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TMI Blog1970 (2) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... , being aggrieved, issued a notice to the assessee-company on 14th December, 1964, proposing to take action under section 33B of the said Income-tax Act. Thereafter, by his order dated 20th January, 1965, the Commissioner, inter alia, held that the royalty of Rs. 8,54,503 debited to the profit and loss account for the year ending 31st December, 1960, and allowed in the assessment year in question by the Income-tax Officer was of a capital nature and ought not to have been allowed by the said officer. Against that order, the assessee preferred an appeal to the Tribunal. The Tribunal by its order dated 14th October, 1968, set aside that order of the Commissioner of Income-tax and allowed the appeal of the respondent-assessee. Therefore, the Commissioner of Income-tax filed a reference application on 24th December, 1968, on the following question of law and in that application the date of service of the relevant order of the Tribunal under section 33(4) of the Income-tax Act was shown as 26th October, 1968 : " Whether, on the facts and the circumstances of the case and on a proper construction of the deed of lease dated September 6, 1943, the Tribunal was right in holding that the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y one day. The ground put forward for such condonation by itself is reasonable enough. That ground is that the Income-tax Office was being shifted from No. 4, Hastings Street, Calcutta, to No. 18, Rabindra Sarani, Calcutta, with all records, files and bundles, during the relevant period of time, and that is how the mistake occurred. In fact, by an affidavit of the Income-tax Officer it is stated : " The clerk concerned who took delivery of the above mentioned order of the Tribunal placed it before me on October 26, 1968, and I duly put up my dated initials on the order. " Normally, one day's delay in such circumstances certainly would be condoned. But the difficulty here is not on the reasonableness and the merits of the application but on grounds of law which raise the question that the Tribunal has no legal power to condone delay in the time fixed by the statute. The main argument of the learned counsel for the Commissioner may be briefly summarised as follows : Admittedly, the new Limitation Act, 1963, applies in this case, if at all. It is the provisions of the new and not the old Act which are relevant for deciding the present application. Mr. Pal first relies on section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal came to the view that there was no power in the Tribunal to condone the delay under the Bombay Act. The Division Bench of the Bombay High Court set aside that order of the Tribunal. Be it noted here that the Bombay case was not a proceeding for reference under the taxing statute but an application under articles 226 and 227 of the Constitution of India. The learned judges of the Bombay High Court in that case did not adduce independent reasons for coming to that conclusion but supported their conclusion by relying on two decisions, one of the Supreme Court, Vidya Charan Shukla v. Khubchand Baghel and a Division Bench decision of this Court, Imperial Bucket Co. v. Smt. Bhagwati Basak. These authorities are clearly distinguishable from the present case. The two decisions, one of the Supreme Court and the other of this court, on which the Bombay High Court relied, did not relate to section 5 of the Limitation Act at all but section 12 of the Limitation Act, which, in our view, is a distinction of vital importance for the decision in this case. We shall indicate that importance presently. Section 5 of the Limitation Act uses the significant word "the court ". The Supreme Court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral power of condonation of delay which is available to the courts under section 5 of the Limitation Act. Finally, section 33A(2) of the Income-tax Act, 1922, gives the Commissioner power to condone delay for sufficient cause in making the application within the prescribed period thereunder. There is, therefore, sufficient internal evidence within the Income-tax Act itself as illustrated by its different sections that the Tribunal as such has no general power to condone delay as available to courts under section 5 of the Limitation Act. The language of section 66(7A) of the Income-tax Act, 1922, which was again introduced by an amending Act in 1939 made the provision expressly stating that section 5 of the Limitation Act applied to an application to the High Court by an assessee under section 66(2) or section 66(3). The expression " to an application to the High Court by an assessee " is significant to show that section 5 of the Limitation Act was made applicable to the High Court and not to the Tribunal which therefore remained excluded from the operation of section 5 of the Limitation Act. This analysis of the Indian Income-tax Act, 1922, confirms the view that there is no powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and is to be distinguished from an ordinary court, in the Income-tax Reference No. 44 of 1967 (Commissioner of Income-tax v. A. K. Das) where the judgment (unreported as yet) was delivered in August, 1969. Dr. Pal has also supported his argument by reference to a number of decisions to which we shall make a brief reference. In Hazi Mahboob Bux Ehhan Illahi v. Commissioner of Income-tax, a Division Bench of the Allahabad High Court came to the view that under section 66(3) of the Income-tax Act, an application can only be entertained when the Appellate Tribunal had wrongly decided that the application under section 66(1) is time-barred while, as a matter of fact, the application was within time. It made it clear that the High Court had not been given any power under section 8 to consider whether there was sufficient cause for delay, nor has the court any power similar to the power under section 5 of the Limitation Act to condone the delay. The language of section 66(3) of the Income-tax Act, 1922, in using the expression " and the High Court is not satisfied of the correctness of the Appellate Tribunal's decision ", appears to indicate without doubt that when the Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the papers had actually been received. Relying upon the date stamp, everybody took it for granted that limitation would expire on the 60th day, counting time from July 16, 1957. The application was filed on the last day of limitation on that supposition. Actually, the application was barred by a day. The Income-tax Tribunal, therefore, dismissed the application on December 4, 1957. The decision of the Tribunal was unsuccessfully challenged before the High Court. It is evident that the decision of the Tribunal was quite correct and the Tribunal had no option but to dismiss the application, since the law gives no jurisdiction to the Tribunal to extend limitation, as is done under section 5 of the Indian Limitation Act." Even this was not sufficient to deter the boldness of Mr. Pal for the Commissioner to suggest a point of distinction from the present case by the submission that the said decision related to a matter of 1957 before the new Limitation Act, 1963, came into force. That distinction is not relevant for the present case because the new and the old Limitation Acts on this point of the expression " the court " make no difference. In that view of the matter, it is not necess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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