1968 (10) TMI 32 - HC - Income Tax

Maintainability of appeal u/s 30(1) - firm was dissolved - two separate appeals filed against the assessment orders - validity of appeals filed by the partner, before the AAC

Summary

Issues:
1. Validity of appeals filed by partner, Mahabir Prasad, before the Appellate Assistant Commissioner under the second proviso to section 30(1).
2. Timeliness of the appeals filed by Mahabir Prasad before the Appellate Assistant Commissioner.

Detailed Analysis:
1. The judgment pertains to a case involving the dissolution of a firm with partners Babu Ram, Satya Deo, and Mahabir Prasad. The firm was assessed for the years 1957-58 and 1958-59, leading to separate appeals by Babu Ram and Mahabir Prasad. The Appellate Assistant Commissioner dismissed Mahabir Prasad's appeal citing it as time-barred and not maintainable due to Babu Ram's prior appeal. However, the Income-tax Appellate Tribunal reversed this decision, allowing Mahabir Prasad's appeal. The High Court upheld the Tribunal's decision, emphasizing that both partners had the right to appeal under the second proviso to section 30(1) of the Indian Income-tax Act, 1922. The court concluded that there was no impediment to consolidating the appeals filed by the partners, as they were both entitled to appeal, and the appeals could have been disposed of together.

2. Regarding the timeliness of Mahabir Prasad's appeal, the judgment delves into the period of limitation, which is thirty days for filing an appeal. Mahabir Prasad filed his appeal 39 days after the service of the demand notice on partner Satya Deo. The Appellate Assistant Commissioner considered Satya Deo's service as constructive service on Mahabir Prasad. However, the court highlighted that this assumption was questionable, especially since Satya Deo was served years after the firm's dissolution. Additionally, Mahabir Prasad spent 15 days obtaining a copy of the assessment order, raising the issue of whether this time could be excluded from the limitation period. Mahabir Prasad relied on section 67A of the Act, which allows excluding the time required to obtain a copy of the order complained of. The court agreed with this interpretation, emphasizing that the language of the section does not impose a condition to file the copy of the order with the appeal. Consequently, Mahabir Prasad's appeal was deemed timely after excluding the period spent obtaining the assessment order copy.

In conclusion, the High Court ruled in favor of Mahabir Prasad, affirming the validity of his appeals and their timeliness. The court directed the Commissioner of Income-tax, U.P., to pay costs to Mahabir Prasad and answered the questions referred in the affirmative in Mahabir Prasad's favor.