1991 (3) TMI 65 - HC - Income Tax

Summary

Issues:
1. Timeliness of the application under section 256(1) of the Income-tax Act, 1961.

Detailed Analysis:
The High Court of Delhi considered the timeliness of an application under section 256(1) of the Income-tax Act, 1961. The case involved appeals filed by the Department against orders of the Commissioner of Income-tax (Appeals) related to the deletion of a penalty. The order in question was served on the Chief Commissioner of Income-tax, New Delhi, on April 28, 1989, and subsequently on the Commissioner of Income-tax, Delhi (Central I), on August 14, 1989. The Commissioner filed the application under section 256(1) on October 12, 1989, within the 60-day period for filing the reference application.

The Tribunal, in an order dated December 5, 1989, concluded that the limitation period began from August 14, 1989, when service was effected on the Commissioner of Income-tax (Central 1). The petitioner challenged this decision, arguing that the date of service on the Chief Commissioner should be considered for calculating the limitation period. The petitioner's counsel contended that the amendment to section 254(3) aimed to facilitate valid service by allowing orders to be served on either the Commissioner or the Chief Commissioner.

However, the Court emphasized that the focus should be on section 256(1) for determining the timeliness of the reference application. Unlike section 254(3), there was no amendment in section 256(1) regarding service on the Chief Commissioner. The Court held that the absence of the term "Chief Commissioner" in section 256(1) precluded reading it into the provision. The legislative intent was clear that only service on the assessee or the Commissioner triggered the period for filing a reference application under section 256(1).

In a similar case, the Court had previously ruled that service on the Commissioner of Income-tax was crucial for computing the limitation period under section 256(1) or section 256(2). The Court reiterated that the Commissioner of Income-tax had the jurisdiction to file such applications, emphasizing the importance of serving the Commissioner for determining the timeliness of the application.

Ultimately, the Court dismissed the writ petition, finding no merit in the petitioner's argument. The judgment highlighted the significance of serving the Commissioner of Income-tax for initiating reference applications under the Income-tax Act, emphasizing the clear legislative framework governing the timeliness of such applications.