TMI Blog1951 (9) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... the heirs of the deceased were brought on record as respondents. For the accounting year 1943 a return of the income was made treating the estate as one single unit. The heirs, however, raised the contention that the assessment should be made upon them individually in proportion to the shares of the income which they obtained from the estate to which they succeeded. While that assessment was pending enquiry before the Income-tax Officer, for the subsequent year 1944 a return was again submitted by the assessees for separate assessment. The claim of the assessees for separate assessment was rejected by the Income-tax Officer for the two years. Against the order of the Income-tax Officer, appeals were preferred to the Appellate Assistant Commissioner and they were pending. For the accounting year 1945 again a similar claim was made by the heirs in their return submitted to the Income-tax Officer, and following the previous decision, the Income-tax Officer again negatived the claim. Against this order also there was an appeal to the Appellate Assistant Commissioner, which was filed on the 28th September, 1946. The appeal was however out of time by 64 days. In a covering letter which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection has no application to any orders passed by the Appellate Assistant Commissioner at a stage anterior to it. In support of this contention, learned counsel relied on certain decisions of the Bombay and Allahabad High Courts. On behalf of the assessees reliance was placed upon the view taken by the Patna High Court, which, it was claimed, was also supported by a decision of the Judicial Committee. Before an examination of the decisions cited on either side it would be convenient to refer to the provisions of the Act relating to appeals and to examine the scheme underlying these provisions. Under the Income-tax Act of 1922, before its amendment in 1939 and the introduction of the present Section 33, an appeal against the assessment order to the Assistant Commissioner was provided under Section 30 of the Act. The first sub-section to that section contained a proviso that no appeal shall lie in respect of an assessment made under sub-section (4) of Section 23, or under that sub-section read with Section 27. Sub-section (2) of Section 30 provided that the appeal shall ordinarily be presented within thirty days of receipt of the notice of demand relating to the assessment and pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal lies only if an order falls under Section 31 of the Act or under Section 28 and not otherwise. We are not in the present case concerned with Section 28. The appeal therefore to the Appellate Tribunal can be justified only if it is established that the order of the Appellate Assistant Commissioner rejecting the appeal is really one which was and could have been passed under Section 31 of the Act. The point for determination is whether the narrow construction put upon Section 31 by the Bombay and Allahabad High Courts should be preferred to the liberal construction placed upon that section by the Patna High Court. A form is prescribed by Section 30 and rules were made under the rule-making power for presenting an appeal. After an appeal is so presented, the appellate authority may have to consider certain questions of a preliminary nature, not touching the merits of the order appealed against. Such questions are, for example, whether the appeal was presented in time, and whether there was sufficient cause to condone the delay, whether an appeal conformed to the formalities prescribed by the rules or not, and whether an appeal was or was not barred by any of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at was for the reason that after the section conferring a right of appeal and empowering the appellate authority to excuse the delay if sufficient cause is made out and admit an appeal, there follows the section which defines the powers of the appellate Court and prescribes the procedure to be adopted in disposing of the appeal. Even in respect of the preliminary questions it cannot be doubted, and indeed it was not disputed, that the appellate Court is bound to hear the appellant after fixing a date for hearing. Which section confers such a power except it be Section 31? The legislature, in our opinion, thought that all such matters are covered by Section 31 which defines the procedure to be adopted and the power to be exercised by the appellate tribunal and therefore no other specific provision was made in the Act in that behalf. This view is to a large extent supported by the observations of the Judicial Committee in Income-tax Commissioner v. Khemchand Ramdas [1938] 65 I.A. 236; 6 I.T.R. 414. The view taken before the decision of the Privy Council in some of the High Courts was that under the proviso to Section 30, which is now omitted, an order by the Appellate Assistant Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich had the approval of the Judicial Committee was the foundation of the view taken by the Patna High Court in the earliest of the cases in Kunwarji Ananda v. Commissioner of Income-tax, Bihar and Orissa [1931] I.L.R. 11 Pat. 187. In the light of the decision of the Judicial Committee the earlier decision of the Allahabad High Court in Jot Ram Sher Singh v. Commissioner of Income-tax, United Provinces [1934] 2 I.T.R. 129, which was based upon the Full Bench decision of the Rangoon High Court in In re Abdul Bari Chowdhury v. Commissioner of Income-tax, Burma [1931] I.L.R. 9 Rang. 281, seems to us erroneous. The Rangoon Full Bench disagreed to a considerable extent from the view taken in Duni Chand v. Commissioner of Incometax [1929] I.L.R. 10 Lah. 596 at 601. To accept the limited and narrow construction for which the counsel for the Commissioner of Income-tax contends that the appeal in Section 31 must be understood as meaning only an appeal which was competent and was presented in time or which was admitted after the delay was condoned and which also complied with all the formalities, is to leave the appellate Court powerless to decide the preliminary points for there is no spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Commissioner only in cases where the delay was not condoned by the Appellate Assistant Commissioner and when he deals with the matter ex-parte. In such a case, it is said that the order would be outside the purview of Section 31. It is difficult to make a distinction in the manner suggested. It only shows and reinforces the argument that all the powers exercised and exercisable by the appellate authority are derived under Section 31 and that the language of Section 31 is wide enough to cover the two stages of the hearing of the appeal whether it related to questions of a preliminary nature or whether it related to the merits of the appeal. The decision of the Allahabad High Court in Jot Ram Sher Singh v. Commissioner of Income- tax, United Provinces [1934] 2 I.T.R. 129, already referred to, was followed by the same Court in Shivnath Prasad v. Commissioner of Income-tax, Central and United Provinces [1935] 3 I.T.R. 200, in which the question was whether an order rejecting an appeal by the Assistant Commissioner as time-barred was within the purview of Sections 31, 32 or 33 of the Income-tax Act as it stood before 1939, and the High Court could direct the Commissioner to state a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to be seriously considered in a case where there was sufficient cause for condonation of the delay and the exercise of the discretion by the Appellate Assistant Commissioner was considered to be perverse. In the case before us, however, both the Appellate Assistant Commissioner as well as the Appellate Tribunal considered the case on the merits and both were of the opinion that there were no sufficient grounds for the condonation of the delay...... In the circumstances of the case, there is no point in having the question further considered by a larger Bench. There are two decisions of the same Court in 1951. In Mohd. Naim Mohd. Alam v. Commissioner of Income-tax, U.P. [1951] 19 I.T.R. 58, the first of the cases, the Appellate Assistant Commissioner admitted an appeal but subsequently dismissed it on the ground that the appeal was timebarred. This order was passed after issue of notice to the assessee fixing a date and place of hearing of the appeal and the order was treated as one falling under Section 31 which was appealable. The reason given by the learned Judges was that after the admission of the appeal the only section that would apply at the time of the hearing was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are presented within the prescribed period or admitted after the delay has been condoned, and the procedure laid down in Section 31 with regard to the hearing of appeals only applies to such appeals. Therefore, in my opinion, when the Appellate Assistant Commissioner refused to condone the delay, there was no appeal before him which he could hear and dispose of as provided under Section 31 of the Act. This in substance is also the argument advanced on behalf of the Income-tax Commissioner by Mr. Rama Rao Saheb. Considerable light is thrown on the question which we are considering in this reference by the decision of the Full Bench in Kunwarji Ananda v. Commissioner of Income-tax, Bihar and Orissa [1931] I.L.R. 11 Pat. 187. It was a case which arose under the old proviso to Section 30 barring a right of appeal in respect of an assessment order under Section 23(4). The observations of the learned Judges are in consonance with the principles laid down by the Privy Council in Income-tax Commissioner v. Khemchand Ramdas [1938] 65 I.A. 236; 6 I.T.R. 414 already referred to. Courtney Terrell, C.J., observed at page 202:- It is undoubtedly the duty of the Assistant Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Calcutta High Court under Article 179 of the Limitation Act of 1877 which had to construe whether there has been an appeal as in Nagendranath Dey v. Suresh Chandra Dey [1932] 59 I.A. 283 the learned Judge adopts the reasoning in Wazir Mahton v. Lulit Singh [1883] I.L.R. 9 Cal. 100 and states:- That case, it is true, was decided with reference to a wholly different statute but the reasoning which was adopted there is, in my opinion, also applicable to this case and I think that where an appeal has been actually preferred to the appellate authority and where it has been disposed of by such authority, the order passed in such a proceeding may, without straining the actual words of the section, be regarded as an order under Section 31 or Section 32 as the case may be. The observations of Sir Shadi Lal in Duni Chand v. Commissioner of Income-tax [1929] I.L.R. 10 Lah. 596 which had the approval of the Privy Council were relied on. In a later case of the same Court in Maharani Gyan Manjari Kuari v. Commissioner of Income-tax [1944] 12 I.T.R. 59 an appeal was rejected by the Appellate Assistant Commissioner on the ground that it was not in the prescribed form. It was held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view which we have taken. The question which the learned Judge had to deal related to the construction of Section 33A(2) of the Income-tax Act. The Commissioner is authorised by that section to exercise the power of revision but subject to certain restrictions provided in the section itself. The Commissioner has no power under that proviso to revise the order:- (a) where an appeal against the order lies to the Appellate Assistant Commissioner or to the Appellate Tribunal but has not been made, the time within which such appeal may be made has not expired, or, in the case of an appeal to the Appellate Tribunal, the assessee has not waived his right of appeal, or (b) where an appeal against the order has been made to the Appellate Assistant Commissioner, the appeal is pending before the Appellate Assistant Commissioner, or (c) the order has been made the subject of an appeal to the Appellate Tribunal. In that case an appeal to the Appellate Tribunal under Section 33 against an order of the Appellate Assistant Commissioner was dismissed as time-barred. Thereafter the assessee applied to the Commissioner under Section 33A(2) to revise the order of the Appellate Assistant C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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