1971 (5) TMI 10 - HC - Income Tax

Application for reference - Appellate Tribunal by its order rejected the application as barred by time - whether High Court can accept the application under section 66(3) of Indian Income-tax Act 1922 - Held no

Summary

Issues:
- Application under section 256(2) of the Income-tax Act, 1961 for reference of questions of law to the High Court.
- Determination of the applicable Income-tax Act - 1922 or 1961.
- Consideration of the application under sub-sections (2) and (3) of section 66.
- Condonation of delay in filing the reference application.
- Jurisdiction of the Appellate Tribunal to condone delay.
- Power of the High Court under sub-section (3) of section 66 to condone delay.
- Dismissal of the reference application as barred by time.

Analysis:
The assessee filed an appeal before the Income-tax Appellate Tribunal for the assessment year 1961-62, which was dismissed for default. Subsequently, an application was made under section 256(1) of the Income-tax Act, 1961, for reference of certain questions of law to the High Court. The Appellate Tribunal rejected the application as time-barred, leading to the current reference. Section 256(2) allows an assessee to apply for a reference if the Appellate Tribunal refuses to state the case on the ground of no question of law. In this case, the Tribunal rejected the application on the basis of time limitation, making the reference application not maintainable under section 256(2.

The determination of the applicable Income-tax Act was crucial in this case. The Appellate Tribunal observed that the case fell under the provisions of the Indian Income-tax Act, 1922. The decision on which Act applies hinges on whether the return of income was filed before or after April 1, 1962, the date the Act of 1961 came into force. The record did not specify the filing date, but assuming the Act of 1922 applies, it was noted that the reference application could not be treated under sub-section (2) of section 66 due to the time-barred nature of the initial reference application.

Regarding the consideration under sub-sections (2) and (3) of section 66, it was highlighted that the Appellate Tribunal's refusal to condone the delay in filing the reference application was correct as per the jurisdictional limitations. Sub-section (7A) of section 66 was applicable, and the Appellate Tribunal was bound to dismiss the application as barred by time. The High Court lacked the power under sub-section (3) of section 66 to condone the delay, further solidifying the rejection of the application.

In conclusion, the High Court rejected the application, emphasizing that whether viewed under sub-section (2) or (3) of section 66 or under sub-section (2) of section 256, the application could not succeed. Despite no order as to costs, the counsel's fee was assessed at Rs. 100, bringing closure to the legal proceedings.