manner that the party may be deemed to have had notice of it or the date of such pronouncement or publication. The learned Chief Justice considered the view to be salutary and just. He observed :

'If a person is given a right to resort to the remedy to get rid of an adverse order within a prescribed time, limitation should not be computed from a date earlier than that on which the party aggrieved actually knew of the order or had an opportunity of knowing the order, and therefore must be presumed to have had knowledge of the order.'

This view, however, was dissented from by a Bench of the Punjab High Court in Mahabir Prasad v. Commissioner of Income-tax. The learned Judges were of opinion that there was 'no reason for construing the plain words of the statue in any different way.' Reference to articles 48, 48A and 48B, 95 and to several other articles of the Indian Limitation Act would show that where the period prescribed is to run from the date on which the person concerned comes to have knowledge of the order, a clear provision is made to that effect. If the rule says that the period during which an appeal is to be preferred is sixty days from the date of such order, there appears to be no justification for the view that the starting point for limitation is not the date of such order as laid down by the statute but the date when such order is known or is communicated to the appellant.

Our answer to the first question, therefore, is that the limitation of sixty days is to be computed from the 11th September, 1947, the date of the order. Our answer to the second question is that rule 17A as amended by Notification 2, Camp, dated the 21st February, 1928, does not apply to appeals filed to the Tribunal before the date of the notification.

In proper sequence question No. 4 may be answered before we proceed to answer question No. 3.

Section 21 of the Excess Profits Tax Act mention the sections of the Indian Income-tax Act which are made applicable to proceedings under the Excess Profits Tax Act, and section 67A of the Indian Income-tax Act is mentioned as one of the sections which would apply to proceedings under the Excess Profits Tax Act. The answer to this question, therefore, appears to be obvious and it is in the affirmative.

Section 67A of the Income-tax Act which, as mentioned above, applies to appeals under the Excess Profits Tax Act reads as follow :

'67A. Computation of period of limitation - 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.'

The order of the Appellate Assistant Commissioner in the present case appears to have been made on the 11th September, 1947. A copy of that order reached the applicant on the 20th September, 1947. It is admitted that no application was made by the applicant for any copy. It was conceded at the Bar that the usual procedure is that copies of orders of the Appellate Assistant Commissioner are sent to appellants free of charge without any application. There is nothing to show that the order was actually passed in the presence of the assessee and that he was apprised of the order on the 11th September, 1947. Under rule 10 of the Appellate Tribunal Rules made in pursuance of sub-section (8) of section 5A of the Indian Income-tax Act, every memorandum of appeal to the Tribunal a certified copy and an ordinary copy of the Appellate Assistant Commissioners order. The question that has to be decided is as to whether on these facts the period from the 11th September to the 20th September is the period 'requisite for obtaining copies of the Appellate Assistant Commissioners order appealed against.' The answer to this query will determine the question as to whether the appeals were or were not beyond time after excluding the time requisite for obtaining copies within the meaning of section 67A of the Indian Income-tax Act. Learned counsel for the Department has argued that the word 'requisite' has acquired a judicial meaning and has been construed as equivalent to 'properly necessary.' It is argued that in the present case there is no evidence to show as to what was the time actually necessary for obtaining a copy. No application having been made by the applicant, there is no material to enable the Court to hold that the time actually taken in the copy actually reaching the applicant was, in fact, the time 'requisite' for obtaining it. The second objection raised by the learned counsel for the Department is that the applicant having made no application, it was not open to him to seek the protection of section 67A as the copy that he received was not obtained by him.

Learned counsel for the applicant argued that in view of the well settled practice, perhaps under some departmental instructions, when copies of appellate orders are sent without application and free of charge to the appellants by the Appellate Assistant Commissioner, the applicant could not be expected to make an application for a copy. He was entitled to wait for it and that was a legitimate manner of obtaining it. Under the Income-tax Act, section 31 (5) requires the Appellate Assistant Commissioner to communicate the orders passed by him to the assessee and to the Commissioner and the period prescribed for an appeal commences running from the date on which such order is communicated : (section 33 (1), Income-tax Act). There is nothing in law to show how a copy is to be obtained under the Excess Profits Tax Act. Courts have their own rules for issue of copies and invariably when an order is passed by a Court, the party interested is expected to make an application for a copy. We find, therefore, that the making of an application for a copy has been recognised as a usual step for obtaining a copy. Courts do not issue copies without application. But if in proceedings before the Income-tax Authorities copies of the orders are sent to the assessee or the appellant without an application and free of charge, we cannot see why an appellant may not wait for a reasonable time for the copy to reach him and if he does get a copy sent to him without an application we are of opinion that it must be deemed to be a copy obtained by him. Whether any active effort or step is necessary, or whether merely awaiting it is enough, depends on what the procedure is of the Court or the tribunal concerned. In Rama Kishun Sastri v. Kashi Bai, a Division Bench of this Court considered the words 'time requisite for obtaining a copy' used in section 12 of the Indian Limitation Act and held that the application of the rule was not confined to cases where the person appealing has in person or by a properly authorised agent applied for a copy of a judgment or a decree. Agreeing with the view of a learned single Judge of this Court, Stanley, C.J., and Burkitt, J., held that :

'It would be unduly restricting the language of section 12 of the Limitation Act......... to hold....... that the application for a copy of a judgment must necessarily be made by the applicant or somebody proved to have acted in the matter as an agent.'

Learned counsel for the Department has stated that this case has not been dissented from or overruled and is still good law. What appears essential is that the copy should be obtained, whether it is obtained on an application made by the appellant himself or is issued to him under an order of the officer or the authority concerned, is immaterial. As to whether the time actually taken in the issue of the copy was requisite is another point calling for consideration. No evidence has been produced to show that there was any undue delay or laches. We are entitled to presume that the officials concerned have acted properly in the discharge of their duties and as such there is nothing to show that the time actually taken in obtaining the copy was not the time requisite for obtaining it. We Would, therefore, answer this question in the affirmative.

On the fifth question learned counsel for the Department has invited out attention to the provisions of sections 30 and 31 of the Indian Income-tax Act and to several decisions in which the question was considered as to whether the dismissal of an appeal in limine as barred by time by an Appellate Assistant Commissioner was made under section 30 or 31 of the Indian Income-tax Act. The latest case on the question is a Full Bench decision of this Court in Mahabir Prasad Niranjan Lal v. Commissioner of Income-tax, U. P.

Counsel for the Department further argued that if the appeal preferred to the Tribunal is not within time, section 33 (2A) of the Income-tax Act empowers the Tribunal to admit the appeal after the expiry of the period prescribed if it is satisfied that there was sufficient cause for not presenting it within that period. If, however, the Tribunal does not admit the appeal, the order rejecting it should be deemed to have been passed under section 33 (2A) itself and not under section 33 (4). Sub-section 6 of section 33 lays down that the orders passed by the Appellate Tribunal on appeal shall be final save as provided in section 66. It may be helpful to quote these provisions :

'33 (2A). The Tribunal may admit an appeal after the expiry of the sixty days referred to in sub-sections (1) and (2) if it is satisfied that there was sufficient cause for not presenting it within that period. (4) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner. (6) Save as provided in section 66 orders passed by the Appellate Tribunal on appeal shall be final.'

It is contended that the Appellate Tribunal may give the parties to an appeal an opportunity of being heard and pass orders thereon only when a proper appeal filed within time is before the Tribunal and section 66 provides for a reference to the High Court only from an order passed under sub-section (4) of section 33. The argument, therefore, is that the order of the Tribunal rejecting the appeal as barred by time is not an order under section 33 (4) and, therefore, a reference to this Court is incompetent.

Learned counsel has invited our attention to some of the provisions of section 30 and 31 of the Indian Income-tax Act as giving similar powers to Appellate Assistant Commissioner of Income-tax and has relied upon a decision of the Supreme Court in Commissioner of Income-tax v. Arunachalam Chettiar, and on a Full Bench decision of this Court in Mahabir Prasad Niranjan Lal v. Commissioner of Income-tax.

The Income-tax Appellate Tribunal came into existence under Part II of the Indian Income-tax (Amendment) Act, 1939. This part of the Amending Act came into operation on the 25th January, 1941. Till then the orders passed by the Appellate Assistant Commissioner were subject to an appeal under section 18 of the Excess Profits Tax Act. In certain cases the Commissioner had the power to call for the record of the proceedings and to pass such orders thereon as he thought fit. On the coming into operation of Part II of the Amending Act, an appeal to the Tribunal was provided. The provision runs as follows :

'19 (2). On the coming into operation of Part II of the Indian Income-tax (Amendment) Act, 1939, sub-section (1) shall cease to have effect, but thereafter any Excess Profits Tax Officer or any person in respect of whose business an order is passed by an Appellate Assistant Commissioner under section 16 or section 17 may, within the prescribed time and in the prescribed manner, appeal against such order to the Appellate Tribunal constituted under the Indian Income-tax Act, 1922, and that Tribunal shall have all such powers in disposing of the appeal as it has in respect of appeals preferred to it under the Indian Income-tax Act, 1922.'

It would be helpful to quote the provisions of the Indian Income-tax Act relating to the appellate powers of the Tribunal contained in section 33 of the Indian Income-tax Act.

The section reads as follows :

'33. (1) Any assessee objecting to an order passed by an Appellate Assistant Commissioner under section 28 or section 31 may appeal to the Appellate Tribunal within sixty days of the date on which such order is communicated to him.

(2) The Commissioner may, if he objects to any order passed by an Appellate Assistant Commissioner under section 31, direct the Income-tax Officer to appeal to the Appellate Tribunal against such order, and such appeal may be made within sixty days of the date on which the order is communicated to the commissioner by the Appellate Assistant Commissioner :

(2A) The Tribunal may admit an appeal after the expiry of the sixty days referred to in sub-sections (1) and (2) if it is satisfied that there was sufficient cause for not presenting it within that period.

(3) An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner, and shall, except in the case of an appeal referred to in sub-section (2), be accompanied by a fee of one hundred rupees.

(4) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard pass such orders thereon as it thinks fit and shall communicate any such orders to the assessee and to the Commissioner.

(5) Where as the result of an appeal any change is made in the assessment of a firm or association of persons or a new assessment of a firm or association of persons is ordered to be made, the Appellate Tribunal may authorise the Income-tax Officer to amend accordingly any assessment made on any partner of the firm or any member of the association.

(6) Save as provided in section 66, orders passed by the Appellate Tribunal on appeal shall be final.'

The section provides that the appeal to the Tribunal may be preferred within sixty days of the date on which the order of the Appellate Assistant Commissioner is communicated to the assessee or the Commissioner and sub-section (2A) of section 33 empowers the Tribunal to admit an appeal after the expiry of the sixty days referred to in sub-sections (1) and (2) if it is satisfied that there was sufficient cause for not presenting it within that period. The power of the Tribunal, therefore, referred to in sub-section (2A) is one with specific reference to an appeal preferred after the expiry of the period prescribed in sub-sections (1) and (2).

In the present case if the period of sixty days is computed from the date on which the order of the Appellate Assistant Commissioner was communicated to the assessee as provided in section 33 (1), the appeal is evidently within time and no question of any exercise of the powers under section 33 (2A) arises. The difficulty has arisen because rule 17 of the Excess Profits Tax Rules prescribes the time mentioned in section 19 (2) and, therefore, section 33 (1) is inapplicable. Section 19 (2) provides that the Tribunal shall have all such powers in disposing of appeals under the Excess Profits Tax Act as it has in respect of appeals preferred to it under the Indian Income-tax Act, 1922. This would mean that sub-sections (4), (5) and (6) of section 33 would be applicable to the appeals before the Tribunal under the Excess Profits Tax Act. The question that arises is whether section 19 (2) of the Excess Profits Tax Act also makes sub-section (2A) of section 33 of the Indian Income-tax Act applicable to appeals under the Excess Profits Tax Act and whether the Tribunal has power to reject an appeal filed beyond time in limine. It has urged that the power vested in the Tribunal to admit an appeal after the Expiry of the period prescribed under sub-section (2A) of section 33 of the Indian Income-tax Act can hardly be considered to be a power to dispose of an appeal. It may properly be considered to be a power to validate an appeal which is not otherwise competent. It should therefore be held that sub-section (2A) of section 33 of the Indian Income-tax Act, which makes a provision for admission of an appeal barred by time, is not a provision made applicable to appeals under the Excess Profits Tax Act under section 19 (2) of that Act. On this view, it is further urged that the Tribunal is not competent to reject an appeal under the Excess Profits Tax Act in limine which power in the case of an appeal under the Indian Income-tax Act can be held to be impliedly conferred under sub-section (2A) of section 33 of that Act. If this view be accepted the conclusion to which we are led is that an appeal under the Excess Profits Tax Act can only be disposed of by the Tribunal under sub-section (4) of section 33 of the Indian Income-tax Act, so that, in the present case also the order of the Tribunal must be held to be an order under section 33 (4) of the Indian Income-tax Act and a reference to this Court under section 66 of the Indian Income-tax Act would be competent. Even if this view be not accepted, it appears to us that in the present case the order out of which the present reference has arisen must be held to be an order under sub-section (4) of section 33 of the Indian Income-tax Act. In case sub-section (2A) of section 33 of the Indian Income-tax Act is held to be applicable and it be inferred that the Tribunal had the power to reject the appeal in limine on the ground that it was time-barred, the facts show that the Tribunal did not actually exercise that power of rejecting an appeal before admission on the ground that it was filed beyond time. If an appeal is actually admitted and notice is issued and thereafter it is disposed of after giving an opportunity to the parties of being heard as required under sub-section (4) of section 33, such disposal of an appeal must be held to be in pursuance of the power conferred on the Tribunal by sub-section (4) of section 33 of the Income-tax Act and not in exercise of the power of rejecting an appeal in limine before admission. These appeals were received by the Allahabad Bench of the Tribunal for disposal on 22nd November, 1947. They were not rejected either by the Tribunal at Bombay or by the Allahabad Bench of the Tribunal immediately after the receipt of the appeals. Notices were sent to the parties for the hearing of the appeals fixing the 2nd June, 1948, as the date of hearing. On that date both the parties were heard and then the appeals were dismissed on the 3rd June, 1948, on the ground that they were barred by time. Though the decision disposing of the appeal was based on the question of limitation it was clearly a decision given after hearing the parties, as required by sub-section (4) of section 33 of the Indian Income-tax Act. A similar question arose relating to the dismissal of an appeal by an Appellate Assistant Commissioner as barred by time in Mohd. Naim Mohd. Alam v. Commissioner of Income-tax, U. P. A Bench of this Court took the view that where an Appellate Assistant Commissioner dismisses an appeal as barred by time after admitting it and issuing notice to the parties the dismissal is under section 31 of the Act and is not a refusal to admit it under section 30 (2). We are, therefore, of opinion that the order disposing of the appeals passed by the Tribunal, was an order under sub-section (4) and not one under sub-section (2A) of section 33 of that Act. Nor was it an order passed in the exercise of any other power which the Tribunal might be said to possess for rejecting an appeal in limine on the ground of its being time-barred.

The decision of the Supreme Court in Commissioner of Income-tax v. Arunachalam Chettiar, related to an entirely different question. In that case the Income-tax Officer on receipt of an order passed in appeal by the Income-tax Appellate Tribunal had acted in a manner not strictly in accordance with the decision of the Tribunal. The assessee preferred an appeal to the Appellate Assistant Commissioner who declined to admit the appeal and took the view that the order passed by the Income-tax Officer was not an assessment under section 23 and no notice of demand had been served on the assessee under section 29 of the Act. The Appellate Assistant Commissioner however expressed the view that the assessees remedy might lie in a miscellaneous application to the Tribunal complaining that the Income-tax Officer had either misconstrued or had not given effect to the order of the Income-tax Tribunal. The assessee moved the Appellate Tribunal by a miscellaneous application. The Appellate Tribunal canceled the findings recorded by the Income-tax Officer and directed him to revise the computation of the income-tax according to the directions given in the appellate order of the Tribunal. The last order having been served on the Commissioner of Income-tax he applied to the Tribunal under section 66 (1) of the Income-tax Act and prayed that certain questions formulated by him in his petition be referred to the High Court. The contention was that the Appellate Tribunal had no jurisdiction in law to entertain, consider and pass the order which it did on the miscellaneous application saying that it was neither an appeal under section 33 of the Indian Income-tax Act nor could it be regarded as a rectification under section 35 of any mistake committed by the Bench. The Appellate Tribunal took the view that although no specific provision was made in the Income-tax Act by which it could give effect to its order and explain any ambiguity in such an order by a later order in any miscellaneous application filed by any party, the said power nevertheless was inherent in the Tribunal. The Tribunal accordingly thought that a point of law arose and referred the following question to the High Court, namely, 'Whether in the facts and circumstances of this case the order of the Bench dated the 20th February, 1946, in the miscellaneous application is an appropriate order and is legally valid and passed within the jurisdiction and binding on the Income-tax Officer ?'

On an application by the Commissioner another question was added and the case as referred came up for consideration before a Bench of the Madras High Court which held that the reference under section 66 (1) was incompetent in view of an earlier decision of that Court which they felt to be binding on them. The Commissioner obtained leave to appeal to the Supreme Court, and it was contended that section 66 (1) of the Income-tax Act only contemplates an application for reference of a question of law arising out of 'such order', which clearly means an order made under section 33 (4), and therefore if there is no valid order under that section, no question of law can be said to arise out of 'such order' and consequently the Tribunal can have no jurisdiction to make any reference under section 66 (1). It was urged that the jurisdiction of the Tribunal and of the High Court is conditional on there being an order by the Appellate Tribunal which may be called one under section 33 (4) and on there being a question of law arising out of such an order. There being no appeal before the Tribunal but only a miscellaneous application, the order of the Tribunal, which was said to give rise to the questions of law sought to be referred, was not an order under section 33 (4) because there was no appeal and it was argued that the reference to the High Court was incompetent. At page 187 (of 23 I.T.R.) Das, J., delivering, the judgment of the Court observes as follows :

'It will be recalled that when on 19th November, 1945, the Appellate Assistant Commissioner declined to admit the appeal, the assessee did not prefer any appeal but only made a miscellaneous application before the Appellate Tribunal. There is no provision in the Act permitting such an application. Indeed, in the statement of the case the Appellate Tribunal states that in entertaining that application and correcting the error of the Income-tax Officer it acted in exercise of what it regarded as its inherent powers. There being no appeal under section 33 (1) and the order having been made in exercise of it supposed inherent jurisdiction, the order cannot possibly be regarded as one under section 33 (4) and there being no order under section 33 (4) there could be no reference under section 66 (1) or (2) and the appellate court properly refused to entertain it.'

The view taken was that the Appellate Tribunal had no appeal before it and as such there could be no order under section 33(4) of the Act. This case, in our opinion, is not an authority for the proposition that if an appeal under the Excess Profits Tax Act is preferred to the Appellate Tribunal and the Appellate Tribunal dismissed that appeal as barred by time the order passed by the Tribunal could not amount to an order disposing of the appeal within the meaning of section 19 (2) of the Excess Profits Tax Act read with section 33 (4) of the Income-tax Act.

The other case, Mahabir Prasad Niranjan Lal v. Commissioner of Income-tax, mentioned above, is one where an appellate Assistant Commissioner had rejected an appeal as barred by time and the question was as to whether the order passed by the Appellate Assistant Commissioner was one under section 13 of the Income-tax Act from which the Act provided no appeal to the Appellate Tribunal or whether it was an order under section 31 of the Income-tax Act from which an appeal did lie to the Tribunal. The learned Judges, relying on certain observations in Arunachalams case, took the view that no appeal lay to the Appellate Tribunal under section 33. The facts of the case were evidently different from the facts of the present case. In the present case the appeal to the Appellate Assistant Commissioner was admittedly an appeal preferred within time. The appeal, therefore, to the Tribunal was competent and it was therefore an appeal under section 33 of the Income-tax Act read with section 19 (2) of the Excess Profits Tax Act. The rule laid down therefore by the Full Bench does not enable us to answer the question raised in the present case.

We are, therefore, of opinion that the order of the Appellate Tribunal dismissing the assessees appeal as barred by limitation is an order passed under section 33 (4) of the Income-tax Act read with section 19 (2) of the Excess Profits Tax Act and is not an order under section 33 (2A) of the Income-tax Act.

Costs are allowed to the applicant which we assess at Rs. 300. We fix the fee of Shri Jagdish Swarup, counsel for the Income-tax Department, at the same amount.

Reference answered accordingly.


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