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Issues Involved:
1. Whether the Tribunal was right to dismiss the appeal as barred by time. 2. Whether it is perverse to hold that the net profit percentage is to be calculated on the gross receipt inclusive of the value of materials supplied by the Government. Detailed Analysis: Issue 1: Dismissal of Appeal as Barred by Time The Tribunal dismissed the appeal as barred by time because the memorandum of appeal filed by the assessee on 12th August 1968 was not accompanied by a certified copy of the order of the Appellate Assistant Commissioner (AAC). The assessee filed the certified copy on 1st March 1971, which the Tribunal found to be beyond the prescribed period of limitation. The Tribunal held that the appeal became competent only when the certified copy was filed, and since no application for condonation of delay was made, the appeal was time-barred. The assessee argued that the requirement to file a certified copy along with the memorandum of appeal is directory, not mandatory. The defect was an irregularity that was cured when the certified copy was filed before the hearing. Counsel for the assessee cited several cases to support the argument that non-compliance with procedural requirements should not result in dismissal if the memorandum of appeal was filed within the prescribed period. The revenue contended that the requirement is mandatory, referencing sections 253(3), (5), and 268 of the Income-tax Act, 1961, and Rule 9(1) of the Income-tax (Appellate Tribunal) Rules, 1963. The revenue argued that the Tribunal was correct in dismissing the appeal as time-barred due to the absence of a certified copy within the prescribed period. The Court concluded that the requirement to file a certified copy of the AAC's order along with the memorandum of appeal is mandatory. The Court referenced the Supreme Court's decision in Jagat Dhish Bhargava v. Jawahar Lal Bhargava, which held that the absence of a certified copy of the decree with the memorandum of appeal makes the appeal incomplete, defective, and incompetent. The Tribunal's decision to dismiss the appeal as time-barred was upheld. Issue 2: Calculation of Net Profit on Gross Receipts Including Government-Supplied Materials The Tribunal included the value of materials supplied by the Government in the gross receipts when estimating the net profit of the assessee. The assessee argued that no profit accrued from the materials supplied by the Government, as the cost of these materials was higher than the market rate and no profit was allowed on them. The revenue contended that the ITO was justified in rejecting the assessee's books of account and making the assessment based on an estimate under section 145 of the I.T. Act. The revenue argued that in cases where books of account are rejected, deductions for the cost of materials supplied by the Government should not be allowed. The Court noted that similar issues had been considered in previous cases, such as Gopendra Krishna Saha v. CIT and Rakhal Chandra Banerjee v. CIT. In these cases, the Court held that the net profit should be calculated on the gross value of the bills, including the value of materials supplied by the Government, unless there was clear evidence that the contract excluded the cost of materials from the profit calculation. The Court found that the assessee did not maintain a stock register and failed to prove that the materials supplied by the Government were wholly used or returned. The Tribunal's decision to include the value of materials supplied by the Government in the gross receipts for estimating net profit was upheld. The Court concluded that the Tribunal's decision was not perverse. Conclusion: 1. The Tribunal was right to dismiss the appeal as barred by time. 2. It is not perverse to hold that the net profit percentage is to be calculated on the gross receipt inclusive of the value of materials supplied by the Government. Both questions were answered against the assessee, with no order as to costs.
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