BISHAMBHAR DAYAL C.J. - This order shall govern the disposal of Miscellaneous Civil Case No. 190 of 1969.
These are two Miscellaneous Civil Cases being applications under section 66(3) of the Indian Income-tax Act, 1922. The Tribunal rejected the first application of the assessee for referring the case to the High Court on the ground that it was barred by time because the remittance of Rs. 100 was not received within time. It was also held that this application for reference was not sufficient for referring all the questions asked for in the application as they related to two cross-appeals and that a second application for reference was also necessary.
The facts which have given rise to the questions may be stated in short. The assessee filed an appeal against the assessment order dated 18th September, 1962, before the Appellate Assistant Commissioner of Income-tax. His appeal was partly allowed and a sum of Rs. 4,800 was deleted from the income as proper expense on entertainment. Against this appellate order there were two appeals before the Tribunal. The assessees appeal was No. 5587 of 1966-67. The Income-tax Officer also appealed against this deletion of Rs. 4,800 and his appeal was No. 5594 of 1966-67. The Tribunal consolidated both these appeals, heard them together and disposed them of by one order dated 2nd August, 1968. By this order the Tribunal upheld the original assessment order, allowed the appeal of the Income-tax Officer and dismissed the petitioners appeal. The result of this order was that the original assessment order was maintained and the alteration made by the Appellate Assistant Commissioner was wet aside. This order of the Tribunal was communicate to the assessee on 2nd September, 1968. The assessee on 28th October, 1968, sent an application containing all the relevant annexures asking for a reference to the High Court of questions which covered both the appeals, i.e. of the assessee as well as of the Income-tax Officer. The same day it also dispatched a money order of Rs. 100, the necessary fee which is required to be accompanied under section 66 of the Income-tax Act, and annexed the postal receipt with the papers. This application along with the postal receipt was received by the Registrar of the Tribunal on 30th October, 1968; but the money order itself was received on 4th November, 1968. the limitation for filing the application expired on the 1st November, 1968. The Registrar informed the assessee that one application relating to these two appeals was not competent and it was required to choose to which of the two appeals did this application relate and to file another application relating to the other appeal. The assessee protested against this objection to it application; but in any case it also complied with the order under protest and made a fresh application relating to the appeal by the Income-tax Officer. With this application also it sent another money order for Rs. 100.
The Tribunal at first disposed of the second application and the money reference and held it to be time-barred, as both the application and the money had been received beyond time. The Tribunal then took up the first application which had been received in time and dismissed it on the ground that the money order had been received beyond time. Against these orders these two connected applications have been made.
The contention of learned counsel for the applicant is that the applicant having dispatched Rs. 100, the necessary fee, on 28th October, 1968, along with its first application and having sent the money order receipt along with the application, it was substantial compliance with the requirement of the deposit and, therefore, this application could not be rejected as time-barred. His next contention is that, in the circumstances of the case, since both the appeals really related to the same assessment between the same parties and the same period, they were two appeals only in form and the order which disposed of both these appeals was really only one order which directed that the assessment had to be maintained and that the assessees first application for reference against this order is competent containing all the questions of law which arose out of this order. According to learned counsel, it was not necessary for the assessee to file a second application formally relating to two appeals by number.
The contention on behalf of the department is that section 66 of the Indian Income-tax Act, 1922, provided that the money should be accompanied with the papers and if, therefore, the money, even if it did not a company the papers, had reached the office within limitation, it was possible to take the view that there was substantial compliance, But, in case the money was not received by the Tribunal within limitation, it cannot possibly be said that there was compliance with the provisions of the section and, consequently, the order of the Tribunal was correct.
The relevant part of section 66(1) of the Income-tax Act, 1922, is as follows :
'Within sixty days of the date upon which he is served with notice of an order under sub-section (4) of section 33 the assessee or the Commissioner may, by application in the prescribed form, accompanied where application is made by the assessee by a fee of hundred rupees, required the Appellate Tribunal....'
In this part of the section there are two phrases which are particularly to be noted on which we will have to make our observations in the course of our order. The first phrase is 'served with notice of an order under sub-section (4)'. The scope of this phrase will be considered in due course. The next phrase is 'accompanied... by a fee of one hundred rupees'. The section itself does not provide the actual procedure according to which this hundred rupees are to be deposited in the office. It may also be noted that the proviso to sub-section (1) of section 66 states that in case the Tribunal refuses to state a case, the assessee may, within thirty days from the date on which he has received notice of refusal, withdraw his application and, if he does so, the fee paid shall be refunded, so that the purpose of making this deposit is to utilize the same if the Tribunal actually makes a reference. Till that stage arrives, the money is simply kept in deposit for being used which indicates that at the time when the actual application is made, the deposit is not for the purpose of that application itself being heard. A form is prescribed under rule 22A of the Indian Income-tax Rules, 1922. There is a note added to the form, which is as follows :
'N. B. - The application when made by an assessee must be accompanied by a fee of one hundred rupees. It is suggested that the fee should be credited in the Treasury or a branch of the Imperial Bank of India or a branch of the Reserve Bank of India, after obtaining a challan from the Income-tax Officer or the Excess Profits Tax Officer and the triplicate challan sent to the Tribunal with the application. The Appellate Tribunal will not accept cheques, drafts, hundies or other negotiable instruments.'
This note, therefore, clarifies the words of the section itself and thereby indicates that the provision of the section regarding accompanying of fee of Rs. 100, does not necessarily mean that a cash amount of Rs. 100 must in each case accompany the application and must reach the office. The alternative expressly provided as a suggestion is the process of deposit either in the treasury or in one of the banks mentioned. The challan has to be passed by the Income-tax Officer and not by the office of the Tribunal so that if such a challan is accompanied with the papers, the money does not really the office of the Tribunal. The office merely receives an assurance that the money has reached the Government through some department. It has also to be noted that there are certain things which have been prohibited by this note, e.g., payment by cheques or other negotiable instruments. It is silent about payment being sent by money order or through other methods not specified either way. These provisions make it clear that the method by which the money has to reach the Tribunal is flexible and that any reasonable process can be utilized for sending the money to the Tribunal. It is expressly provided under the rules that the application and the papers themselves can be sent by registered post. Where the assessee resides outside the station, he sent by registered post. Obviously, the cash cannot accompany the application and he has to send it either through post office or through some bank. If under the note to the form a payment to the bank and the receipt thereof is considered as sufficient payment within time, we see no reason why the assessee, who has made a payment to the post office and has attached the receipt of such payment with the papers, should not be treated as having substantially complied with the requirements of the Act.
Exactly on this point there is a divergence of opinion among the High Courts. In PL. SP. NK. Nagappa Chettiar v. Commissioner of Income-tax, a Division Bench of the Madras High Court came to the conclusion that the despatch of a money order was a sufficient compliance with provisions of the Act. A different view has been taken by the Allahabad High Court in Hajee Mahboob Bux Ehhan Illahi v. Commissioner of Income-tax. But the same High Court took a more lenient view in Chatarbhaj Chogalal v. Commissioner of Income-tax. In that case the assessee sent his application within time, but he made the deposit in the treasury subsequently and forwarded the challan by post. That challan was received three days beyond time and it was held that although the challan did not reach within time, yet there was sufficient compliance with the provisions of the Act. We are of the opinion that in all the circumstances of the present case, there was sufficient compliance with the provisions of the Act and the fact that the money order was received a few days late, although dispatched in time, cannot make the application time-barred and incompetent.
The next question for consideration is whether it was necessary to file two separate application for making a reference of the questions arising out of the order. As already pointed out above, section 66(1) refers to the service of the notice of an order under sub-section (4) of section 33 against which the assessee has to make an application. Section 33 deals with appeals orders of the Appellate Assistant Commissioner. The relevant part of sub-section (1) of section 33 is as follows :
'Any assessee objection to an order passed by an Appellate Assistant Commissioner.....'
Sub-section (2) also speaks of an 'order passed by an Appellate Assistant Commissioner under section 31....' the appeal before the Tribunal, therefore, is competent if the assessee is not satisfied with order passed. It is not against the reasons or argument that may or may not have appealed to the Appellate Assistant Commissioner. These reasons will raise the question by what has to be appealed against is the order. In a case where there is one order by the assessing authority and against that one order two cross-appeals have been filed and as a result of the cross-appeals that original order is altered to a certain extent after disposal of the arguments advanced by the two parties in their respective appeals, the ultimate order which results by way of disposal of the two appeals is the one order which alters the original order in particular way. We are of opinion that in such a case where there is only one assessment order out of which two appeals arise and as a result of the disposal of both the appeals one order is passed amending the assessment order or refusing to amend the order, there is only one order against which it is necessary to file only one application under section 66 of the Act. Sub-section (4) of section 33 a enjoins the Appellate Tribunal, after hearing both the parties to the appeal, to 'pass such orders thereon as it thinks fit'. This order, to our mind, must be the order which affects the original assessment. the order here does not mean only the reasoning in support of the order. It is the operative order that matters and which affects the assessment. whether this order is as a result of two cross-appeals or is as a result of one appeal only is immaterial. The contention on behalf of the department is that this order refers to an order 'thereon' and that this means an order upon each of the appeals which is heard. To our mind, that does not make any difference, for singular includes plural. If two appeals are heard against an assessment, then the orders would mean orders upon both those appeals affecting the same assessment. Similarly, reference was made on behalf of the department to the form in which the application has to be made and it was pointed out that in that form the assessee has to indicate the number of the appeal against which he wants to file the application. It was contended that in this column only one appeal could be indicated. We are unable to agree with this contention. As stated above, singular always includes plural and if the order with which the assessee is aggrieved has been passed upon hearing two appeals, he can certainly mention the numbers of both the appeals in order to indicate that the order from which he is aggrieved is the combined order passed in the two appeals. We may make it clear here cases in which two or more assesses are concerned, so that original assessment orders are different in their cases, cannot be covered by what has been said above by us, because in that case several appeals may be disposed of by one appellate order but the operative orders would be different in respect of different cases and it cannot be said that there was only one order within the meaning of section 66 of the Act. So also there may be different cases for different periods in relation to the same assessee. In that case also, the assessment orders being different, the operative orders in appeal would also be different for the different periods and it would not be possible to say that the ultimate operative order is only one order although it has been pronounced after hearing two or more appeals.
We are, therefore, of opinion that the Tribunal was wrong in asking the petitioner to make a choice and also rejecting the first application as time-barred. The papers are, therefore, returned to the Tribunal with a direction to treat the application dated 28th October, 1968, as having been made within time and in relation to all the questions raised by the petitioner in the application relation to all the questions raised by the petition in the application relating to the two cross-appeals filed by the petitioner as well as the department.
Parties will bear their own costs in these two cases.