1984 (4) TMI 24 - HC - Income Tax

Summary

Issues Involved:
1. Whether the Appellate Tribunal was right in holding that the Appellate Assistant Commissioner (AAC) was correct in condoning the delay in filing the appeal.
2. Whether the Appellate Tribunal was justified in holding that the levy under the Excess Profits Tax Act cannot be upheld.

Summary:

Issue 1: Condonation of Delay in Filing the Appeal
The court examined whether the AAC was justified in condoning the delay of nearly 21 years in filing the appeal under the Excess Profits Tax Act. The Revenue argued that the time-limit for filing an appeal u/s 17 of the Excess Profits Tax Act had long expired and that such a delay cannot legally be condoned. However, the court noted that the AAC has the discretion to condone delays if sufficient cause is shown. The court referenced the decision in Bhansali v. State of Madras, which held that bona fide prosecution of other remedies can be considered sufficient cause for delay. The court concluded that since the assessee had been pursuing other remedies, the AAC was right in condoning the delay. Therefore, question No. 1 was answered in the affirmative and against the Revenue.

Issue 2: Levy under the Excess Profits Tax Act
The court addressed whether the Tribunal was justified in holding that the levy under the Excess Profits Tax Act cannot be upheld due to the exemption granted u/s 25(3) of the Indian I.T. Act, 1922. The Tribunal had concluded that since the assessee was exempt from income-tax, there could be no levy under the Excess Profits Tax Act. The court disagreed, stating that the I.T. Act and the Excess Profits Tax Act are independent statutes, and the operation of one does not depend on the other. The court emphasized that the chargeability to income-tax under the I.T. Act is sufficient to attract the provisions of the Excess Profits Tax Act, regardless of whether actual tax liability exists. The court held that the relief granted u/s 25(3) of the I.T. Act does not automatically exempt the assessee from the Excess Profits Tax Act. Consequently, question No. 2 was answered in the negative and in favor of the Revenue. The Revenue was awarded costs from the assessee, with counsel's fee set at Rs. 500.