2001 (3) TMI 243 - AT - Income Tax

Summary

Issues Involved:
1. Competency of the Revenue's appeals against the CIT(A)'s order under section 249(3) condoning the delay in filing appeals.
2. Interpretation of section 249(3) and its relation to section 250 for appeal purposes.
3. Applicability of the Supreme Court judgment in Mela Ram & Sons v. CIT.

Detailed Analysis:

1. Competency of the Revenue's Appeals:

The primary issue was whether the appeals filed by the Revenue against the CIT(A)'s order condoning the delay in filing appeals were competent. The Judicial Member initially held that appeals against an order under section 249(3) were not competent, as such orders were not appealable under section 253(2) of the Income-tax Act. The Accountant Member, however, disagreed, asserting that an order under section 249(3) should be considered an order under section 250 and thus appealable.

2. Interpretation of Section 249(3) and Section 250:

The Judicial Member opined that an order under section 249(3) could not be considered an order under section 250 in all circumstances. He emphasized that the right to appeal is expressly granted by statute and cannot be implied. The Judicial Member relied on the Supreme Court's judgment in Mela Ram & Sons, which stated that objections to the admission of an appeal after condoning the delay could only be raised at the hearing of the appeal itself.

Conversely, the Accountant Member argued that an order condoning delay under section 249(3) should be treated as an order under section 250, making it appealable. He cited the Supreme Court's liberal interpretation of section 31 (equivalent to section 250) to include orders disposing of appeals on preliminary issues like limitation. He contended that treating orders differently based on whether they condone delay or reject appeals as time-barred would be inconsistent and unfair.

3. Applicability of the Supreme Court Judgment in Mela Ram & Sons v. CIT:

The Judicial Member referenced the Supreme Court's judgment in Mela Ram & Sons, emphasizing the respondent's right to challenge the correctness of an ex-parte order condoning delay at the hearing of the appeal. He concluded that the Revenue could not object to the admission of the appeal before the hearing of the appeal.

The Accountant Member, however, interpreted the same judgment to support the view that the CIT(A)'s order condoning delay should be treated as an order under section 250, making it appealable. He highlighted that the Supreme Court's decision aimed to prevent the deprivation of valuable rights through a narrow interpretation of procedural provisions.

Third Member's Decision:

The Third Member agreed with the Accountant Member, concluding that the appeals filed by the Revenue were competent. He emphasized that the substance of the CIT(A)'s order, rather than its label, should determine its appealability. The Third Member referenced the Supreme Court's principle that procedural provisions should be liberally construed to prevent the deprivation of valuable rights. He held that the CIT(A)'s order condoning delay, even if purportedly under section 249(3), was in substance an order under section 250 and thus appealable.

Conclusion:

The appeals filed by the Revenue against the CIT(A)'s order under section 249(3) condoning the delay in filing appeals were deemed competent. The Tribunal directed that the appeals be posted for hearing on merits, aligning with the majority opinion that an order under section 249(3) should be treated as an order under section 250 for appeal purposes.