TMI Blog2017 (3) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... ot prefixed or qualified by the word 'concerned'. There is no warrant for the Court to read into the provision such a qualifying word. The Court rejects the contention of the Revenue that limitation for the purposes of Section 260A (2) (a) begins to run only when a certified copy of the order of the ITAT is received by the 'concerned' CIT within whose jurisdiction the case of the Assessee falls notwithstanding that it may have been received by any other CIT, including the CIT (Judicial) prior thereto. As far as the obligation of the ITAT under Section 254 (3) of the Act is concerned, the said obligation is satisfied once the ITAT sends a copy of an order passed by it to the Assessee as well as to the Pr CIT or the CIT or even the CIT (Judicial). The ITAT has to be simply go by the details as provided to it in the memo of parties. If there is a change concerning the jurisdiction of the CIT and it is some other CIT who has jurisdiction, it will not have the effect of postponing the commencement of the period of limitation in terms of Section 260A (2) (a) of the Act. The statute is not concerned with the internal arrangements that the Department may make by changing the jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and will not override the statute, in particular, Section 260A (2) (a) of the Act. - ITA 52/2015, CM APPL 23522/2015, ITA 755/2015 & ITA 756/2015 - - - Dated:- 24-3-2017 - S. RAVINDRA BHAT, S. MURALIDHAR, VIBHU BAKHRU JJ. Appearance: Mr. Dileep Shivpuri, Senior Standing counsel with Mr. Sanjay Kumar, Junior Standing counsel for Revenue in ITA 52 of 2015 Ms. Vibhooti Malhotra, Lakshmi Gurung, Junior Standing counsel for Revenue in ITA 755 and 756 of 2015 Mr. Abhishek Maratha, Advocate for Respondent in ITA 52 of 2015 Mr. C.S. Aggarwal, Senior Advocate with Mr. Prakash Kumar and Mr. Rupinder Kumar Aggarwal, Advocates for Respondents in ITA 755 and 756 of 2015. JUDGEMENT Dr. S. Muralidhar, J.: Introduction 1. The central question that arises for consideration before this Bench is whether the words the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner in Section 260A (2) (a) of the Income Tax Act, 1961 ('Act') mean only the 'jurisdictional' Principal or Chief Commissioner of Income-tax (CIT) or could it include any CIT including the CIT (Judicial)? 2. The question assumes significan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeals. Background facts in ITA 52 of 2015 5. This appeal by the Revenue through the CIT-7 is against an order dated 16th May 2014 of the ITAT. At the hearing of the appeal on 1st September 2015, counsel for the Assessee raised a preliminary objection as regards limitation. It was pointed out by him that the photocopy of the certified copy of the impugned order of the ITAT bore a date stamp which showed that a copy had been received in the office of the CIT (Judicial) on 23rd July 2014. There were two other date stamps on the first page. One dated 25th July 2014 was in Hindi and was of the CIT, Central, New Delhi. The other was the stamp of the Office of CIT, Delhi-V with the date of 19th September, 2014. In para 6 of the memorandum of appeal, it was stated that the impugned order of the ITAT was served on the CIT-7 on 29th September, 2014 although there was no such date stamp anywhere on the first page of the photocopy of the impugned order. The counsel for the Assessee therefore contended that if a copy of the impugned order was available with the CIT (Judicial) on 23rd July 2014 or with the CIT (Central) on 25th July, 2014, then the present appeal which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... X XX after putting the seal as at APPENDIX XX (a) on each page of the order issues. Where the appeal before the CIT (Appeals) has been restored and/or remanded to him, a copy of such order passed in such appeal is also to be sent to the CIT (Appeals) concerned. (d) Copy of the order meant for the Assessing Officer other than those cases remanded to him, is issued through the Commissioner of Income tax concerned. Copies to the assessee and the Commissioner of Income tax are issued either under registered A.D. post or by hand delivery through Peon Book. If sent by post, it is sent to the address given in the Memo of Appeal. If no letter of authority was filed by one or more of those who appeared for the assessee, a copy meant for him will not be issued to him until he files the necessary letter of authority. The A.D. Cards received from the assessee or the Commissioner of Income-tax are filed or pasted on the back of the order kept on the relevant file and date of service of the order should be noted in the Order Sheet. 9. Appendix XX to the Manual gives the proforma of the endorsement made on the order of the ITAT when forwarding it to the various parties including the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either the CIT (Judicial) or any one of the CITs concerned? 13. In the above background, by the order dated 19th October 2015 in ITA Nos. 755 and 756 of 2015 , the following questions were referred to the larger Bench for decision: (i) What is the correct interpretation to be placed on the expression received by the Assessee or the Principal Chief Commissioner or the Chief Commissioner or Principal Commissioner in Section 260A (2) (a) of the Act? Does it mean 'received' by any of the named officers including the CIT (Judicial)? (ii) Does limitation begin to run for the purposes of Section 260A (2) (a) only when a certified copy of the order of the ITAT is received by the 'concerned' CIT within whose jurisdiction the case of the Assessee falls notwithstanding that it may have been received by any other CIT, including the CIT (Judicial) prior thereto? Is it open to the Court to read the word 'concerned' into Section 260 A (2) (a) of the Act as a prefix to any of the officers of the Department named therein? (iii) In the context of Section 254 (3) of the Act, is there an obligation on the ITAT to send a certified copy of its order to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter XX of the Act. The Memorandum to the amending Bill explained what may have been the legislative intent behind the insertion of Section 260A of the Act. In it, a reference was made to the decision of the Kerala High Court in CIT v. Wandoor Jupiter Chits (P) Ltd. (1995) 213 ITR 73 (Ker.), which held that the limited scope of Section 256 (2) of the Act which provided for reference by the ITAT to the High Court did not allow for rendering of final decision on the issue even where the relevant facts are available to such a decision . The second reason was that the provision contributes to the delay in passing of the consequential orders by the AO after the reference is decided by either the High Court or the Supreme Court, as the case may be. 16. At this stage, there was no particular focus on the expiry of the limitation period for filing appeal. Significantly, Section 260A as soon it was introduced only contemplated the order in appeal being communicated to the appellant . Prior to the amendment with effect from 1st June 1998, Section 260A read as under: 260 A. Appeal to High Court .- (1) An appeal shall lie to the High Court from every order passed in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in Section 260A (2) (a) was substituted by the words received by the assessee or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 19. There are certain general observations required to be made at this stage. The first is that the grant of time of 120 days to file an appeal against the order passed by the ITAT is contrary to many other statutes which provide for a shorter period of limitation. The only plausible explanation is that the legislature acknowledged the inherent delays in the system and, particularly, the working of the administrative machinery of the State. The power of the High Court to condone delay beyond that period would have to be interpreted in this context. Strict construction 20. Sub-section (2A) was inserted by the Finance Act 2010, giving powers to the High Court to condone the delay in filing the appeal. There was a difference of opinion of the High Courts on whether the High Court has the power to condone the delay in filing the appeal, although Section 260A (7) (inserted by the Finance Act, 1999) stated that the provisions of the Code of Civil Procedure, 1908 ( CPC ), which related to appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed an order then under Section 254(3), it was to send a copy of any orders passed under this section to the assessee and to the Chief Commissioner or Principal Commissioner or Commissioner . The Court emphasised that Section 254 on a plain reading (or by necessary implication) nowhere indicated that ITAT could decline to pronounce the orders which are obviously to be dated and signed on a given date to make such orders effective and binding . 22.5 The Court in CIT v. Sudhir Choudhrie (supra) proceeded to hold: Known precepts of procedural law would necessarily impose an obligation upon any forum or Tribunal, judicially determining the rights of the parties to declare its order on the date it is signed and declared . It further observed: The requirement of letting the parties to know the contents of the order upon its declaration (when its dated and signed by the Bench of the Tribunal) would be the minimum requirement to the principles of natural justice. This requirement transcends all technical rules of procedure . The rational explanation was that the pronouncement of an order would certainly put the parties at notice and they would be able to take recourse t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench may advance the date of pronouncement and put this information on the notice board and the order shall be pronounced accordingly. (8) In a case where the order cannot be pronounced on the date given, the date of pronouncement may be deferred, subject to sub-rule (5)(c) above, to a further date and information thereof shall be given on the notice board. 24. Usually, when an order is pronounced by the ITAT, the fact of such matter being listed for pronouncement is made known to the parties and their counsel. Rule 34 if read as a whole makes it mandatory for ITAT to pronounce orders at a hearing/sitting and obliges it to be made available to the parties. The DR is expected to remain present when such orders are pronounced. As noticed earlier, one copy of the order is sent as a practice by the ITAT to the CIT (Judicial), apart from sending it to the CIT whose details are made available by the Department to the ITAT at the time of filing the appeal or to such changed office as may be made known to the ITAT by the Department. Earlier decisions 25. There has been no decision as such interpreting the words received by the assessee or the Principal Chief Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in CIT v. Arvind Construction Co. (P) Ltd. (supra). It was reiterated: It is the Commissioner concerned who alone has the jurisdiction to file application and it is imperative that it is he who should be served with a copy of order either under Section 254 or 256 (1) . 28. The above decisions under Section 256 (3) are clearly distinguishable. The limitation for the purpose of Section 256 begins to run the moment the order is communicated to the parties. Another distinction to be drawn is that the word used in Section 256 of the Act served whereas under Section 260A it is received . The word received has to be seen in the context of the decision in CIT v. Sudhir Choudhrie (supra), which made it mandatory for pronouncement of the orders of the ITAT. At the time of such pronouncement, apart from the AR of the Assessee, the DR is expected to remain present. Through him the Department becomes immediately aware of the said judgment of the ITAT. The 'concerned' CIT 29. The main thrust of the submissions of learned counsel for the Revenue is that it is only the 'concerned' CIT or Principal Commissioner of Income Tax (Pr CIT) who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of an appeal. Reference is made to the decisions in Consolidated Coffee v. Coffee Board 1980 (3) SCR 625 and Shree Ishar Alloys Steels Ltd. v. Jayaswal Neco AIR 2001 SC 1161. 33. Reference is also made to the decision in Adi Pherorzshah Gandhi v. H.M. Seervai AIR 1971 SC 385, where the scope and ambit of the words person aggrieved under Section 37 of the Advocates Act, 1961 was considered. It is pointed out that any person feeling disappointed with the result of the case would not be a person aggrieved . He must be disappointed of a benefit which he would have received if the order had gone the other way . 34. The Revenue also relies on the decision in Infosys Technologies Ltd. v. Jupiter Infosys Ltd. (2011) 1 SCC 125 , where the Supreme Court discussed the scope of the word aggrieved occurring in the Trade and Merchandise Marks Act, 1958. An application under Sections 46 or 56 of that statute had to be by a person aggrieved . Such a person, it was held, must be one whose interest is affected in some possible way . It is accordingly submitted in the present case by the Revenue that it is only the jurisdictional Commissioner who can be said to be &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved party and not any other officer of the Department. The CIT or the Pr CIT is a representative of the Department which is the party aggrieved. 38. In other words, there can be no doubt that in all cases where the decision of the ITAT has gone against the Revenue, it is the Revenue as a whole which is the 'aggrieved party'. An individual CIT or Pr CIT can prefer the appeal on behalf of the Revenue as an aggrieved party. If the legislative intent was to confer the power to file an appeal only by the 'concerned' CIT or Pr CIT or Chief CIT, then words to that effect ought to have been used. The use of the prefix 'the' preceding the words CIT or Pr CIT in Section 260 A (2) (a) serves only the grammatical correctness of a preposition and nothing more. It is not to be read as meaning that particular CIT or the concerned CIT . 39. The interpretation of the prefix the has to be both purposive and contextual. The object of the provision is to enable the filing of appeals within a period of limitation. As it is, the period of limitation (120 days) is considerably longer than in routine cases (30, 60 or a maximum of 90 days). The interpretation has to serve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. That internal issue of the Department cannot possibly extend the time for filing of the appeal beyond 120 days as provided under Section 260A (2) (a) of the Act 42. The problem can also be viewed from the angle of the frequent transfers and posting of the income tax officers including CIT/Pr CIT on account of the allocation/re-allocation of duties and other administrative exigencies. It is possible that the CIT who was the concerned CIT at the time of dispatch by the ITAT of the copy of the order ceases to be such when he receives the copy. That will not give rise to a fresh period of limitation or postpone the commencement of limitation till such time the substitute 'concerned' Pr CIT/CIT receives a copy of the said order. Given the fact that, legislatively, a larger period of limitation has been granted for filing appeals, there is no warrant for any flexibility in the interpretation thereby giving a discretion to officers of the Department to extend the period of limitation beyond what is envisaged by the statute. In these very cases, the impugned order was received by a particular CIT (Judicial) and then sent to the concerned CIT, who was shifted out by the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ambiguous and clear, there is no scope for the Court to 'read into' the statute words that do not exist. In the present case, if the Revenue's argument were to be accepted, the Court would be adding a prefix 'concerned' to the words CIT or Pr CIT or Chief CIT in Section 260 A (2) (a) of the Act. In the considered view of the Court, that is not permissible for the Court to do so in the circumstances explained hereinbefore. 47. Administrative instructions issued by the Department might insist that the CIT (Judicial) cannot by himself take a decision on filing an appeal. That, however, cannot extend the statutory period of limitation for filing the appeal. It is up to the Department to devise the protocol to ensure that (i) the decision to file the appeal and (ii) the steps to prepare and file such appeal are completed within the stipulated statutory period of 120 days from the date when the order was first received either by the DR or by the CIT (Judicial) or any other CIT. As long as the order to be appealed against is served on an officer of the Revenue, be it a DR or a CIT (Judicial), limitation will begin to run from that date. 48. It is possible that im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (Judicial) prior thereto? Is it open to the Court to read the word 'concerned' into Section 260 A (2) (a) of the Act as a prefix to any of the officers of the Department named therein? Ans: In Section 260A (2) of the Act, the words CIT, Pr CIT or Chief CIT are not prefixed or qualified by the word 'concerned'. There is no warrant for the Court to read into the provision such a qualifying word. The Court rejects the contention of the Revenue that limitation for the purposes of Section 260A (2) (a) begins to run only when a certified copy of the order of the ITAT is received by the 'concerned' CIT within whose jurisdiction the case of the Assessee falls notwithstanding that it may have been received by any other CIT, including the CIT (Judicial) prior thereto. Q: (iii) In the context of Section 254 (3) of the Act, is there an obligation on the ITAT to send a certified copy of its order to a CIT other than the one whose details are given to it during the pendency of the appeal? Will change in the jurisdiction concerning the case of the Respondent Assessee to another CIT subsequent to the order of the ITAT have the effect of postponing the time, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under the extant ITAT Rules, a copy of the order is sent to the CIT (Judicial). In the context of Section 260A(2)(a) of the Act, once an order is listed for pronouncement in the ITAT, the DR or the CIT (Judicial) should be taken to be aware of the order. From that point, it is a purely an internal administrative arrangement as to how the DR or CIT (Judicial) obtains and further communicates the order to the officer who has to take a decision on filing the appeal. It is possible that immediately after pronouncement, the AR or the DR or both may apply for a certified copy of the order of the ITAT. In that case, the time taken for the certified copy to be readied for collection by the applicant will be excluded while computing limitation. But here again, if earlier to such date, a copy is received by a party from the ITAT, then such earlier date will be the starting point for limitation. Q: (vi) Whether the receipt of a certified copy of the order of the ITAT by the CIT (Judicial) is sufficient to trigger the commencement of the limitation period under Section 260 A (2) (a) of the Act? Ans: The receipt of a certified copy of the order of the ITAT by CIT (Judicial) woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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