BARMAN. J. - The point involved for decision of this full Bench is one of limitation, arising out of two applications under section 66(3) of Income-tax Act (XI of 1922), S.J.C. No. 4 of 1956 relating of the assessment year 1950-51 and S.J.C. No. 5 of 1956 relating to the assessment year 1951-52. The facts relevant for our purpose are short and simple. In both the cases notice under section 33(4) was received by the assessee on June 17, 1955, and the notice was dated May 30, 1955, informing him of the result of the appeal before the Tribunal. The assessee sent the reference applications under section 66(1) by registered post on August 12, 1955, and the application were received by the Tribunal on August 18, 1955, while the last date for filing the reference applications already expired on August 16, 1955. The Tribunal accordingly rejected the applications as being out of time.
The only point for consideration is whether on construction of section 66(1) of the Income-tax Act (XI of 1922) read with rules 7, 8 and 36 of the Appellate Tribunal Rules, 1946, the said applications were barred by limitation. The question is whether the posting of the applications in post office amounted to making of applications on the date on which they were posted or on the date they were received in the office of the Tribunal. In other words, to put it more simply, the question for determination is whether,'the date of presentation' or'the date of posting' will be the essential date for the purpose of limitation. For convenience of appreciation and ready reference, section 66(1) and rules 7, 8 and 36 of the Appellate Tribunal Rules, 1946, -made in pursuance of sub-section (8) of section 5A of the Act, - are set out as follows :
'66. 'Statement of case by Appellate Tribunal to High Court-(1) 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 one hundred rupees, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall within ninety days of the receipt of such application draw up a statement of the case and refer it to the High Court.
Provided that, if, in the exercise of its powers under sub-section (2), the Appellate Tribunal refuses to state a case which it has been required by the assessee to state, the assessee may, within thirty days from the date on which he receives notice of the refusal to state the case, withdraw his application and, if he does so, she fee paid shall be refund.'
Rule 7. '(1) A memorandum of appeal to the Tribunal shall be presented by the appellant in person or by an agent to the Register at the headquarters of the Tribunal, at Bombay, or to an officer authorised in this behalf by the Registrar, or sent by registered post addressed to the Registrar or to such officer.
(2) A memorandum of appeal sent by post under sub-rule (1) shall be deemed to have been presented to the Registrar or to the officer authorised by the Registrar, on the day on which it is received in the office of the Tribunal at Bombay, or, as the case may be, in the office of such officer.
Rule 8. 'The Registrar, or as the case may be the authorised officer, shall endorse on every memorandum of appeal the date on which it is presented or deemed to have been presented under rule 7 and shall sign the endorsement.
Rule 36. 'Rules 7, 8, 13, 20, 22, 23, 26 and 33 shall apply mutatis mutandis to an application under sub-section (1) of section 66.'
The assessee-petitioner strongly relied upon a decision of our High Court reported in Sri Popsing Rice Mill v. Commissioner of Income-tax In the said decision it was held that rule 7(1) should be read without sub-rule (2) and that when the applicant had done all that he was required, in his power, to do by sending the application by registered post in time, in order to require the Tribunal to refer to the High Court any question of law arising out of its order, there was substantial compliance with the law and the application could not be rejected as barred by limitation even though it reached the Tribunal beyond the period of limitation. A different view, however, was taken by some of the other High Courts hereinafter discussed. There is a decision of the Bombay High Court in the case of Bansilal Gulabchand v. Commissioner of Income-tax laying down that the High Court had no power to excuse delay; the only question which has got to be determined in an application under section 66(1) is whether the Tribunal was justified in rejecting the application as barred by limitation. and the Tribunal had no power to condone the delay. In this context a recent decision of the Supreme Court in Commissioner of Income-tax v. Ogale Glass Works Ltd. also appears to throw some light on the question. In this state of the conflicting decisions, on a previous occasion a Division Bench of this court had referred the question to be decided by another Full Bench of this Court with the observation that the matter involved an interesting question of law as to whether in a case-where a sum of money is remitted by money order by an assessee along with an application under section 66(1) of the Income-tax Act before the expiry of the period of limitation but is received in the office of the Income tax Appellate Tribunal after the expiry of the period of limitation,-such an application will be a valid application for the purpose of sub-section (1) of section 66 or otherwise whether it would be time-barred. Before the said Full Bench, the occasion to decide this question of law did not arise as it was found that the amount was not at all sent by post on the date alleged and consequently the question of law was not decided and was left open : (Bachulal & Co. v. Commissioner of Income-tax). In the present case, the Tribunal, in rejecting the said applications under section 66(1) as out of time relied upon certain observations in the said decision of the Full Bench as supporting the order of rejection; and the Division Bench, before which these application came to be heard, considered that the matter be referred to a Full Bench and the question involved finally decided.
In view of the other High Courts in India having dissented from the decision of this High Court in Sri Popsing Rice Mill V. Commissioner of Income-tax cited above, it has become necessary to reconsider the correctness of the said decision.
It was contended on behalf of the assessee that it is significant that in case of appeals against orders of the Appellate Assistant Commissioners, section 33(2A) provides that the Tribunal may admit an appeal after the expiry of 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; that in the absence of similar provisions for application for reference High Court, section 66(1) and rule 7 of the Appellate Tribunal Rules should be liberally construed so as to give similar powers to the Appellate Tribunal to condone such delay in making of applications under section 66(1) of the Act. The learned counsel, while interpreting that under rule 36 of the Appellate Tribunal Rules., rules 7 and 8 along with other rules shall apply mutatis mutandis to an application under sub-section (1) of section 66, contended that sub-rule (2) of rule 7 should be ignored in case of an application under section 66(1). His point was that the words, 'Mutatis mutandis' allow such necessary changes in the application of the rules, so as to permit ignoring altogether sub-rule (2) of rule 7, because there is no provision for condonation of delay in the making of applications under the Act, as contained in sub-section 2(A) of the said section. It was further contended that the High Court had extensive jurisdiction under section 66(3) to examine the correctness of the Appellate Tribunals decision even with regard to condonation of delay in appropriate cases. In other words, according to the assessee-petitioner, section 66(3) gives power of condonation of delay as section 33(2A).
All these contentions overlook the very language of the provisions as laid down by the Legislature in the Act and the rules thereunder as they stand. Sub-rule (2) of rule 7 makes it clear that until the application is actually received by the Tribunal it will not be deemed to have been presented. The words mutatis mutandis cannot be so loosely construed as to ignore altogether sub-rule (2) which, indeed, with necessary changes, can be made applicable in case of applications under section 66(1). It sounds to me to be unreasonable construction to contend that sub-rule (2) will not be at all applicable in case of an application under section 66(1). That apart, the application of sub-rule (2) appears to me to be mandatory for the words are shall be deemed. Besides, any other construction would make the application of rule 8 altogether nugatory. There is a significant aspect in that rule 8 provides that the registrar shall endorse on every application the date on which it is presented or deemed to have been presented under rule 7 and shall sign the endorsement. If, indeed, the date of posting be accepted as the date of presentation, then I do not see how the Registrar can endorse on the application the date on which it is presented,-which, according to the assessee, is the date of posting, - because the Registrar will not then be in a position to know on what date the application was posted. IN my opinion, rule 8 appears to be the key to the entire position, indicating the intention of the Legislature. So it must necessarily mean that the date of presentation is the date when the application is actually received by the Registrar, when he can, on receipt, make the necessary endorsement as required by law.
With regard to the learned counsels contention that under section 66(3), the High Court, while examining the correctness of the Appellate Tribunals decision, has the power to condone delay-this argument does not appear to be tenable for the very reason that the meaning of 'correctness of the Appellate Tribunals decision' in section 66(3) cannot be extended so as to allow condonation of delay by the High Court - which power the Appellate Tribunal itself has not been given under section 66(1). It is clear from section 66(7A) that section 5 of the Indian Limitation Act (IX of 1908) shall apply to an application to the High court by an assessee under sub-section (2) or sub-section (3) of section 66. It is significant that sub-section (7A) of section 66 has not been made applicable to an application under section 66(1) of the Act. In other words, the benefit of section 5 of the Limitation Act is only confined to an application under sub-sections (2) and (3) of section 66 of the Act and not beyond them. Therefore, it is impossible to give such a construction, so as to admit an application which is prima facie barred by limitation when in fact no power is given to the Tribunal itself to condone delay in making an application under section 66(1) as aforesaid. If the Tribunal had been given power of that nature and if the Tribunal had come to the conclusion that the assessee had failed to show sufficient cause for excusing any delay, then it would have been open to the High Court to go in to that question and take a different view from the one taken by the Tribunal. But when the High Court finds that such power is not given to the Tribunal at all, it is difficult to understand how the High Court can even consider the application and direct the Tribunal to treat the application as made within the time allowed. This view appears to find support in a decision of the Bombay High Court in Bansilal Gulabchand v. Commissioner of Income-tax where Chief Justice Chagla in his judgment expressed that it is impossible to take the view that by reason of sub-section (7A) of section 66 the High Court has been given power to excuse delay in presenting an application to the Tribunal under section 66(1) because in term sub-section (7A) only refers to an application to the High Court by an assessee under sub-sections (2) and (3).
This lead us to the consideration of the correctness of the Division Bench decision of this court in Sri Popsing Rice Mill v. Commissioner of Income-tax which so far, has been an impediment to this court taking a contrary view, inspite of the dissentient note of the other High Courts in India. In the said decision, their Lordships, while giving a benevolent construction to section 66(1) of the Act and the relevant rules thereunder, held that reading section 66(1) in the light of rule 7, so far as it prescribes the different modes of making an application to the Tribunal, the words require by application made to the Appellate Tribunal may be construed to include sending an application to the Registrar ors other authorised officer by registered post; in doing so, the applicant does all that he is required, in his power, to do in order to require the Tribunal to refer to the High Court any question of law arising out of its order, subject to the application being, in the ultimate, received by the Tribunal; that for the purpose of compliance with condition in the enactment, it is enough that the applicant puts the application into such a machinery for transmission and the time occupied in transmission of the application should not be not be computed as part of the period of limitation of sixty days. With great respect, I am unable to agree with the view expressed by their Lordship in the said decision. I do not see how one of the modes of making an application being its transmission by registered post as permitted by sub-rule (1) of rule 7, such an application sent by registered post can be deemed to have been made as soon as it so posted. In the teeth of express mandatory provisions of sub-rule (2) of rule 7, such construction as given by their Lordship appears to be rather strained. What apparently weighed with their Lordships in the said decision was the consideration that in the case of a memorandum of appeal under section 33(1) of the Act, if it is sent by registered post to an authorised officer at a time when it is sent by registered post to an authorised officer at a time when it is expected by the appellant that in the normal course of transmission, it ought to be received in his office within the period of limitation but due to delay in the transmission not due to any fault of the applicant, the memorandum of appeal is received at a later stage, in such cases the Tribunal has been given power by sub-section (2A) to excuse the delay and admit the appeal after the expiry of sixty days referred to in sub-sections (1) and (2) of section 33, whereas on the occurrence of such a contingency in the case of an application under section 66(1) the Tribunal is left without any corresponding power,-which position, their Lordships obviously thought, would cause or was likely to cause hardships to an applicant under section 66(1). Indeed, this appears to be a lacuna in the Act itself. In fact in an earlier decision of the Bombay High court hereinafter cited Chief Justice Chagla expressed his sincere hope that the Legislature will attend to the question as soon as possible because this discloses a very serious lacuna in the Act; and the Legislature could not have intended that no power should be given to the Tribunal or to the High Court in any case and in any circumstances to condone delay in making applications under section : 66(1). But this is more a matter for the Legislature than for us and we cannot do more than merely express a hope that the Legislature will suitable amend the Act, in the near future if they so desire or if public policy demands it.
It appears tome that in Sri Popsing Rice Mills case the interpretation of the word 'made' in section 66(1) has somewhat been considerably strained to the extent of having been misused in that, according to their Lordships, the only condition that sub-section (1) of section 66 lays down for requiring the Tribunal to state a case is to make an application; and that the application should be made in a particular manner., such as, presentation, is not a condition precedent to the exercise of the Tribunals jurisdiction or the appellants right to require a reference. Thus, it appears that their Lordships sought to make a distinction between 'making' and 'presentation' of an application. It is in this view of the construction, that their Lordships had that if the date of making an application or, in other words, the date of requiring the Appellate Tribunal by an application were meant to be coeval with the receipt of such application, it should have been so expressed in the sub-section in the manner of sub-section (2A) of section 33 of the like; and that sub-section (1) of section 66 contemplates the possibility of an interval of time between them. While dealing with this aspect of the matter, their Lordships assumed that the Legislature must have taken into consideration the unavoidable chances involved, in the usual mode of transmission of an application through post. With great respect, I could not persuade myself to agree to this approach, while interpreting an Act of the Legislature. The duty of the court is to administer justice according to law as it stands and not as it should be. Thus, the court cannot go beyond the clear language of the express provisions of the statute. It is only where there is some ambiguity which can admit of a reasonable explanation, that it is open to the court to give a benevolent construction if it is possible.
Then again, with regard to sub-rule (2) of rule 7, their Lordships Sri Popsing Rice Mils case took the view that in applying rule 7 mutatis mutandis to the case of application, the rule shall be read as it should be, without sub-rule (2) and their Lordships did not think it necessary, in its extended application, to define what presentation of an application is, as its presentation does not count nor is contemplated in section 66; and their Lordships further observed that the words 'receipts of an application 'mean 'actual receipt, be it on personal presentation to the officer concerned or postal delivery to him' and do not stand in need of any definition. With great respect, I do not agree with this view. I am of opinion, that this line of reasoning completely ignore the express mandatory provisions of the rules made in pursuance of section 5A(8) of the Act. I cannot see how sub-rule (2) of rule 7 can be altogether ignored having regard to rule 36, nor do I agree with the view that the change 'mutatis mutandis', - suggested in sub-rule (2) of rule 7, confined to reading 'application under sub-section (1) of section 66' in the place of 'memorandum of appeal' and the word 'receipt' for the word 'presentation', cannot be said to be 'a necessary change.'
Broadly speaking, interpretation has to be strictly in accordance with the terms of the statute. It is based on sound principles and public policy, particularly with regard to the revenue laws of the country, that there is necessity for such mandatory provisions as contained in the different sections of revenue law such as the Income-tax Act. To take any other view would render nugatory the provisions which fix certain limit as to time by or within which appropriate proceedings may be taken recourse to, for such relief, as the law permits.
The reasoning on analogy from the underline principles governing the communication of acceptance of a proposal in the Indian Contract Act is not, in my opinion, convincing. In the present case, we are to deal with statutory liability or duty of the applicant to make the application within the time limit fixed by the Act itself. Here, the agency principles in the contract will not be applicable for deciding the present case and thus viewed, the analogy is of no avail. This aspect is hereinafter more fully dealt with in the context of discussion of a Supreme Court judgment relied on by the assessee petitioner.
I am of opinion that sub-rule (2) of rule 7 is mandatory, imperative and is not merely directory. It appears tome that to give liberal construction to such mandatory provisions would lead to practical difficulties and thus make the Act unworkable. In this view of the matter, I do not think that the decision in Sri Popsing Rice Mills case is good law; and accordingly the said decision stands overruled.
The other High Courts in India also dissented from the decision in Sri Popsing Rice Mills case . One of the latest decisions is by Chief Justice Chagla of the Bombay High Court in Vishwanath Gopal Oil Mills v. S. C. Prashar where it is observed that the Orissa High Court ignored sub-rule (2) and constructed section 66(1) in the light of rule 7(1) and in that context it was further commented that it is difficult to understand how when the rule in terms provides that the application shall be deemed to be received when the postal communication has been received by the Tribunal, it could be said that the application is duly made when the application is put in the course of transmission. It is to be noted that the lone solitary view of the Orissa High Court has not been so far accepted by the other High Courts before whom this question came up for consideration. The Nagpur High Court in Motilal Harilal v. Commissioner of Income-tax the Punjab High Court in Khushi Ram Raghunath Sahai v. Commissioner of Income-tax the Hyderabad High in Commercial and Industrial Bank Ltd., v. Commissioner of Income-tax and the Madras High Court in Nagappa Chettiar v. Commissioner of Income-tax have all taken the contrary view and with respect, I Prefer the view taken by the other High Court in Sri Popsing Rice Mills case discussed above.
Mr. D. Bhuyan, learned counsel for the assessee petitioner, strongly relied on a decision of the Supreme Court in Commissioner of Income-tax v. Ogale Glass Works Ltd., in support of his contention that as soon as the application was posted, the post office became the agent of the addressee, namely., the Appellate Tribunal. In this connection the petitioner relied on certain passages in the last three paragraphs of the judgment where their Lordships, while comparing the principles underlying the English decisions as clearly consonant with the provisions of the Indian law, observed that there can be no doubt that as between the sender and the addressee, it is the request of the addressee that the cheque be sent by post that made the post office the agent of the addressee, after such request, the addressee cannot be heard to say that the post office was not his agent and, therefore, the loss of the cheque in transit must fall in the sender on the specious plea that the sender having the very limited right to reclaim the cheque under the Post Office Act, 1898, the post was his agent, when in fact there was no such reclamation; of course, if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself; apart from this principle of agency, there is another principle which makes delivery of the cheque to the post office at the request of the addressee a delivery to him and that is that by posting the cheque in pursuance of the request of the creditor, the debtor performs his obligation in the manner prescribed and sanctioned by the creditor and thereby discharges the contract by such performance. It appears that, in the particular case, the surrounding circumstances, the parties must have intended that the cheques should be sent by post which is the usual and normal agency for transmission of such articles and according to the Tribunals findings they were in fact received by the assessee by post; the apart from the implication of an agreement arising from such business usage, the assessee expressly requested the Government to 'remit' the amount of the bills by cheques; this on the authorities cited in the said Supreme Court Judgment, clearly amounted in effect to an express request to by the assessee to send the cheques by post and the Government did act accordingly to such request and posted the cheques in Delhi. It is in this background that the Supreme Court had decided that the Cheques posted in Delhi amounted to delivery of the cheques to the addressee.
The circumstance, however, in the case before us are different in that here it is the statutory liability under section 66(1) of the Income-tax Act read with the relevant rules thereunder, that has to be determined. In such case, as I have already observed, the agency principles will not apply. That apart, the basis on which the Supreme Court decided the above mentioned case was the request which was, made by the addressee to send the cheques by post and thereby made the post office the addressees agent for the purpose. In the present case, this circumstance is absolutely absent in that there is no occasion for any request by the Appellate Tribunal to the applicant under section 66(I) of the Act to send the application by post. All that rule 7(1) provides that it is open to the applicant to send the application by registered post and sub-rule (2) of rule 7 then provides that in such case of sending by registered post it shall be deemed to be presented when it is actually received by the Tribunal. Thus, viewed the Supreme Court decision relied on by the assessee petitioner does not support his contentions.
Our view with regard to the mandatory of character of section 66(1) of the Income-tax Act read with the rules made thereunder, is further supported by the history of the legislation on this subject as appears from the Parliamentary Bills and official records connected therewith. This historical aspect has certain special bearing, showing the intention of the legislature with regard to this branch of the revenue law of the country. It appears, as fore said, that as early as 1948 Chief Justice Chagla in the last paragraph of his judgment in Bansilal Gulabchand v. Commissioner of Income-tax : 16ITR251(Bom) while dealing with a similar point as the present case before us, expressed the sincere hope that the legislature will attend to the question as soon as possible because this disclosed a very serious lacuna in the Act. Then again in 1950 Chief Justice Malik of the Allahabad High Court in Hajee Mahoob Bux Ehhan Illahi v. Commissioner of Income-tax : 18ITR72(All) while agreeing with the said observations of the learned Chief Justice of the Bombay High Court, reiterated that it is for the Legislature to amend the Act if it considers that section 5 of the Limitations Act should be made applicable to applications under section 66(1). Thereafter, a Bill was introduced in Parliament on June 6, 1951, being Bill No. 56 of 1951 in which in clause 65 thereof substitution of a new section for section 66 of the Income-tax Act, 1922, was recommended, the proposed proviso to the new section being as follows :
'Provided that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period of sixty days here in before specified, allow it to be presented within a further period not exceeding fifteen days.' (The Gazette of India dated June 16, 1951, Part II, section 2, pages 470, 486.)
It clearly appears that this proposed proviso is corresponding to section 33(2A) allowing condonation of delay in the case of appeals. The proposed proviso to section 66 of the Act as quoted above sought to fill in the lacuna in the Act as quoted above sought to fill in the lacuna in the Act as pointed out by Chief Justice Chagla and Chief Justice Malik as aforesaid. Subsequently, however, as it appears from Bill No. 38 of 1952 as introduced in the House of the People on May 26, 1952, the said recommendation providing for a proviso to section 66 of the Act was dropped. The earlier Bill of 1951 which was introduced in June, 1951, had by then lapsed. It appears that certain provisions of the said Bill containing substitution of section 66 with the said proposed proviso for condonation of delay had required detailed examinations in the light of the comments received from various quarters and in the meanwhile it had become necessary to introduce as Shorter Bill in 1952 containing the amendments described in the subsequent Bill of being Bill No. 38 of 1952 but significant enough without the said amendment adding the proposed proviso as recommended in the previous year in Bill No. 56 of 1951 as aforesaid. (The Gazette of India dated May 31, 1952, Part II, section 2, page 202). Thus, the move taken to amended section 66 by adding a proviso for condonation of delay as aforesaid whereby the Appellate Tribunal was given the power to condone the delay in the presentation of an application up to a limit of fifteen days (recommendation No. 158 in a modified form as is evident from notes on clauses of the said Bill No. 56 of 1951 in the Gazette of India dated June 16, 1951, Part II, section 2, page 486) appears to have been ultimately dropped. If the said recommendation had been accepted, it would have been a dispensing provision. The said recommendation No. 158 does not appear to have been pressed further, with the consequence that the Indian Income-tax (Amendment) Act, 1953 which was passed in the following year did not contain the said proposed amendment as was recommended in the Bill No. 56 of 1951. This clearly shows the intention of the Legislature. It could not be that the observations of Chief Justice Chagla, in 1948, and chief Justice Malik in 1950 in the decisions cited above, were not considered or overlooked by the Legislature. Indeed, presumably on the observations of the different High Court showing the lacuna in the Income-tax Act, the Bill No. 56 of 1951 was introduced by way of giving relief to the applicant under section 66(I). But the fact of the said Bill not being pursued or its being dropped, is significant applicant. This removes all doubts in our mind as to the intention of the Legislature in this regard.
The result therefore is that both these applications -S.J.C. Nos. 4 and 5 of 1956 - having been made out of time, are dismissed with costs. Hearing fee Rs. 100.
NARASIMHAM C.J. - I agree with my learned brother that the decision of a Bench of this court in Sri Popsing Rice Mills v. Commissioner of Income-tax must be overruled. That decision had not been followed by any other High Court. On the contrary, as pointed out by my learned brother other High Courts have dissented from the view taken therein. In view of the clear provision of sub-rule (2) of rule 7 of the Appellate Tribunal Rules, there is no scope for giving any beneficial construction, especially on the question of limitation, or to hold that the date on which the petition is sent by post to the Appellate Tribunal should be deemed to be the date on which the application under section 66(1) Of the Income-tax Act was made before the Tribunal.
MISRA, J. - I agree.