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TMI Blog1956 (2) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... tember, 1947, a notice of demand was served on it for Rs. 51,313-14-0 on account of income-tax and super-tax. The appellant preferred an appeal against this assessment, and it was actually received in the office of the Appellate Assistant Commissioner on 5th November, 1947, and it was then 7 days out of time. It was registered as No. 89, and notice for hearing under section 31 was issued for 24th June, 1948. Eventually, it was heard along with Appeal No. 86 on 1st October, 1948. At the hearing, the Department took the objection that the appeals were presented out of time, and were therefore liable to be dismissed. The appellant prayed for condonation of the delay on the ground that following on the partition of the country the conditions were very unsettled and that curfew order had been promulgated and was in force, that the post office did not accept registered letters and that the traffic on the Grand Trunk Road was closed, and that in view of these exceptional circumstances, it had sufficient cause for not presenting the appeals in time. On 31st December, 1948, the Appellate Assistant Commissioner passed orders in both the appeals, holding that there was not sufficient ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are specified in section 30(1). When the appeal is against an order of assessment under section 23---and this is what we are concerned with in this appeal---it is provided in section 31(3), clauses (a) and (b), that in disposing of the appeal the Appellate Assistant Commissioner may (a) confirm, reduce, enhance or annul the assessment, or (b) set aside the assessment and direct the Income-tax Officer to make a fresh assessment after making such further enquiry as the Income-tax Officer thinks fit. Section 33(1) enacts that, " any assessee objecting to an order passed by an Appellate Assistant Commissioner under section 28 or section 31 may appeal to the Appellate Tribunal within sixty days of the date on which such order is communicated to him." Stated succinctly, section 30 confers a right of appeal on the assessee, section 31 provides for the hearing and disposal of the appeal, and section 33 confers a right of further appeal against orders passed under section 31. Now, on these provisions the question is whether an order dismissing an appeal presented under section 30 as out of time is one under section 30(2) or under section 31 of the Act. If it is the former, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted from in a recent decision of the Punjab High Court in General Agencies (India) Ltd. v. Commissioner of Income-tax. In Commissioner of Income-tax v. Shahzadi Begum, the Madras High Court has held that an order declining to excuse delay and rejecting the appeal is one under section 31, whether it is made before the appeal is admitted or after, and that an appeal which is filed out of time is, none the less, an appeal for purposes of section 31, and that an order dismissing it would be appealable under section 33. In Gour Mohan Mullick v. Commissioner of Agricultural Income-tax, the Calcutta High Court has, after a full discussion, come to the conclusion that an order of dismissal on the ground of limitation at whatever stage was one which fell under section 31. It is unnecessary to refer to the views expressed in decisions of other High Courts, as the point now under discussion did not directly arise for decision therein. The question is, which of these views is the correct one to adopt. We start with this that under section 33 it is only orders under section 31 that are appealable. The question therefore narrows itself to this whether an order declining to condone delay and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal to the assessee against an order made by the Appellate Assistant Commissioner under section 30 of the Act." Learned counsel for the appellant disputes the correctness of the last observation that an order of the Appellate Assistant Commissioner refusing to condone the delay is one under section 30(2), and contends that the only order that could be passed under that section was one excusing delay, and an order refusing to condone it will fall outside it, and that such an order could only be made under section 31. We find it difficult to accede to this contention. When power is granted to an authority to be exercised at his discretion, it is necessarily implicit in the grant that he may exercise it in such manner as the circumstances might warrant. And if the Appellate Assistant Commissioner has a discretion to excuse the delay, he has also a discretion in appropriate cases to decline to do so. We are therefore of opinion that the refusal to excuse delay is an order under section 30(2). But the question still remains whether the view taken in Commissioner of Income-tax v. Mysore Iron and Steel Works and K. K. Porbunderwalla v. Commissioner of Income-tax that an appeal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kulkarni and Others v. The State of Bombay. In Promotho Nath Roy v. W. A. Lee, an order dismissing an application as barred by limitation after rejecting an application under section 5 of the Limitation Act to excuse the delay in presentation was held to be one "passed on appeal" within the meaning of section 109 of the Civil Procedure Code. On the principles laid down in these decisions, it must be held that an appeal presented out of time is an appeal, and an order dismissing it as time-barred is one passed in appeal. Then, the next question is whether it is an order passed under section 31 of the Act. That section is the only provision relating to the hearing and disposal of appeals, and if an order dismissing an appeal as barred by limitation is one passed in appeal, it must fall within section 31. And as section 33 confers a right of appeal against all orders passed under section 31, it must also be appealable. But then, it is contended that in an appeal against assessment the only order that could be passed under section 31(3)(a) is one which confirms, reduces, enhances or annuls the assessment, that such an order could be made only on a consideration of the merits of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income-tax, the Allahabad High Court stated that the view was "possible that even though the period of limitation is prescribed under section 30 and the power to grant extension is also given in that section the power is really exercised under section 31 as the Appellate Assistant Commissioner when he decides not to extend the period of limitation may be said in a sense to have confirmed the assessment." The respondent relied on a later decision of the Allahabad High Court in Mahabir Prasad Niranjanlal v. Commissioner of Income-tax, wherein it was held by the learned Judges, departing from the previous course of authorities of that Court, that an order of the Appellate Assistant Commissioner dismissing an appeal as time-barred was one under section 30(2) and not under section 31, and was therefore not appealable. This conclusion they felt themselves bound to adopt by reason of certain observations of this Court in Commissioner of Income-tax, Madras v. Mtt. Ay. S. Ar. Arunachalam Chettiar. But when read in the context of the point that actually arose for decision in that case, those observations lend no support to the conclusion reached by the learned judges. There, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to by the learned Judges as leading to the conclusion that an order dismissing an appeal as barred by time would fall under section 30(2). Now, those observations came to be made by way of answer to a new contention put forward by the learned Attorney-General in support of the appeal. That contention was that the miscellaneous application presented to the Tribunal might be treated as an appeal against the order dated 19th November, 1945, in which case the order passed thereon 20th February, 1946, would fall under section 33(4) and the reference would be competent. In disagreeing with this contention, this Court observed that the appeal to the Appellate Assistant Commissioner was incompetent under section 30(1), that even if it was competent, the order dated 19th November, 1945, was not one contemplated by section 31, and there could be no appeal against such an order under section 33(1). Now, it should be noticed that the question actually referred under section 66(1) was the correctness and legality of the order passed in a miscellaneous application and not of any order made in an appeal preferred under section 33(1). In this context, the point sought to be raised by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such merits, and that accordingly he could not hear or decide any issue of a preliminary nature such as limitation, and dispose of the appeal on the basis of the finding on that issue. He conceded that this contention would run counter to numerous authorities, but argued that they were all wrong. Having given due consideration to this contention, we are of opinion that it is not well-founded. Taking the plea of limitation---which is what we are concerned with in this appeal---when there is a judgment or order against which the statute provides a right of appeal but none is preferred within the time prescribed therefor, the respondent acquires a valuable right, of which he cannot be deprived by an order condoning delay and admitting the appeal behind his back. And when such an order is passed ex parte, he has a right to challenge its correctness at the hearing of the appeal. That is the position under the general law (vide Krishnasami Panikondar v. Ramasami Chettiar), and there is nothing in the provisions of the Income-tax Act, which enacts a different principle. Therefore, if an appeal is admitted without the fact of delay in presentation having been noticed, clearly it must be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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