1990 (1) TMI 115 - AT - Income Tax

Issues Involved:
1. Whether the reference applications were barred by limitation.
2. The applicability of section 256(1) of the Income-tax Act, 1961 concerning the date of service of the Tribunal's order.
3. The validity of the practice of serving orders on the Chief Commissioner and its impact on the limitation period.
4. The role of the Chief Commissioner in forwarding orders to the concerned Commissioner.
5. The relevance of Board instructions and legislative amendments to the issue of limitation.

Detailed Analysis:

1. Whether the reference applications were barred by limitation:
The Tribunal examined the preliminary objection raised by the Registry, which pointed out that the applications were barred by time by 44 days. The Tribunal's order dated 13-7-1989 was served on the Chief Commissioner of Income-tax, Delhi on 28th July 1989, and the reference applications were presented on 9-11-1989. The Commissioner of Income-tax, Delhi-III argued that the limitation period should start from the date he received the order (12-9-1989), making the applications timely. However, the Tribunal upheld the Registry's objection, stating that the limitation period should start from the date the order was served on the Chief Commissioner, making the applications out of time.

2. The applicability of section 256(1) of the Income-tax Act, 1961 concerning the date of service of the Tribunal's order:
The Tribunal analyzed section 256(1) which requires a reference application to be filed within 60 days from the date of service of the order on the Commissioner. The Commissioner argued that the limitation should start from the date he received the order. However, the Tribunal emphasized that the amended section 254(3) allows the Tribunal to serve the order on either the Chief Commissioner or the Commissioner. The Tribunal concluded that the receipt of the order by the Chief Commissioner satisfies the obligation under section 254(3), and the limitation period should start from that date.

3. The validity of the practice of serving orders on the Chief Commissioner and its impact on the limitation period:
The Tribunal considered the practice of serving orders on the Chief Commissioner, who then forwards them to the concerned Commissioner. This practice was established to resolve delays in the service of orders. However, the Tribunal determined that this practice cannot override the statutory provisions. The Tribunal held that the receipt of the order by the Chief Commissioner should be considered the date of service for limitation purposes, aligning with the legislative intent for prompt disposal of reference applications.

4. The role of the Chief Commissioner in forwarding orders to the concerned Commissioner:
The Tribunal noted that the Chief Commissioner is expected to act promptly in forwarding orders to the concerned Commissioner. Delays in this process should not extend the limitation period. The Tribunal emphasized that the Chief Commissioner acts as an agent of the Commissioner, and the receipt of the order by the Chief Commissioner is equivalent to receipt by the Commissioner for the purposes of calculating the limitation period.

5. The relevance of Board instructions and legislative amendments to the issue of limitation:
The Tribunal referred to Instruction No. 1387 issued by the Central Board of Direct Taxes (CBDT) on 3-3-1981, which outlined the procedure for forwarding Tribunal orders and emphasized the importance of adhering to statutory limitations. The Tribunal observed that the legislative amendment to section 254(3) effective from 1-4-1988, allowing service on the Chief Commissioner, did not intend to extend the limitation period. The Tribunal concluded that the understanding between the President of the Tribunal and the Chief Commissioner, which allowed counting the limitation from the date the Commissioner received the order, was no longer valid post-amendment.

Conclusion:
The Tribunal dismissed the reference applications as not maintainable due to being barred by limitation, emphasizing that the statutory provisions and legislative intent must prevail over any private understanding or practice. The limitation period should be calculated from the date the order was served on the Chief Commissioner, and the Tribunal has no power to condone delays beyond 30 days as prescribed by law.

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