1950 (9) TMI 18 - HC - Income Tax

Summary

Issues:
1. Whether the Appellate Assistant Commissioner of Income-tax is debarred from holding an appeal as time-barred after issuing a notice for hearing.
2. Whether the refusal of the Appellate Assistant Commissioner to admit an appeal on the ground of being time-barred is appealable under Section 33 of the Income-tax Act.

Analysis:
The case involved a reference under Section 66(1) of the Indian Income-tax Act, presenting two questions for consideration. The first question was whether the Appellate Assistant Commissioner is precluded from deeming an appeal time-barred after issuing a notice for its hearing. The second question pertained to the appealability of the refusal to admit an appeal based on being time-barred under Section 31 of the Act. The facts revealed that the assessee received a notice of demand on January 10, 1947, and filed an appeal on December 8, 1947, beyond the 30-day period from the notice. The Appellate Assistant Commissioner admitted the appeal but later dismissed it as time-barred on February 29, 1948, after issuing a notice for hearing. The Tribunal determined that the dismissal was under Section 30(2) and not Section 31, rendering it non-appealable to the Tribunal.

The crux of the matter revolved around the interpretation of Section 30(2) of the Income-tax Act, which allows the Appellate Assistant Commissioner to admit an appeal after the prescribed period if sufficient cause is shown. The Court noted that once an appeal is admitted under Section 30(2), subsequent proceedings fall under Section 31 for final disposal. The Court emphasized the importance of the regular performance of official acts and presumed that the Appellate Assistant Commissioner was satisfied with admitting the appeal. It was clarified that the Appellate Assistant Commissioner could still decide against the assessee on limitation during the final hearing under Section 31.

The Court reframed the question to address the confusion and concluded that the Appellate Assistant Commissioner is not prohibited from reconsidering the time-barred issue even after admitting the appeal under Section 30(2). It was determined that a subsequent dismissal after issuing a notice for final hearing constitutes an order under Section 31 of the Act. Therefore, the Appellate Assistant Commissioner had the authority to re-examine the time-barred aspect during the final hearing, and the dismissal was considered under Section 31. The Court awarded costs to the assessee and answered the reference accordingly.