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Hind Development Corporation Vs. Income-tax Officer and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberC.R. No. 1307(w) of 1973
Judge
Reported in[1979]118ITR873(Cal)
ActsIncome Tax Act, 1961 - Sections 250(7), 253(3), 253(4) and 253(5)
AppellantHind Development Corporation
Respondentincome-tax Officer and ors.
Appellant AdvocateK. Ray and ;R.N. Dutt, Advs.
Respondent AdvocateB.L. Pal, ;N.L. Pal and ;S.N. Dutt, Advs.
Excerpt:
- .....limitation, and that, in any event, the tribunal was within its jurisdiction when it condoned the delay in filing the appeal. it is also the contention of the opposite parties that the commissioner did not issue any executive instruction authorising the ito to receive a copy of the order of the aac as contemplated by section 250(7) of the i.t. act. the opposite parties have challenged the finding of the tribunal that the commissioner constituted the ito his agent to receive the copy of the order of the aac.7. the first question which we would like to consider is whether the appeal was filed beyond the period of limitation. prima facie the appeal was filed within time, that is, within 60 days from the date of the communication of the copy of the order of the aac to the cit, the question,.....
Judgment:

M.M. Dutt, J.

1. This rule is at the instance of the assessee and it is directed against the order dated March 26, 1973, of the Income-tax Appellate Tribunal, 'A' Bench, Calcutta.

2. The questions which are involved in this rule, are whether the appeal preferred by the CIT against the order of the AAC was barred by limitation and, if so, whether the Tribunal was justified in condoning the delay in preferring the appeal. It may be stated here that by that appeal the Commissioner challenged the order of the AAC allowing the exemption of a salami receipt of Rs. 74,868 under Section 10(3) of the I.T. Act, 1961.

3. The order of the AAC was passed on March 1, 1972. Under Section 253(3) of the IT. Act, 1961, every appeal under Sub-section (1) or Sub-section (2) shall be filed within 60 days of the date on which the order sought to be appealed against is communicated to the assessee or to the Commissioner, as the case may be. Section 250(7) provides that on the disposal of the appeal, the AAC shall communicate the order passed by him to the assessee and to the Commissioner. The AAC communicated a copy of his order to the CIT in compliance with Section 250(7) on May 12, 1972. The appeal was filed on July 4, 1972. The appeal was, therefore, within the period of 60 days as provided by Section 253(3) of the Act.

4. At the hearing of the appeal it was, however, pointed out on behalf of the assessee that although the order of the AAC was forwarded to the CIT on May 12, 1972, the verification in the form in which the appeal was filed, was made by the ITO on April 24, 1972. In explaining the said discrepancy it was stated before the Tribunal on behalf of the department that the date of the said verification was put in through mistake. Further, it was stated that with a view to expedite the filing of appeals and to regulate his work, the Commissioner issued certain executive instruction to the ITO to obtain a copy of the order from the AAC and to keep the appeal ready for filing, so that, if after the receipt of communication of the order from the AAC, the CIT would direct the ITO to file the appeal, the same might be filed without unnecessary delay. It was further submitted on behalf of the department that in view of the said executive instruction, the ITO concerned received the copy of the order of the AAC on April 7, 1972, and he prepared a draft appeal for filing.

5. In view of the said statements made on behalf of the department, it was contended on behalf of the assessee that as the ITO obtained the copy of the order of the AAC under a direction from the CIT, the ITO was constituted by the Commissioner his agent and when the AAC delivered a copy of his order through the ITO, there was compliance with the provision of Section 250(7) and, accordingly, for the purpose of filing the appeal, time would run from the date of the receipt of the copy of the order, that is, from April 7, 1972. If the period of limitation was computed from April 7, 1972, the appeal was filed beyond time. The Tribunal accepted the contention made on behalf of the assessee and came to the finding that the ITO received a copy of the order from the AAC as the agent of the CIT and, as such, the time for filing the appeal should be computed from April 7, 1972, and so computed it was filed beyond the period of limitation. The Tribunal, however, found that the order was directly communicated later on to CIT, and that accordingly, there was some misunderstanding caused by the executive instruction issued by the Commissioner. The Tribunal took the view that there was sufficient cause for not presenting the appeal within the time allowed by the provision of Section 253(3) and, in that view of the matter, the Tribunal condoned the delay and admitted the appeal.

6. In this rule, the assessee has challenged the propriety of the order of the Tribunal in condoning the delay. It is contended on behalf of the petitioner that before the Tribunal, the department submitted that the appeal was filed within the period of limitation, and as there was no prayer for the condonation of delay on any ground, the Tribunal exceeded its jurisdiction in condoning the delay out of its own on a finding that there was sufficient cause, although no such cause was shown by the department. On the other hand, it is contended on behalf of the opposite parties that the appeal was not barred by limitation, and that, in any event, the Tribunal was within its jurisdiction when it condoned the delay in filing the appeal. It is also the contention of the opposite parties that the Commissioner did not issue any executive instruction authorising the ITO to receive a copy of the order of the AAC as contemplated by Section 250(7) of the I.T. Act. The opposite parties have challenged the finding of the Tribunal that the Commissioner constituted the ITO his agent to receive the copy of the order of the AAC.

7. The first question which we would like to consider is whether the appeal was filed beyond the period of limitation. Prima facie the appeal was filed within time, that is, within 60 days from the date of the communication of the copy of the order of the AAC to the CIT, The question, however, is whether the Commissioner by the executive instruction appointed the ITO his agent for the purpose of receiving the copy of the order of the AAC. No copy of the executive instruction was produced before the Tribunal, but it was stated on behalf of the CIT that with a view ta expedite the filing of appeals and to regulate his work, he issued certain executive instructions to the ITO to obtain the copy of the order from the AAC and to keep the appeal ready for filing, so that the same could be filed without unnecessary delay, if after the communication of the order from the AAC, the Commissioner would direct the ITO to file the appeal. The instruction of the Commissioner as noted down by the Tribunal in its order does not show that the CIT authorised the ITO to receive a copy of the order of the AAC under Section 250(7) of the I.T. Act, nor is there anything to show that the Commissioner appointed the ITO his agent. There is also no material to show that the AAC delivered a copy of his order to the ITO treating the latter as the agent of the CIT. On the other hand, the fact that in spite of the delivery of the copy of his order to the ITO the AAC forwarded a copy uf his order to the CIT in compliance with Section 250(7) of the Act, clearly indicates that the AAC did not deliver a copy to the ITO as the agent of the Commissioner. It is not the case of either party that the ITO disclosed to the AAC about the said executive instruction. By the said executive instruction, the Commissioner merely directed the ITO to procure a copy of the order from the AAC so that the filing of the appeal might be expedited. Beyond that there is nothing in the said executive instruction which would suggest that the ITO was constituted the agent of the Commissioner. Further, that executive instruction shows that the Commissioner did not give up his right to receive a copy of the order of the AAC in accordance with Section 250(7) of the Act. In these circumstances, we are of the view that the Tribunal was not justified in coming to the conclusion that the CIT appointed the ITO his agent for the purpose of receiving a copy of the order of the AAC, nor did the AAC treat the ITO as the agent of the Commissioner, for he had also sent a copy of his order to the CIT directly as provided by Section 250(7) of the Act. The finding of the Tribunal that the Commissioner appointed the ITO his agent is based on mere assumption without any material to support the same. While we are on this point one other fact may be considered. It is the verification by the ITO of the memorandum of appeal on April 24, 1972. The memorandum of appeal could not have been verified on that date, because so long as the Commissioner did not permit the filing of the appeal, the memorandum of appeal could not be verified. The Commissioner was communicated with a copy of the order on May 12, 1972, and so the verification should have been made on any date after May 12, 1972. It is, however, an irregularity and is not fatal to the appeal. The Tribunal also has taken the same view. The ITO may be permitted to amend the date of the verification.

8. In view of our finding that the appeal was filed within the period of limitation, the question as to the condonation of delay does not arise. Even assuming that the appeal was time barred, we may consider-whether the Tribunal was justified in condoning the delay when there was no prayer for such condonation. The relevant provision in that regard is contained in Section 253(5) of the I.T. Act, 1961, which provides that the Appellate Tribunal may admit the appeal or permit the filing of a memorandum of cross 'Objections after the expiry of the relevant period referred to in Sub-section (3) or Sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. Sub-section (5), therefore, confers a jurisdiction on the Appellate Tribunal to condone the delay in filing the appeal beyond the period of limitation, provided it is satisfied that there was sufficient cause for the same. The question is whether the Tribunal can, out of its own, condone the delay on a finding that there Is sufficient cause for not presenting the appeal within the period of limitation. Normally it is the duty of the appellant to make out a sufficient cause for condonation of delay. But so far as the provision of Sub-section (5) is concerned, it authorises the Tribunal to condone the delay if there is sufficient cause. The only condition that is to be fulfilled is that the Tribunal must be satisfied about the existence of sufficient cause for not presenting the appeal within the period of limitation. In our view, therefore, if the materials on record show that there was sufficient cause for the delay in filing the memorandum of appeal and if the Tribunal is satisfied about the same, the Tribunal can condone the delay. In the instant case, the Tribunal has pointed out that the delay in filing the appeal was due to some misunderstanding as the AAC served a copy of his order on the Commissioner on May 12, 1972, even though the AAC supplied a copy of his order to the ITO. The Tribunal had undoubtedly jurisdiction to condone the delay and it is not for this court to consider how the Tribunal was satisfied in the matter, viz., whether it was at the instance of the appellant or the Tribunal was satisfied out of its own from the materials on record. Even assuming that the exercise of the jurisdiction by the Tribunal was not in accordance with the provision of Sub-section (5) of Section 253, we are not inclined to exercise our discretion in the matter in favour of the petitioner by setting aside the order of the Tribunal on that ground. But as we have already held that the appeal was filed within the period of limitation, the question of condonation of delay does not arise. We therefore, uphold the order of the Tribunal in admitting the appeal. The Rule is discharged, but there will be no order for costs.

D.C. Chakravorti, J.

9. I agree.


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