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Bijaya and Co. Vs. Income-tax Officer. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberI. T. APPEAL NO. 19 (CTK.) OF 1983 [ASSESSMENT YEAR 1980-81]
Reported in[1986]17ITD1021(Cal)
AppellantBijaya and Co.
Respondentincome-tax Officer.
Excerpt:
- .....not afforded to the assessee by the lower appellate authority which resulted in dismissal of the appeal as time barred. he further submitted before us that even if the order of the commissioner (appeals) refusing to condone the delay is not set aside, the appeal should be heard on merit by the tribunal. in support of this contention, reliance has been placed on the decision of the supreme court in mela ram & sons v. cst : [1956]29itr607(sc) , and the decisions of the orissa high court in cit v. ramakaran agarwalla [1962] 13 stc 407, cst v. aurobindo auto service [1963] 14 stc 46 and purshottamdas mathuradas & co. (p.) ltd. v. cst .5. the learned departmental representative has, on the other hand, fully supported the order of the lower appellate authority and submitted that since the.....
Judgment:
ORDER

Per Shri D. N. Sharma, Judicial Member - The assessee by the order of the Commissioner (Appeals) dismissing his appeal in limine as time-barred.

2. Against the assessment framed for the year 1980-81, the assessee preferred an appeal to the Commissioner (Appeals). The demand notice was served on the assessee on 14-1-1981 whereas the appeal was filed on 27-2-1981 which was barred by limitation by 14 days. The assessee did not move any application for condonation of delay in filing the appeal. The assessee was, however, required by the Commissioner (Appeals) vide his letter dated 13-10-1982 to show cause why the appeal be not rejected as bared by limitation. This letter was received by the assessee on 14-10-1982. On 18-10-1982 the date fixed for hearing, an application was moved on behalf of the assessee for adjournment on the ground that the senior counsels younger brother expired day before yesterday and so he was not in a position to conduct the case. On 19-11-1982 to which date the case was adjourned, on behalf of the assessee an adjournment was again sought on the ground that the managing partner of the firm was out of station and that he had kept all the documents in his custody so that it was not possible to produce anything before the lower appellate authority. The Commissioner (Appeals) refused to grant adjournment on 19-11-1982 and held that the assessee had no sufficient cause for the delay in filing the appeal. Accordingly, the appeal was dismissed as time barred.

3. Before us a petition has been moved on behalf of the assessee seeking permission to adduce additional evidence in the form of medical certificate dated 18-11-1982 to show that Shri Sarat Chandra Sahu was under medical treatment for entire fever from 10-2-1981 to 26-2-1981 and that for this reason the appeal before the Commissioner (Appeals) could not be filed within time. Before the lower authority, no application for condonation of delay in filing the appeal was moved at any stage. We are also not satisfied that the medical certificate now sought to be tendered in evidence before us could not be produced before the lower appellate authority for valid reason. We have, accordingly rejected the petition and have refused to accept the medical certificate as additional evidence.

4. The learned authorised representative for the assessee has submitted before us that the Commissioner (Appeals) was in error in refusing to grant the prayer for adjournment made on 19-11-1982 as a result of which an application for condonation of delay could not be moved before the Commissioner (Appeals). It was, thus, submitted that reasonable opportunity to move the petition for condonation of delay was not afforded to the assessee by the lower appellate authority which resulted in dismissal of the appeal as time barred. He further submitted before us that even if the order of the Commissioner (Appeals) refusing to condone the delay is not set aside, the appeal should be heard on merit by the Tribunal. In support of this contention, reliance has been placed on the decision of the Supreme Court in Mela Ram & sons v. CST : [1956]29ITR607(SC) , and the decisions of the Orissa High Court in CIT v. Ramakaran Agarwalla [1962] 13 STC 407, CST v. Aurobindo Auto Service [1963] 14 STC 46 and Purshottamdas Mathuradas & Co. (P.) Ltd. v. CST .

5. The learned departmental representative has, on the other hand, fully supported the order of the lower appellate authority and submitted that since the appeal was dismissed by the Commissioner (Appeals) as time barred, the Tribunal cannot go into the merit on the case.

6. We have considered the rival submissions as also the facts on record. We have also gone through the authorities cited on behalf of the assessee. As has been stated above, the appeal filed by the assessee, however did not apply for the condonation of delay in filing the appeal. It was only when the matter was brought to the notice of the assessee by issuing a notice dated 13-10-1982 which was served upon the assessee on the next day and the matter was fixed for hearing on 18-10-1982 that the assessee moved a petition for adjournment and the case was adjourned for 19-11-1982 on the ground that the younger brother of the assessees counsel had expired. When the matter came up before the Commissioner (Appeals) again on 19-11-1982 there was again an application for adjournment on the ground that the managing partner of the aforesaid firm was out of State and he had kept all the documents in his custody and so it was not possible to produce anything before the Commissioner (Appeals). This time the prayer for adjournment was refused by the Commissioner (Appeals). Even though the assessee was required to show cause as to why the appeal be not dismissed being time barred and the hearing was adjourned for 19-11-1982, yet the managing partner of the firm went out of the State. The adjournment petition moved on 19-11-1982 did not disclose as to why the managing partner chose to remain out of the State on 19-11-1982. We are, therefore, satisfied that there was no sufficient ground for seeking adjournement on 19-11-1982 and the Commissioner (Appeals) was perfectly justified in refusing adjournment. The assessee did not move any application for condonation of delay even though it received a show-cause notice. Under these circumstance, we are of the opinion that the Commissioner (Appeals) was fully justified in holding that there was no sufficient cause for the delay in filing the appeal before him. So, the appeal was rightly dismissed in limine as time barred.

7. The other contention raised on behalf of the assessee that we should hear the appeal on merit may now be considered. The Supreme Court decision in Mela Ram & sons case (supra) does not help the assessee. It was held in this case that an appeal presented out of time is an appeal and that an appeal presented out of time is an appeal and that an order dismissing it as time barred is one passed in appeal.

8. In the case of Ramakaran Agarwalla (supra) also the point involved was different. In that case the appeal filed by the assessee was summarily rejected by the AAC. The assessee then came in second appeal before the Sales Tax Tribunal. One of the contentions raised there was that mere summarily rejection of appeal for non-compliance with the statutory rule was not disposal of appeal under sub-section (2) of section 23 of the Orissa Sales Tax Act and that no second appeal against that order lay. The Tribunal rejected this contention and held that rejection of the first appeal would amount to disposal of the appeal within the meaning of the section 23(2). The Orissa High Court upheld the order of the Tribunal on the point. So, in this case also the question involved was different and, hence, the reliance on this authority in the case before us, is misplaced.

9. In the case of Aurobindo auto Service (supra) the appeal filed before the AAC was dismissed summarily under section 49 of the Sales Tax Rules for failure to remove defects within a reasonable time. On second appeal, the Sales Tax Tribunal dealt with the case at great length both on facts and on law. One of the questions referred to the High Court related to the right of the Tribunal to enter into the merit of the assessment while sitting in judgment over the order of the first appellate authority. It was held by their Lordships of the Orissa High Court that once the second appeal lies before the Tribunal, that authority has full power to enter into the facts and law as authorised by clause (c) of sub-section (3) of section 23 of the Orissa Sales Tax Act. From the facts stated in this case it cannot be gathered whether the Sales Tax Tribunal set aside the order of the first appellate authority dismissing the appeal summarily for the assessees failure to remove defects within a reasonable time. In case, the order of the first appellate authority on the point was set aside, in that event it was certainly open to the Tribunal to go into the merit of the assessment. The decision of the Orissa High Court in the said case has been given in the context of the facts of that case.

10. In the case before us, we have already held that there was no sufficient cause for the delay in filing the appeal before the Commissioner (Appeals) and, therefore, the question of setting aside the order of the Commissioner (Appeals) does not arise. In this view of the matter, we are of the opinion that the material facts of the instant case being different, the ration laid down in the case of Aurobindo Auto Service (supra) cannot be applied to the facts of the present case.

11. Right of appeal given to an assessee is a statutory and valuable right. The assessee aggrieved by an order of assessment can challenge it by filling an appeal before the AAC/Commissioner (Appeals). But this right has to be exercised within the prescribed period of limitation. If the time prescribed for filing an appeal expires, then that statutory right is extinguished with the result that it is no longer open to the assessee to assail the assessment on merit. By effiux of time and on account of failure on the part of the assessee to prefer an appeal against the assessment within the prescribed period of limitation, a valuable right is vested in the department and that right and that right cannot be taken away simply because the assessee has a right to come up in appeal before the Tribunal against the order of the lower appellate authority dismissing the appeal in limine, as time barred. We are clearly of the view that the assessee in view of the facts of the case, can only assail the order of the Commissioner (Appeals) in second appeal; and it is not open to it to assail the assessment on merit because we have not set aside the order of the Commissioner (Appeals) on the preliminary ground. Once the said order stands confirmed the question of going into the merits of the assessment does not arise. By not filing the appeal within time, the assessee lost its right to challenge the assessment on merit either before the Commissioner (Appeals) or in second appeal before the Tribunal, even though the appeal filed before the Tribunal is competent and is within time.

12. Under section 253 of the Income-tax Act, 1961 (the Act) a statutory right has been given to an assessee to prefer an appeal to the Tribunal against an order passed by the AAC/Commissioner (Appeals). So the subject-matter of appeal before us is not the assessment order but the order of the lower appellate authority. We have to consider in this appeal whether the Commissioner (Appeals) was justified in dismissing the appeal as time barred. No other question arises for our consideration out of the order of the Commissioner (Appeals). so for this reason also, it is not open to us in second appeal to go into the merit of the assessment framed by the ITO.

13. For the aforesaid reasons, we refuse to go into the merit of the assessment framed by the ITO.

14. In the result, the appeal filed by the assessee fails and is hereby dismissed.


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