TMI Blog2005 (3) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge(s) : SWATANTER KUMAR., MADAN B. LOKUR JUDGMENT The judgment of the court was delivered by Swatanter Kumar J.- A simple but interesting question of law arises in the present writ petition as to the meaning of the expression "made" appearing in the proviso to section 80MM of the Income-tax Act. The petitioner is a private limited company having its registered office at Nilhat House, 11, R.N. Mukherjee Road, Calcutta, and is carrying on its business of providing technical services in connection with the plantation and manufacture of tea. For this purpose, it had entered into various agreements for acquiring technical know-how and consultancy with other persons as well. The fee is payable to the petitioner in lieu of those services and the normal tenure of the agreement is usually one year, the amount payable in quarterly instalments. During the accounting year corresponding to the assessment year 1978-79 an income of Rs. 5,42,365 accrued from the technical know-how provided by the petitioner to others. In this regard, 16 agreements had been entered into by the petitioner with 14 different companies, the details of which have duly been spelled out in the petition. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the application should be received in the office of the Board prior to the cut off date of 1st October of the relevant assessment year. According to the respondents, the expression "made" must be construed as submitted and preferably received by the office of the Board. The petition should be dismissed for want of proper conduct on the part of the petitioner inasmuch as he had admittedly sent his application by post on September 29, 1978, knowing fully well that 1st October was the last date for receipt of such application. It is not disputed that the application of the assessee was received by the office of the Board on October 4, 1978. On these premises, it is argued that the rejection order passed by the Board is correct in law and the assessee was not entitled to the benefit for the assessment year 1978-79. In order to examine the merits of these rival contentions, reference to the provisions of section 80MM can be appropriately made at this stage itself as it existed in the relevant assessment year: "80MM. Deduction in the case of an Indian company in respect of royalties, etc., received from any concern in India.- (1) Where the gross total income of an assessee, being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions stipulated in the provisions. Thus, an approach or interpretation which would be favourable to an assessee should be adopted where it is possible to take two views in relation to such interpretation. The proviso to section 80MM(1)(ii) requires that the application for such approval should be made to the Board before the 1st day of October of the relevant assessment year. The expression "made" should be given its normal meaning and there is hardly any scope for giving it a restricted meaning or substitute the same by the expression "received". If the intent of the Legislature was that the application would be entertained by the Board as valid and in time only if it was received before the 1st day of October of the relevant assessment year then it was expected to use the word "received" or at least "submitted" in place of the word "made". This only indicates that an act which is within the control of the assessee should be completed and he should not be able to exercise any control or tamper with the required documents after the cut-off date. Once the application is sent by the assessee by registered post through the post office he obviously loses control over the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, an application sent by post, received by the Board in time, but was lacking particulars or was not in conformity with the rules, it will be liable to be rejected and the assessee would have no chance to correct the same. The inevitable conclusion of the above discussion would be that on the posting of the application seeking benefit under the provisions of section 80MM to the Board, he would have to substantially complied with the requirements of the section i.e. "made to the Board". The concept of beyond the control of a party was also discussed by the Kerala High Court in the case of Commissioner of Agricultural Income-tax v. Kappumalai Estate [1998] 234 ITR 187 where the court while referring to section 35 of the Act stated that the expression "made" would mean authorising the order and issuing the same and as the orders were not dispatched within the prescribed period, the orders for the relevant assessment years were held to be barred by time. In the present case, the application of the petitioner was received by the Board, but on October 4, 1998. Thereafter the Board has admittedly granted benefit to the petitioner for all subsequent years which obviously means that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a good "practice". A good practice in law can be a ground for providing protection to the person who has acted as per the practice. Learned counsel appearing for the petitioner also relied upon the judgment of the Supreme Court in the case of Indore Malwa United Mills Ltd. v. CIT [1966] 59 ITR 738 to argue that the post office was acting as an agent of the Board in view of the practice and the petitioner having delivered the documents to the post office which in its normal course was liable to deliver the documents to the addressee, the post office would have even acted as an agent of the party for performance of the act. In view of what we have already held, it is not necessary for us to dwell upon the merits of this contention. It is rightly contended on behalf of the petitioner that their request for condonation of delay in view of the circumstances beyond the control and power of the petitioner has not been dealt with at all by the authorities concerned. Once the authorities are exercising the power vested in them under a statute which is capable of adversely affecting the rights of a party and could deny certain concessions which would be available to such party under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still at least 3 days in advance to the prescribed date, the applicant had dispatched the application by post thus losing control over the document as well as doing everything reasonable within the power and means of the applicant. The Board received this application on October 4, 1998, and it is not even the case of the Department before us that prior thereto the Board had already taken a decision on the application of the applicant. The use of the expression "expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order authorise the income-tax authority to deal with such application on the merits and in accordance with law beyond the period prescribed", shows that the intent of the provision is to vest the authority concerned with wide powers to decide every case on its own merits and circumstances. It is not necessary for us to deal with this contention in any greater detail particularly in view of the view expressed by a Full Bench of the Punjab and Haryana High Court in Jaswant Singh Bambha v. CBDT [2005] 272 ITR 1, where the Bench while dealing with condonation of delay in filing an application for refund under section 239 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied. Hard cases which can be properly categorised as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities'. The Supreme Court, ultimately held that the only restriction on the power of the Board under section 119 of the Act 'is to prevent it from interfering during the course of assessment of any particular assessee or the discretion of the Commissioner of Income-tax (Appeals)'. It is true that the aforementioned observations have been made in the context of clause (a) of section 119(2) of the Act but we are of the view that the same shall apply in full force even to clause (b) of the said provision. Clause (a) deals with the power to grant relaxation from the provisions of several sections enumerated therein... The matter can be looked at from another angle as well. Section 5 of the Limitation Act, 1963, permits the admission of an application beyond the period of limitation if the applicant satisfies the court that he had sufficient cause for not making the application within such period. This provision has general application. However, a departure to this general rule is made in section 29(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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