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1951 (9) TMI 42 - HC - Income Tax

Issues Involved:
1. Whether the order of the Appellate Assistant Commissioner rejecting the appeal as time-barred was an order under Section 31 of the Indian Income-tax Act.
2. Whether an appeal against such an order lies to the Appellate Tribunal.

Issue-wise Detailed Analysis:

1. Whether the order of the Appellate Assistant Commissioner rejecting the appeal as time-barred was an order under Section 31 of the Indian Income-tax Act:

The primary issue was to determine if the rejection of an appeal by the Appellate Assistant Commissioner on the grounds of it being time-barred constituted an order under Section 31 of the Indian Income-tax Act. The Court examined the procedural aspects and the powers conferred by Sections 30 and 31 of the Act.

The Court noted that under the Income-tax Act of 1922, before its amendment in 1939, Section 30 provided the right to appeal against assessment orders, while Section 31 outlined the procedure and powers for disposing of such appeals. The Court emphasized that Section 31 was the only section empowering the Appellate Assistant Commissioner to dispose of an appeal, whether it was on preliminary grounds or on merits.

The Court referred to the definition of an appeal in the context of the Civil Procedure Code, as stated by Sir Dinshaw Mulla in Nagendranath Dey v. Suresh Chandra Dey, asserting that any application to an appellate court asking to set aside or revise a decision is an appeal, regardless of its competency. The Court applied this definition to the Income-tax Act, concluding that even an appeal rejected on preliminary grounds (such as being time-barred) falls under the appellate jurisdiction and powers described in Section 31.

The Court also discussed the procedural necessity for the appellate authority to hear the appellant and consider preliminary objections, which are implicitly covered under the powers granted by Section 31. The Court found that the legislature intended for Section 31 to encompass all aspects of the appeal process, including the rejection of appeals on preliminary grounds.

2. Whether an appeal against such an order lies to the Appellate Tribunal:

The Court analyzed whether an appeal against the order of the Appellate Assistant Commissioner rejecting an appeal as time-barred could be made to the Appellate Tribunal. The Court reviewed various precedents, including decisions from the Bombay, Allahabad, and Patna High Courts, and the Judicial Committee of the Privy Council.

The Court found that the narrow construction of Section 31 by the Bombay and Allahabad High Courts, which limited the scope of appealable orders to those admitted within the prescribed period or after condonation of delay, left the appellate authority powerless to decide preliminary points. This interpretation was deemed incorrect as it deprived the aggrieved party of a remedy and made the appellate process unjust.

Instead, the Court favored the liberal construction adopted by the Patna High Court, which included orders rejecting appeals on preliminary grounds within the purview of Section 31. This interpretation was supported by the principles laid down in the Privy Council's decision in Income-tax Commissioner v. Khemchand Ramdas, which emphasized the appellate authority's duty to decide preliminary issues as part of its appellate powers.

The Court concluded that the order of the Appellate Assistant Commissioner rejecting the appeal as time-barred was indeed an order under Section 31 of the Act. Consequently, such an order was appealable to the Appellate Tribunal.

Conclusion:

The Court answered the reference in the affirmative, holding that the order of the Appellate Assistant Commissioner rejecting the appeal as time-barred was an order under Section 31 of the Indian Income-tax Act and was appealable to the Appellate Tribunal. The Court awarded costs of Rs. 250 to the assessee.

 

 

 

 

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