TMI Blog2001 (3) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... ecution of the appellant had been filed. The assessee did not deny the allegation made by the ITO but submitted that the delay in filing the appeals was because of the negligent conduct of his previous counsel Mr. D.P. Mahajan and his erroneous advice. Although Mr. D.P. Mahajan had got the appeal papers prepared and made over to the Accountant of the assessee but he did not pursue the matter thereafter as the amounts levied as penalties were negligible in his view. Shri D.P. Mahajan after bringing out these facts on record expired. According to the counsel appearing for the assessee, it was submitted that the delay had occurred because of the negligent conduct and erroneous advice of his previous counsel late Mr. D.P. Mahajan. It was only when the notice issued in connection with the prosecution reached him, the assessee became aware of the penalties and he caused the appeals to be filed. 3. CIT(A) placing his reliance on some judicial pronouncements where erroneous advice rendered by a counsel to his client was considered to constitute reasonable cause for condoning the delay caused the appeals to be admitted after condoning the delay under section 249(3). It is against this or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impeached in an appeal to be filed before the Appellate Tribunal. He also referred to the observations made in the famous commentary of Palkhivala on page 1125 to emphasise that an order passed under section 30(2) refusing to condone the delay should be considered as an order passed under section 31. Similarly, an order passed under section 249(3) should be read as an order passed under section 250. But his main emphasis was on the Supreme Court judgment in the case of Mela Ram. 5. Having heard the respective contentions by both sides, we are of the view that an order passed under section 249(3) cannot be considered to be an order passed under section 250 in all circumstances. There is unanimity in the opinion of all Courts now. Whatever conflict there was earlier has been resolved by the Supreme Court judgment in Mela Ram's case relied on by Revenue. Supreme Court dealt with a case where an AAC had refused to condone the delay in filing the appeal and had accordingly dismissed the appeal. It was held that the order passed by the AAC under section 30(2) of the 1922 Act was in effect an order passed under section 31 of that Act. But the Supreme Court in disposing of the appeal d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the contention of Revenue that an order passed under sub-section (3) of section 249 should be read as an order passed under section 250. Their Lordships of Punjab and Haryana High Court in disposing of the appeal in the case of CIT v. Ram Lal Mansukh Rai [1970] 77 ITR 964 explained that the right of appeal is an express grant by the statute and it cannot be implied. If statute has not specifically provided for an appeal against an order it cannot be acquired by implication. Taking this view of the matter, we reject the second contention of Revenue also that we must take an order passed under section 249(3) as an order passed under section 250. This is enough, in our view, to dispose of the appeals filed by Revenue. In our view, the appeals filed by Revenue for the two years are not competent and have to be dismissed. We order accordingly. 6. Appeals dismissed. Per Shri P.K. Mehta, Accountant Member 7. I am unable to share the conclusion of the learned Judicial Member in para 5 of his order that the two appeals filed by the Revenue against the order of the CIT(A), purported to be passed under section 249(3) of the Income-tax Act, are incompetent. It appears from tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal. These observations cannot apply in a situation with which we are concerned. Here the CIT(A) has dulv noticed the question of delay and proceeded to condone the delay after hearing the assessee's authorised representative and the ITO. In such a situation, in my opinion, the Revenue will have to come in appeal when the CIT(A) has condoned the delay and has not to wait till the appeal is taken up on merits to be heard by the CIT(A). 9. Again if the last paragraph in the Supreme Court judgment at pp. 618-619 is fully read along with certain further observations in another para at page 618, I find it becomes clear that the order of the CIT(A) in hand is in truth and law passed under section 250 of the Income-tax Act. In para first beginning on page 618, the Supreme Court has summed up the position about the nature of orders disposing preliminary grounds from the angle of appealability in following words:- "There is thus abundant authority for the position that section 31 should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders which dispose of the appeal on preliminary issues, such as li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but if he chooses to dispose of only the question of limitation in assessee's favour and desists from deciding the appeal on merits and dubs the order under section 249(3) of the Income-tax Act, the order ceases to be under section 250 of the Act and thus not appealable before the Tribunal. This is not what is stated by the Supreme Court in its judgment and the Supreme Court was treating both the parties to the litigation in a similar fashion. Consequently, I will hold that even though the CIT(A) has disposed of the appeal piece-meal the order emerging is an appealable order under section 250 of the Act; to hold otherwise will be to leave the question of appealability or otherwise of the order of the CIT(A) to his manner of handling a particular appeal and dubbing his order under section 249(3). Clothing of CIT(A) with such discretion to the destruction of the rights of thd respondent cannot be the intention of law or of the judgment of the Supreme Court, in the case of Mela Ram Sons. 10. I find that out of several commentaries on Income-tax Act available to me only one commentary refers to a situation arising in this case. This commentary is of V.S. Sundaram on Law of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench but to summarise these the Assessing Officer levied penalties under-section 271(1)(c) for the assessment years 1962-63 and 1963-64 in sums of Rs.5,000 and Rs.11,749 respectively. The assessee filed appeals against these orders on 13th April, 1983 whereas the orders levying the penalties were passed for the assessment year 1962-63 on 16th March, 1973 and for the assessment year 1963-64 on 28th January, 1970 respectively. There is no dispute between the parties that the appeals were inordinately late and out of time. 4. The appeals were fixed for hearing before the learned CIT(A) and at which stage the question of limitation was considered at length and detailed arguments were advanced by the parties. The main thrust of the arguments advanced on behalf of the assessee was that his earlier Counsel late Sh. D.P. Mahajan had given wrong advice and it was because of his default that the appeals had not been filed and the assessee came to know of the implications only when the notices for prosecution had been issued. In support of the aforesaid arguments, reliance was placed on certain reported decisions and the learned CIT(A) in considering the arguments advanced held in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 253(2) to emphasise that an appeal could be preferred to the Tribunal in case the order was passed by the Id. CIT(A) under section 250 or under section 154 and there was no provision for filing an appeal against the order passed under section 249(3) of the I.T. Act. In support of the aforesaid arguments, a number of decisions were cited, more particularly that of the Allahabad High Court in the case of JK. Synthetics Ltd. Their lordships had held in the aforesaid case that an order passed under section 249(3) could not be subject matter of rectification under section 154 and therefore, the first appellate authority was not competent to look into muchless rectify any mistake which appeared to have occurred in the order passed under section 249(3) of the Act. The learned DR on the other hand placed reliance on the judgment of the Hon'ble Supreme Court in the case of Meta Ram Sons, to emphasise that where an order of the First Appellate Authority held that there was no sufficient reason for excusing delay under section 30(2) of the I.T. Act and rejected the appeal as time barred it was in fact an order under section 31 and such an order was liable to be impeached in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble Judicial Member held that objection to the admission of the appeal after condoning the delay can only be taken up at the hearing of the appeal itself and in the present case, the appeals were still lying unheard and these were still to be disposed off on merits by the teamed CIT(A). The conclusion, in other words was that the Revenue could not claim that it had a light to object to the admission before the hearing of the appeal. According to the Hon'ble Judicial Member, where an order was passed under section 249(3), the party aggrieved was not entitled to castigate such an order by filing an appeal before the Tribunal. According to him, it had been rightly contended on behalf of the assessee that the provisions contained in sub-section 2 of section 253 authorised the learned CIT to file an appeal only against the orders passed by the first appellate authority under section 154 or 250 of the I.T. Act, and the present order passed by the CIT(A) condoning the delay and directing the appeals to be heard on merits was not an order passed either under section 250 or under section 154. The Ld. Judicial Member rejected the contention of the Revenue that the order passed under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of hearing of the appeal. The relevant observations according to the Ld. AM were not applicable to the facts of the assessee's case where the Ld. CIT(A) had noticed the question of delay and proceeded to condone the same after hearing the Assessing Officer and also assessee's Authorised Representative and accordingly in his opinion, the Revenue would have to come in appeal to the tribunal when the learned CIT(A) condoned the delay and it was not necessary to wait till the appeal was taken up on merits to be heard by the learned CIT(A). 11. The Ld. Accountant Member also referred to certain observations in the judgment of the Hon'ble Supreme Court in the case of Mela Ram Sons, more so, at pages 618 and 619 and observed that orders in appeal passed by the Id. CIT(A) were in law passed under section 250 of the I.T. Act and for the purposes of deciding the present reference extract the observations of the Hon'ble Supreme Court in the case of Mela Ram Sons and which find place at pages 8 and 9 of the order of the Hon'ble Accountant Member as follows: "There is thus abundant authority for the position that section 31 should be liberally construed so as to include not only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Ld. AM this was not what the Hon'ble Supreme- Court had held in its judgment in the case of Mela Ram Sons since both the parties were treated in a similar fashion. He accordingly held that even though the learned CIT(A) had disposed off the appeal piecemeal, the order emerging was an appealable order under section 250 of the Act and to hold otherwise would be to leave the question of appealability or otherwise of the order of the CIT(A) to his manner of handling a particular appeal and dubbing his order as one passed under section 249(3) of the Act. According to the Ld. AM, in case the Ld. CIT(A) was clothed with such discretion to the destruction of the lights of the respondent then the same cannot be the intention of law or of the judgment of the Hon'ble Supreme Court in the case of Mela Ram Sons. 12. Lastly, in coming to the conclusion that the appeals preferred to the Tribunal by the Revenue against the order passed by the Ld. CIT(A) condoning the delay and admitting assessee's appeal were competent, the Ld. Accountant Member referred to the commentary of V.S. Sundaram on the "Law of Income-tax in India". 13. Before me, the learned DRs argued at length supporting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the observations 'hearing of the appeal' were relevant only when an order had been passed ex parte behind the back of the respondent condoning the delay and under these circumstances there was no question of agitating the same at any earlier point of time. The Id. Accountant Member in turn referred to certain observations in the same judgment whereby it had been held that where the statute provided a right of appeal but none was preferred within the time prescribed, the respondent acquired a valuable right, of which he was deprived by an order condoning delay and admitting an appeal behind his back. The question of acquisition of a valuable right by the respondent is not a point of difference between the learned Members and it is also not a dispute that the question of condonation can be agitated by a party in an appeal before the first appellate authority and such appeal may consist of not only considering the question of delay but also a decision on merits. The Id. Accountant Member held that where an order passed under section 249(3) declining to admit an appeal on the ground of limitation and rejecting the same was treated to be an order under section 250 then by the same logi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals on merits. The Id. AM has aptly extracted certain relevant observations of the Hon'ble Supreme Court at page 8 of the order and which I have also adverted to, in the present order. This leaves no doubt in my mind that the provisions of the relevant section are to be liberally construed so as to take into account not only the orders passed on merits but also those which decide appeals on preliminary issues, including question of limitation. Further, there should be no construction which deprives any party of a valuable right and the delay in filing of the appeal on the part of a party does gives to the respondent a valuable right from which he should not be deprived without a proper hearing. I have to further hold that one does not have to see the nomenclature of the order passed but the substance thereof and by this I would like to refer to the facts of the present case that even if an order passed by the Id. CIT(A) is purported to be one under section 249(3). It is in substance an order passed under section 250 and, therefore, appealable before the Tribunal. 17. In the final analysis, I agree with the learned Accountant Member in coming to the conclusion that he did on fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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