1. The facts in this case are shortly as follows :
The petitioner is a company incorporated in the United Kingdom and is managed and controlled from there. For income-tax purposes, it is a nonresident. Its income includes inter alia dividends from companies
(a) resident in India
(b) resident outside India, but having income accruing or arising in British India.
In making its returns for the years 1940-41 to 1943-44 inclusive, the petitioner proceeded on the footing that category (b) was to be excluded. In view of the decision of this High Court in the case of Raleigh Investment Co. Ltd. v. Governor-General in Council, : 11ITR393(Cal) (A), this was allowed. The petitioner thereafter submitted claims under Section 49 of the Indian Income-tax Act for relief against double taxation, and relief was obtained.
The decision in the case of Raleigh Investment Co. Ltd. (A) (supra) was upset by the Federal Court and the Income-tax Authorities issued notices under Section 34, on the ground that the income in category (b) had escaped assessment. The petitioner thereafter made an application for income-tax relief on the basis of double taxation in respect of the additional dividend included in the re-assessment yearswhich were effected under Section 34 proceedings'. The Income-tax Officer refused to grant relief by his order dated July 27, 1954.
The petitioner filed appeals under the provisions of Rules 6 and 7 of the Rules framed in exercise of powers conferred by Section 49-A of the Indian Income-tax Act. These rules were made under Notification No. 50 dated 25th September, 1948. The relevant rules are Rules 5, 6 and 7 which are set out below :
'5. No claim to any refund of Indian Income-tax or super-tax under those rules shall be allowed unless it is made within four years from the last day of the financial year commencing next after theexpiry of the previous year in which the income arose, accrued or was received or was deemed to have arisen, accrued or been received or was brought into the provinces of India;
6. An applicant for refund under these rules may appeal to the Appellate Assistant Commissioner of Income-tax from any order of the Income-tax Officer disallowing the claim for refund wholly or in part.
7. The appeal shall be presented within 30 days of the date on which the order of the Income-tax Officer was communicated to the applicant and shall be in form B appended to these Rules.'
2. I may mention here that the Income-taxOfficer disallowed the claim because according to him it was barred by limitation under Rule 5. By an appellate order dated June 29, 1955, the Appellate Assistant Commissioner held that the appeal should be allowed. The Income-tax Officer appealed to the Income-tax Appellate Tribunal. Before the Income-tax Appellate Tribunal, the petitioner inter alia contended that no appeal lay because an appeal is a matter of statute and the only appeal that was allowed was under Rule 6 and no other appeal lay.
By its order dated March 13, 1956 the appellate Tribunal overruled the preliminary objection and held that an appeal lay under Section 33 of the Indian Income-tax Act, but on the merits it allowed the petitioner's claim, holding that it had not been barred by limitation and relief should have been granted. Naturally, in view of the fact that the decision was in the petitioner's favour on the merits, the petitioner did not take any further steps in the matter.
By four applications dated June 1, 1956, the Commissioner of Income-tax, Central Calcutta, required the Tribunal to state a case and refer certain questions of law to the High Court. These applications did not require the question as to jurisdiction to be referred, it was on June 22, 1956 that a draft statement of the case was sent to the petitioner. The petitioner thereafter gave a reply and in that reply it stated that the question as to want of jurisdiction of the Appellate Tribunal should also be referred.
The reference is under Section 66 (1) of the Indian Income-tax Act, and according to rules made there under, an application asking for a reference has to be made in a particular form prescribed, with a deposit of Rs. 100/-. The petitioner admittedly did not apply in such form and did not make the necessary deposit. In fact, by the time the reply was filed, the time within which an application for reference could be made had already expired.
The Tribunal, some time in July 6, 1956 drew up a case for reference to the High Court, and it does not contain any reference with regard to the point of jurisdiction, on the ground that the petitioner never applied formally for any reference upon this point. The application has now been made before me, and it is urged that the order of the Appellate Tribunal should be set aside and/or quashed because it had no jurisdiction.
3. The first point taken by Mr. Meyer on behalf of the respondents is a preliminary point, namely, that the petitioner had an alternative legal remedy of making an application for a reference under Section 66 (1) of the Indian Income-tax Act and as it has never filed an application to draw up a statement of case for reference, the application here is barred. The second point is also by way of a demurrer, and is upon the question of delay. It is argued that the order of the Tribunal was made on 13th of March, 1956 and the present Rule was issued on 12th September, 1956. The delay was for about 6 months and this ought to disentitle the petitioner from being granted any relief.
4. With regard to the first point, no exception can be had to the statement of the principle to be applied, namely, that if a person has an alternative legal remedy which is sufficient, then he must exhaust it before coming to this Court. Here, however, the facts are rather curious. It is true that on the point of jurisdiction the petitioner had failed, but then the order went in his favour. No one in his senses would think of disturbing an order which is in his favour.
The first occasion when the petitioner realised that the order was going to be challenged was some time in June 22, 1956. On the pleadings it is not at all clear when the order of the Appellate Tribunal had originally been conveyed to the petitioner, and therefore it is quite probable that the petitioner found that the remedy was already barred. In any event, it had little time to consider its position.
In these circumstances, I think, the petitioner can invoke the other principle, namely, that where a person can show initial lack of jurisdiction in any judicial or quasi-judicial Tribunal, this Court should deal with such matter and grant relief. In other words, no such Tribunal without jurisdiction can be allowed to function. In my view, my jurisdiction is not ousted, and that on the facts and circumstances of this case I should consider the matter on the merits.
5. Next about the question of delay. The delay can only 'be counted from June, 1956, before which the petitioner could not know that the order of the Appellate Tribunal was going to be disturbed, and therefore the alleged delay is only of three months, which is in my opinion, not such as to disentitle the petitioner from getting relief,
6. Lastly, we come to the merits. The question is whether the Appellate Tribunal had jurisdiction to deal with the appeal. Mr. Mitter has arguedthus : He says that an appeal is a creature of statute and so far as appeal under Section 49-A is concerned, it is not one of the sections mentioned in Section 30 of the Indian Income-tax Act, and therefore, it is not governed either by Section 31 or Section 33.
He argues that the appeal is provided for specially by a rule, namely, Rule 6 of the rules trained under Section 49A. That provides only one appeal namely, to the Appellate Assistant Commissioner. Consequently there can be no other appeal. In my view this is not the correct position. Section 30 deals with certain matters, and it is admitted that Section 49-A does not figure therein, but Section 48 does. Coming to Section 31, it purports to be a provision for the hearing of appeals. In the section, the words 'the appeal' are used, but it does not expressly refer to appeals against orders mentioned in Section 30. Section 49-A is as much a part of the Indian Income-tax Act, as Section 30. Section 49-A read with the rules, provides for an appeal to the Appellate Assistant Commissioner, in the same way as an appeal has been provided for, to the Appellate Assistant Commissioner in matters which come under Section 30.
In my opinion, Section 31 speaks in a general way as to how appeals should be heard before the Appellate Assistant Commissioner, and is not confined to appeals in respect of matters mentioned in Section 30 only. Consequently, an appeal under Rule 6, which has been framed in exercise of powers under Section 49-A of the Act, would be governed by Section 31, and such appeals must be heard in the manner laid down in Section 31. It will be observed that the rules by themselves do not lay down how appeals before the Appellate Assistant Commissioner should be heard, and this is understandable because it must be assumed that such appeals should be heard in the usual manner as prescribed in Section 31. If that be so, Section 33 applies to such appeals and there would He an appeal to the Appellate Tribunal. In my view such an appeal lay in this case.
7. Mr. Meyer has drawn my attention to a Bombay decision, in the case of Wallace Brothers & Co. Ltd. v. Commissioner of Income-tax, : AIR1955Bom72 (B). The facts in that case were very similar, and the question was the same, namely, whether an appeal lay to the Appellate Tribunal. This of course depended on the question as to whether Section 33 came into operation. Chagla C. J., looked at it from another viewpoint. He pointed out that the refund was actually asked for under Section 48, the section which deals with refund. In my opinion, the same principle applies here. Although relief is asked for against double taxation, what the petitioner really prays For is refund of an amount which it had paid and which it was not liable to pay because there was no provision for payment under the Act. If it comes under Section 48, then of course it would come within the amplitude of Sections 31 and 33 and it is conceded that in that event the appeal was in order. Whether the matter does come under Section 48 or not, for reasons above mentioned, I hold that an appeal lay to the Appellate Tribunal, and it had jurisdiction to deal with the appeal.
8. Mr. Meyer has also drawn my attention to a Supreme Court decision in the case of National Sewing Thread Co. Ltd. v. James Chadwick and Bros. Ltd., : 4SCR1028 (C). It was held therethat when an appeal is dealt with by a Court, it must be determined according to rules of practice and procedure of that Court. That must be so, and when the matter came in appeal before the Appellate Commissioner of Income-tax under Rule 6 of the rules, he would have to deal with it in the manner laid down in Section 31, which is the only section which lays down the procedure to be followed. Under the circumstances, an appeal did lie to the Appellate Tribunal under Section 33.
9. That being so, the matter fails upon this point, and the application must be dismissed. The Rule is discharged, interim order, if any, is vacated., There will be no Order as to costs.