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Cipla Limited Versus The Assistant Commissioner of Income Tax & Anr.

2016 (11) TMI 1049 - BOMBAY HIGH COURT

Maintainability of Cross Objection - Held that:- While there is nothing on record to assist us an ascertaining extent of delay, there is also no application that has been preferred before us as contemplated in Rule 904. As far as Rule 907 is concerned on proper reading of the said Rule it becomes evident that if the pending appeal which has been admitted or which is pending admission, what is intended is that if the pending appeal does not come up for hearing on merits and if the Respondent has .....

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case it is the Court that has granted additional time to remove office objections failing which the appeal would stand rejected and it was accordingly rejected. Rule 907 does not give any right to the Appellant, over and above what is provided under Order 41 Rule 22 Sub-Rule (4). - All that it does is to enable the cross objector to seek hearing of the Cross Objection as if the same were Cross Appeal, during pendency of the appeal and nothing more. In the circumstances having considered the .....

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the respondents. JUDGMENT (PER A.K. MENON, J.) 1. The short point that arises in the present Cross Objection pertains to its maintainability in view of the fact that the Income Tax Appeal bearing Lodging No.1589 of 2010 was rejected vide order dated 9th November, 2010 for non-removal of office objections. The learned counsel for the applicants/petitioners in the Cross Objection submits that the Cross Objection maintainable notwithstanding the rejection of the .....

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n respect of the assessment year 1999-2000 and 2000-2001 was passed on 17th February, 2010. The present Cross Objection pertains to A.Y. 2000-2001; (ii) Being aggrieved by the order of the Tribunal, the Revenue filed its appeal before this Court on 30th June, 2010 being Income Tax Appeal (Lodging) No.1589 of 2010. (iii) The Department's appeal came to be served on the applicant-assessee on 10th August, 2010. (iv) The appeal appeared on board on 23rd August, 2 .....

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) No.24 of 2010. On 29th September, 2010 by consent it was once again adjourned to 4th October, 2010. On 4th October, 2010 it appears that the Court noticed that objections in the Appeal as well as the Cross Objection were still not removed. As a result, the Appeal and Cross Objection came to be adjourned, by consent, by four weeks only for removal of office objections failing which the matters were to stand dismissed without further reference to the Court. 5. It transpires that the o .....

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39; Order on 9th November, 2010. The Cross Objection has since remained pending. The Cross Objection came up for hearing and on 5th July, 2016 at the request of learned counsel for the applicant it came to adjourned to 12th July, 2016 and thereafter for a few dates by consent of parties. On 26th July, 2016 the matter was heard for some time when we questioned the maintainability of the Cross Objection on an objection was raised by the Revenue. 7. Mr. Kotangle, the learned counsel appe .....

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arty. At this, Mr. Joshi, the learned counsel for the assessee submitted that the Cross Objection, in the present set of facts, is clearly maintainable since the assessee had notice of the hearing of the appeal on 23rd August, 2010 when the matter was adjourned by consent of parties and accordingly the Cross Objection came to be lodged on 9th September, 2010. 8. In this respect, perusal of the record indicates that the Cross Objection is dated 9th September, 2010 the same was lodged o .....

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the Supreme Court in Mahadev Govind Gharge and others v/s. Special Land Acquisition Officer, Upper Krishna Project, Kamkhandi, Karnataka (2011) 6 SCC 321 . The observations of the Supreme Court in the said order and specially in paragraph 60 reads as follows:- Having analytically examined the provisions of Order 41 Rule 22, we may now state the principles for its application as follows: (a) The respondent in an appeal is entitled to receive a notice of hearing of the appeal .....

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d finally on a date fixed subsequently or otherwise, in presence of the said respondent/caveator, it shall be deemed to be service of notice within the meaning of Order 41 Rule 22. In other words the limitation of one month shall start from that date. 9. Thereafter, we granted the time to the parties to consider the effect of rejection of appeals for want of removal of office objections and pendency of the Cross Objections and the resultant disability that the Cross Objector may face .....

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he ground of non-service of summons and held that the defendant's knowledge about pendency of a suit does not amount to knowledge of the date of hearing. In the present case. Mr. Joshi contended that the applicant had knowledge of the date of hearing and therefore the Cross Objection was maintainable. 10. Mr. Joshi then referred to the decision of Patna High Court in the matter of Mowar Sheobaksh Singh v/s. Mowar Thakur Dayal Singh A.I.R. 1919 Patna 219(1) where in a First Appeal .....

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ges despite which the Cross Objection was heard and determined. Mr. Joshi then invited our attention to the judgment of Madras High Court in the case of P. K. Bhimasena Rao v/s. C.Venugopal Mudali & two others 48 ILR 631 and submitted that in that case although the Appellant had to furnish security of costs and defaulted in doing so, resulting in the dismissal of the appeal for default, the Cross Objection was allowed to be proceeded with. Mr. Joshi laid emphasis on the judgment of Srinivasa .....

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ding the fact that the appeal itself had been rejected. 11. On behalf of the Revenue Mr. Kotangle submitted that under provisions of Order 41 Rule 22 the Cross Objection could be dealt with and disposed of provided the appeal was pending. In the present case he submitted, the appeal had been disposed of by a self-operative order passed on 4th October, 2010 and therefore, there is no question of the cross objection being heard. In addition to this, Mr. Kotangle sought to differentiate .....

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nt of the appellants failure to pay the paper book charges and as as a result, the Cross Objection continued to remain on the file and was directed to be heard. In the case of P. K. Bhimasena Rao (supra) also the appeal was part of the record of the Court that the appellants defaulted in furnishing the security for costs and as a result the appeal came to be dismissed for default and the Cross Objection was allowed to proceed. According to Mr. Kotangle these cases cited as precedents are of no a .....

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ber, 2001 and the same was fixed for early hearing on 25th January, 2002, Cross Objections were filed on 19th November, 2002. The appeal came to be dismissed on 22th October, 2003. Relying on the observations of the said judgment, Mr. Joshi pointed out that under Rule 22(1) of Order 41 limitation for filing an appeal commences from date of service of notice of the date fixed for hearing of the appeal. According to Mr. Joshi the expression date fixed for hearing does not mean the date fixed for & .....

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der. In the meantime, the Cross Objection came to be filed on 9th September. According to Mr. Joshi the period of one month is to commence from the date of service of the notice of hearing which was initially served on 10th August, 2010 when the department served a copy of the appeal on the assessee putting them to notice that the matter would be taken up on 23rd August, 2010. On this basis, Mr. Joshi submitted that the Cross Objection was indeed in time. 14. Having heard the counsel .....

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take any cross-objection] to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow. [Explanation. - A respondent aggrieved by a finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file cro .....

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of appeal, shall apply thereto. [***] (4) Where, in any case in which any respondent has under this rule filed a memorandum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless be heard and determined after such notice to the other parties as the Court thinks fit. (5) The provisions relating to pauper appeals shall, so far as they can be made applicable, apply to an objection under this rule.

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of the Cross Objection, Sub-rule (3) was limited with effect from 1st July, 2002, sub-rule (4) provides that even if the original appeal is withdrawn or dismissed for default the Cross Objection may nevertheless be heard. This sub-rule is of some significance in deciding the issue of maintainability before us. We may also make reference to the Bombay High Court (Original Side) Rules which under Chapter LII provides for filing of appeals of Cross Objections. In this behalf, Rule 907 a .....

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cross-objections under Order XLI, Rule 26 of C.P. Code. - Cross-objections under Order XLI, rule 26 of the Code of Civil Procedure shall be filed within thirty days from the date on which the findings are recorded or within such further time as the Appellate Court may allow. 17. Rule 907 provides that if for any reason the appeal fails to come to a hearing on merits, any Cross Objection filed may be treated as a cross appeal and the application of the respondent by whom the same was .....

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to the instant case, one has to consider whether the applicant would get benefit of Rule 907 from the facts narrated herein above. 18. It is evident that the appeal in question was never registered on the file of this Court. In our view, the submission of Mr. Joshi that notice of filing of the appeal and service of notice of the hearing on 23rd August, 2010 should be construed as notice of hearing of the appeal as contemplated in Rule 22 cannot be accepted. Under Rule 4 the original a .....

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tions is a necessary process and part of the justice administration system and reflecting on parties conduct of the case. Non-removal of objections despite repeated adjournments as in the instant case or even generally, within the time specified signifies inability or a conscious decision on the part of a litigant to not pursue the case. Once a case is rejected for non compliance with objections and more particularly after time was extended by the Court to remove objections within the time speci .....

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all can be distinguished on facts inasmuch as in all those cases the appeal was filed and registered in the record of the Court and all were scheduled for hearing on merits. The appellants committed default in complying to the orders of the Court for furnishing the security for costs and paying paper book charges. These were not the cases where the appeals were not registered for non-compliance of preliminary office objections but these were appeals scheduled to proceed on merits. In this behalf .....

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the parties would have argued the appeal on merits and the same would be taken up for hearing on merits. The provisions of Order 41 Rule 22 enables a party to file a Cross Objection only when an appeal is filed and when the Court hears the appeal on merits. In Rajasthan High Court in Ramkripal v/s. Radheshyam and Others AIR 1970 Rajasthan 234, a Division Bench of the Rajasthan High Court had occasion to consider the contention that the Cross Objection could be canvassed independent of the appea .....

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may not arise. However, filing of the Cross Objection before time in that sense does not entitle the applicant to a hearing of the Cross Objection on merits in the absence of the appeal being admitted. 21. In the instant case, there is nothing to show that the Court had assumed jurisdiction and the merits of the matter has been considered. The contention of Mr. Joshi that the matter was shown as a covered matter is of no consequence because it appears that the said appeal w .....

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ned on 6 occasions for this very same reason i.e. by consent the same was stood over for presumably for removal of office objections. It is only on one occasion on 13th September, 2010 that the Court took cognizance of the pendency of the Cross Objections and directed that the appeal be heard along with the Cross Objections and on that date even the Cross Objections were not heard and continued to be so till the subsequent order was passed on 4th October, 2010 granting the applicant time of four .....

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peal came to be rejected. The record indicates that the Cross Objections nevertheless continued to remain on file since the office objections therein were removed as directed by the Court on 4th October, 2010. In the circumstances, there will be no occasion for the Revenue to be heard on merits in the appeal. We are of the opinion that the applicant had notice of date fixed for hearing of the appeal . Even assuming Mr. Joshi is correct in his submission, the hearing of the appeal indi .....

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fixed for hearing necessarily meant the date fixed for hearing of the appeal on merits. 24. Mr. Joshi has placed reliance on paragraphs 36, 38, 40, 41, 44, 45 and 48 of the judgment in Mahadev Gharge (supra) to submit that the date of hearing can be classified in two different stages one at the stage of admission and the other at the final stage and normally the date of hearing should be understood to mean the date on which the Court applies its mind to the merits of the case. The Su .....

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d period as the Court may grant) and secondly to put the party or his pleader at notice that the appeal has been admitted and fixed for hearing and the Court will pronounce the rights and contentions of the parties on the merits of the appeal. It is on such notice being served, the period of limitation starts running. The Court further observed that if both these purposes are achieved prior to the service of a fresh notice then, it would be futile to issue a separate notice which would result in .....

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ions of the parties on the merits. This stage, in our view, had not been reached in the instant case because the appeal came to be rejected for non-removal of office objections as aforesaid. There has evidently been no hearing on the merits of the case at all and no prejudice was caused to the revenue since it consciously stopped pursuing the appeal. On all dates and as referred to above in the various orders only time has been extended and repeatedly, for removal of office objections and for no .....

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t if an appeal fails to come for hearing on merits any Cross Objection filed under Order 41 Rule 22 may be treated as a Cross appeal but on the application of the respondents. In the present case, Mr. Joshi has contended that in the even we hold against the Applicant on maintainability, the present Cross Objection may be treated as an appeal and the delay in filing the appeal be condoned. While there is nothing on record to assist us an ascertaining extent of delay, there is also no application .....

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27. The Rules do not enable the Respondent - Cross Objector to make such application if the Appeal is already rejected for non removal of office objections. Under High Court Rule 986, an appeal can be rejected by the Prothonotary and Senior Master if the Appellant does not remove office objections within 30 days of lodging an Appeal. In the present case it is the Court that has granted additional time to remove office objections failing which the appeal would stand rejected and it was according .....

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