1964 (7) TMI 46 - HC - Income Tax

Summary

Issues Involved:
1. Whether the petitioner made the order of the Appellate Assistant Commissioner the subject of an appeal to the Income-tax Appellate Tribunal.
2. Whether a time-barred appeal is considered an appeal in the eye of law.
3. Whether the Commissioner of Income-tax is precluded from entertaining a revision against the order of the Appellate Assistant Commissioner when an appeal has been made to the Tribunal.

Issue-wise Detailed Analysis:

1. Whether the petitioner made the order of the Appellate Assistant Commissioner the subject of an appeal to the Income-tax Appellate Tribunal:

The petitioner, a trader in tobacco, was assessed for the year 1958-59, and a sum of Rs. 14,000 was included as undisclosed income by the Income-tax Officer, Guntur. The petitioner appealed to the Appellate Assistant Commissioner, Guntur, who dismissed the appeal on January 13, 1960. Subsequently, the petitioner appealed to the Income-tax Appellate Tribunal, Hyderabad, which dismissed the appeal in December 1960 as time-barred. The petitioner then sought a revision from the Commissioner of Income-tax, who rejected it based on clause (c) of the first proviso to subsection (2) of section 33A of the Income-tax Act, 1922. The court noted that the petitioner had indeed made the order of the Appellate Assistant Commissioner the subject of an appeal to the Tribunal, thus precluding the Commissioner from entertaining a revision.

2. Whether a time-barred appeal is considered an appeal in the eye of law:

The petitioner argued that a time-barred appeal is not an appeal in the eye of law, as it was dismissed on the ground of limitation and not on merits. The court rejected this contention, stating that the legal character of a proceeding does not depend on the nature of the order passed by the quasi-judicial authority. Section 33(4) of the Act empowers the Tribunal to pass any order on the appeal, including dismissal as time-barred, and such an order is final under section 33(6). The court cited the Judicial Committee of the Privy Council in Nagendranath Dey v. Sureshchandra Dey, which held that an application to an appellate court to set aside or revise a decision is an appeal, even if irregular or incompetent. Thus, the court concluded that the appeal to the Tribunal was indeed an appeal in the eye of law.

3. Whether the Commissioner of Income-tax is precluded from entertaining a revision against the order of the Appellate Assistant Commissioner when an appeal has been made to the Tribunal:

The court examined the statutory provisions of sections 33 and 33A of the Income-tax Act, 1922. It noted that an assessee aggrieved by an appellate order of the Appellate Assistant Commissioner has two alternative remedies: an appeal to the Tribunal or a revision to the Commissioner. Once the petitioner chose to appeal to the Tribunal, he effectively gave up the remedy of revision. The court emphasized that the Commissioner is precluded from entertaining a revision if the order has been made the subject of an appeal to the Tribunal, regardless of the appeal's outcome. The court also referred to the Supreme Court's decision in Mela Ram & Sons v. Commissioner of Income-tax, which held that an order rejecting an appeal as time-barred is an order passed under section 31 and is open to appeal under section 33. Consequently, the court concluded that the Commissioner was right in rejecting the revision as incompetent.

Conclusion:

The court dismissed the writ petition, holding that the petitioner had indeed made the order of the Appellate Assistant Commissioner the subject of an appeal to the Tribunal, a time-barred appeal is considered an appeal in the eye of law, and the Commissioner of Income-tax is precluded from entertaining a revision when an appeal has been made to the Tribunal. The writ petition was dismissed with costs.