TMI Blog1956 (2) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... time by 19 days, but the appeal was registered as No. 86, and notice for hearing under section 31 of the Income-tax Act was issued for 13th December, 1947, and after undergoing several adjournments it was actually heard on 1st October, 1948. For the year 1946-1947, the Income-tax Officer assessed the income of the firm at Rs. 1,09,883 and on 29th September, 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 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner." Section 31(1) enacts that " the Appellate Assistant Commissioner shall fix a day and place for the hearing of the appeal, and may from time to time adjourn the hearing." Section 31(3) specifies the orders that may be passed in the appeals according as they are directed against orders passed under the one or the other of the sections of the Act which 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, sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring on the ground of limitation, it would not be under section 31, because the scheme of the Act contemplated that an order to be passed under that section must relate to the merits of the assessment. It is on this decision that the judgment under appeal is based. It may be mentioned that the decision in Dewan Chand v. Commissioner of Income-tax was dissented 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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. Section 33 then gives the right of appeal to the assessee from an order made by the Appellate Assistant Commissioner either under section 28 or under section 31. Therefore the Legislature did not give the right 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 ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Lordships have no doubt that any application by a party to an appellate Court, asking it to set aside or revise a decision of a subordinate Court, is an appeal within the ordinary acceptation of the term, and that it is no less an appeal because it is irregular or incompetent." These observations were referred to with approval and adopted by this Court in Raja 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax, Chagla, C.J., observed : "...although the Appellate Assistant Commissioner did not hear the appeal on merits and held that the appeal was barred by limitation his order was under section 31 and the effect of that order was to confirm the assessment which had been made by the Income-tax Officer." In Special Manager of Court of Wards v. Commissioner 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not possibly be regarded as one under section 33(4) and there being no order under section 33(4) there could be no reference under section 66(1) or (2), and the appellate Court properly refused to entertain it." There is, of course, nothing in the decision itself which bears on the point now under discussion. But certain observations occurring at pages 474 and 475 were referred 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e like. The learned Solicitor-General sought to get over these decisions by taking up the position that section 31(3)(a) construed in its literal and ordinary sense, conferred jurisdiction on the Appellate Assistant Commissioner only to pass orders on the merits of the assessment, that it was not therefore open to him to entertain any question which did not directly relate to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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