2016 (11) TMI 1049 - HC - Income Tax

Maintainability of Cross Objection - Held that - While there is nothing on record to assist us an ascertaining extent of delay, there is also no application that has been preferred before us as contemplated in Rule 904. As far as Rule 907 is concerned on proper reading of the said Rule it becomes evident that if the pending appeal which has been admitted or which is pending admission, what is intended is that if the pending appeal does not come up for hearing on merits and if the Respondent has filed Cross Objection, the Respondent may apply to have Cross Objection heard as if the same were Cross Appeal and although the Appeal is pending. The Rules do not enable the Respondent Cross Objector to make such application if the Appeal is already rejected for non removal of office objections. Under High Court Rule 986, an appeal can be rejected by the Prothonotary and Senior Master if the Appellant does not remove office objections within 30 days of lodging an Appeal. In the present case it is the Court that has granted additional time to remove office objections failing which the appeal would stand rejected and it was accordingly rejected. Rule 907 does not give any right to the Appellant, over and above what is provided under Order 41 Rule 22 Sub-Rule (4). All that it does is to enable the cross objector to seek hearing of the Cross Objection as if the same were Cross Appeal, during pendency of the appeal and nothing more. In the circumstances having considered the various judgments relied upon by the Applicants and the submissions of the counsel we are of the view that present Cross Objection is not maintainable in view of the fact that the Appeal itself was rejected.

Summary

Issues Involved:
1. Maintainability of the Cross Objection after the rejection of the Income Tax Appeal for non-removal of office objections.
2. Interpretation and application of Order 41 Rule 22 of the Code of Civil Procedure.
3. The effect of non-compliance with office objections on the appeal and the Cross Objection.
4. The distinction between rejection and dismissal for default of an appeal.

Detailed Analysis:

1. Maintainability of the Cross Objection:
The primary issue is whether the Cross Objection is maintainable after the Income Tax Appeal was rejected for non-removal of office objections. The court noted that the appeal was rejected on 9th November 2010 due to non-compliance with office objections, and the Cross Objection was filed within the prescribed time. The applicant argued that the Cross Objection is maintainable as it was filed after receiving notice of the hearing of the appeal.

2. Interpretation and Application of Order 41 Rule 22:
Order 41 Rule 22 allows a respondent to file a Cross Objection within one month from the date of service of notice of the day fixed for hearing the appeal. The court examined the Supreme Court's decision in Mahadev Govind Gharge, which clarified that the limitation period for filing a Cross Objection starts from the date of service of notice of the hearing. The court emphasized that the Cross Objection can be entertained even if the original appeal is withdrawn or dismissed for default.

3. Effect of Non-Compliance with Office Objections:
The court highlighted the importance of complying with office objections as part of the justice administration system. Non-removal of objections signifies a conscious decision by the litigant not to pursue the case. The court distinguished between "rejection" of a case for non-compliance with office objections and "dismissal for default," which indicates non-compliance with a court order. In this case, the appeal was rejected for non-removal of office objections, not dismissed for default.

4. Distinction Between Rejection and Dismissal for Default:
The court noted that the appeal was never registered on the court's file and was rejected at a preliminary stage for non-removal of office objections. The court held that the Cross Objection could not be entertained because the appeal was not pending and had not been heard on merits. The court referred to various judgments to support its view that a Cross Objection can only be entertained if the appeal is pending and the court has assumed jurisdiction to hear it.

Conclusion:
The court concluded that the Cross Objection is not maintainable as the appeal was rejected for non-removal of office objections. The court allowed the applicant to file an appropriate application to treat the Cross Objection as an appeal and seek condonation of delay if so advised. The Cross Objection was dismissed, and there was no order as to costs.