2010 (3) TMI 752 - HC - Income Tax

Condonation of dely - whether the provision of section 260A of the Act 1961 has expressly or by necessary implication excluded the provisions of sections 4 to 24 of the Limitation Act, 1963, as contemplated in section 29 sub-section (2) of the Limitation Act, 1963 or not - the provision of reference is something different from that of appeal as the scope of the reference to the High Court or Supreme Court is to give opinion and not to decide the matter finally, while in case of appeal under any statute the court has to decide the matter finally - The court cannot make the amendment applicable expressly applying the doctrine of pari materia. If this amendment of the Act 1944 is read into section 260A of the 1961 Act it would amount to courts act of legislation The question before the Supreme Court was whether the High Court could entertain a reference application beyond the period of limitation prescribed in the above Act - It noticed that in some cases unlimited power was given whereas in other cases limited or no power was given - section 5 of the Limitation Act is squarely applicable to section 260A appeals - The section 5 application is allowed

Summary

Issues Involved:
1. Applicability of Sections 4 to 24 of the Limitation Act, 1963, to Section 260A of the Income-tax Act, 1961.
2. Power of the High Court to condone delay under Section 260A.
3. Impact of legislative amendments to Sections 35G and 35H of the Central Excise Act, 1944, on the interpretation of Section 260A.

Issue-wise Detailed Analysis:

1. Applicability of Sections 4 to 24 of the Limitation Act, 1963, to Section 260A of the Income-tax Act, 1961:
The primary issue is whether Section 260A of the Income-tax Act, 1961, excludes the applicability of Sections 4 to 24 of the Limitation Act, 1963, either expressly or by necessary implication. The judgment references the case of CCE v. Hongo India (P.) Ltd. [2009] 315 ITR 449 (SC), which held that the exclusion of these sections must be inferred from the special statute itself. Several High Courts have followed this ratio, concluding that Section 260A excludes the application of Section 5 of the Limitation Act. However, the judgment notes that the Supreme Court in Hongo India (P.) Ltd.'s case dealt with the provisions of reference under Section 35H of the Central Excise Act, 1944, without express exclusion of Sections 4 to 24 of the Limitation Act.

2. Power of the High Court to condone delay under Section 260A:
The judgment discusses the distinction between reference and appeal provisions, noting that references involve giving opinions, whereas appeals require final decisions. The legislative intention inferred is that rigid time limits are provided for references to avoid prolonged litigation, impacting the economy. The judgment cites various High Courts' decisions, including the Chhattisgarh, Madhya Pradesh, Allahabad, Gauhati, and Bombay High Courts, which held that the High Court lacks the power to condone delay under Section 260A. However, the judgment also references the case of CIT v. Anandilal Poddar & Sons Ltd. [2005] 279 ITR 104, where it was held that exclusion must be in expressed words, not by necessary implication.

3. Impact of legislative amendments to Sections 35G and 35H of the Central Excise Act, 1944, on the interpretation of Section 260A:
The judgment highlights a significant legislative amendment to Sections 35G and 35H of the Central Excise Act, 1944, which now expressly empowers the High Court to condone delays. This amendment, with retrospective effect, suggests that the earlier Supreme Court decision in Hongo India (P.) Ltd.'s case is no longer applicable. The judgment argues that the inclusion of procedural provisions like Order 41, Rule 3A of the Civil Procedure Code in Section 260A indicates the Legislature's intention to empower the court to condone delay. The judgment also references the Supreme Court's decision in Chaudharana Steel (P.) Ltd. v. CCE [2009] 8 JT 134, which did not examine the applicability of Section 5 of the Limitation Act in the context of Section 35G of the Central Excise Act.

Conclusion:
The judgment concludes that the legislative amendment to the Central Excise Act provides an additional aid to the construction of Section 260A of the Income-tax Act. It holds that the amendment indicates Parliament's intention to preserve the application of Section 5 of the Limitation Act while enacting Section 260A. Therefore, Section 5 of the Limitation Act is applicable to Section 260A appeals, allowing the High Court to condone delays. The judgment allows the application for condonation of delay, emphasizing that excluding the power of condonation would prejudice litigants and lead to injustice.