9911796707
TMI Blog2005 (10) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... will have to be treated as pending in the eye of law. Consequently, the order rejecting declarations filed by the petitioner will become unsustainable in view of subsequent events. X X X X Extracts X X X X X X X X Extracts X X X X ..... her chartered accountant's letter dated January 27, 1999, filed fresh declarations under the Kar Vivad Samadhan Scheme to settle tax liability arising under the orders of assessment and penalty suffered by the deceased which were the subject matters of the appeals filed before the Tribunal on January 21 and 22, 1999, as stated hereinabove. On February 16, 1999, the petitioner's chartered accountant made the submission to respondent No. 1 contending that the fresh declarations made by the petitioner under the Kar Vivad Samadhan Scheme on January 28,1999, were competent, legal and valid in all respects, particularly, when such declarations had been filed by the petitioner after presenting the appeals before the Tribunal on January 21 and 22, 1999. The petitioner's chartered accountant, therefore, requested respondent No. 1 to issue certificate in favour of the petitioner under section 90(1) of the Finance Act with respect to the declarations made on January 28, 1999, under the Kar Vivad Samadhan Scheme for the assessment years in question. The aforesaid submission made on behalf of the petitioner did not find favour with respondent No. 1, who was pleased to reject all the declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y much pending before the Tribunal. In that view of the matter, he submits that the impugned order is unsustainable and the same is liable to be quashed and set aside. Mr. Joshi, relying upon the judgment of the apex court in the case of Mela Ram and Sons v. CIT [1956] 29 ITR 607 urged that an appeal presented out of time is the appeal and the order dismissing it as time-barred is one passed in the appeal. He further placed reliance on the judgment in Sheodan Singh v. Daryao Kunwar, AIR 1966 SC 1332, rendered by a four- judge Bench of the apex court wherein the question that arose was whether the dismissal of an appeal from a decree on the ground that the appeal was barred by limitation was a decision in the appeal. The apex court held: "We are therefore of opinion that where a decision is given on the merits by the trial court and the matter is taken in appeal and the appeal is dismissed on some preliminary ground, like limitation or default in printing, it must be held that such dismissal when it confirms the decision of the trial court on the merits, itself amounts to the appeal being heard and finally decided on the merits whatever may be the ground for dismissal of the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the appeal is condoned. In the instant case, the limitation in preferring appeals having not been condoned by the first appellate authority the appeals filed before it were not competent, hence, no appeals were pending on the date when the declarations were made. Mr. Kotangale submits that the appeals filed before the Tribunal were against the orders refusing to condone the delay and not against the orders of assessment giving rise to tax arrears. He, therefore, submits that no fault can be found with the decision of respondent No. 1 rejecting the declarations filed by the petitioner under the Kar Vivad Samadhan Scheme. Mr. Kotangale further submits that the appeals filed by the petitioner before the Tribunal were never admitted. Since the appeals themselves were not admitted, the said appeals could not be treated as admitted appeals as required under section 95(i)(c) of the Finance Act. He, thus, tried to support the impugned order and prayed for dismissal of the petition. In rejoinder: Mr. Joshi, learned counsel for the petitioner, submits that in the Tribunal there is no procedure to admit an appeal and then to hear it on the merits. In other words, as per his submission, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments of the apex court in Computwel Systems P. Ltd. [2003] 260 ITR 86 and Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435, submits that the earlier judgments of three and four-judge Benches were not brought to the notice of the apex court when the case of Computwel Systems P. Ltd. [2003] 260 ITR 86 was heard and decided, which can be said to be a cause for taking a little different view giving a prima facie picture that it runs contrary to the earlier views of the apex court that an appeal barred by limitation is still an appeal. He, thus, submits that for any reason if any conflict is noticed by this court in two judgments of the apex court referred to hereinabove, in that event, the judgment of the apex court in Computwel Systems P. Ltd. [2003] 260 ITR 86 should be treated as per-incuriam. The issue: The main issue for determination is: Whether an appeal against the order refusing to condone delay (which is very much tenable under the Act) can be said to be a pending appeal as contemplated under section 95(i)(c)? Emerging principles: Before proceeding to consider the above issue, let us first examine the principles emerging from various judgments of the apex court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was also not a decree, observed that the earlier judgments of the apex court in Mela Ram and Sons [1956] 29 ITR 607 and Sheodan Singh, AIR 1966 SC 1332, were not brought to the notice of the two-judge Bench and further went on to hold that dismissal of the appeal for default along with the application for condonation of delay in its filing was a decision in the appeal and, thereafter, the application for setting aside that decision under Order 9, rule 13 of the Code of Civil Procedure, 1908, was not maintainable. The submissions that the appeal filed with the application for condonation of delay was not an appeal and that such case should be treated as non-filing of appeal did not find favour with the apex court. In the case of Essar Constructions [2000] 6 SCC 94, the apex court ruled that a suit which is dismissed on the ground of limitation may be appealed against as a decree. By the same token dismissal of an application made under section 30 of the Arbitration Act on the ground of limitation was held as refusal to set aside the award. The apex court further went on to observe that if section 39(1)(vi) and section 17 of the Arbitration Act are read together, it would follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that if the appeal or revision is pending on the date of filing of the declaration under section 88 of the Scheme, it was not open to the designated authority to hold that the appeal/revision was sham, ineffective or infructuous. The apex court has also relied upon its other judgments delivered in the case of Raja Kulkarni [1953-54] 5 FJR 677; [1954] SCR 384 and Tirupati Balaji Developers P. Ltd. v. State of Bihar [2004] 5 SCC 1, wherein it was held that an appeal does not cease to be an appeal though irregular and incompetent. In the judgment of the three-judge Bench of the apex court in the case of Computwel Systems P. Ltd. [2003] 260 ITR 86, the factual scenario depicts that a delayed revision petition filed under section 264 of the Income-tax Act came to be dismissed for want of condonation of delay. The Commissioner, thus, did not entertain the declaration made by the petitioner under the Kar Vivad Samadhan Scheme. The writ petition filed in the High Court came to be dismissed. On a petition for special leave to appeal the apex court while affirming the decision of the Commissioner and dismissing the petition for special leave held that the revision petition could be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as barred by limitation. Since the delay was not condoned, the revision petition was held as not pending on the date of declaration; as such it was held that declaration was not maintainable. In Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435 (SC), the appeal was pending for consideration of the prayer seeking condonation of delay. In other words, the prayer for condonation of delay was neither granted nor rejected. In that view of the matter, the apex court held that the appeal was very much pending though it was delayed. We do not see any conflict of views in the three-judge Bench decision of the apex court in Computwel Systems P. Ltd. [2003] 260 ITR 86 and the two-judge Bench decision in Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435. As a matter of fact, in the case of Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435 (SC), the earlier judgment in the case of Computwel Systems P. Ltd. [2003] 260 ITR 86 (SC) has been, specifically, referred to by the apex court but no such conflict was noticed by it. In the case at hand, the very appeals, which were pending before the Tribunal, were well within limitation though they were against the order refusing to condone de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the apex court in Shyam Sundar Sarma's case [2005] 1 SCC 436. Having taken a survey of the judicial pronouncements of the apex court right from the judgment in the case of Mela Ram and Sons [1956] 29 ITR 607 based on the view taken by the Privy Council in the case of Nagendra Nath Dey v. Suresh Chandra Dey [1932] L.R. 59 Ind App. 283 till the judgment in the case of Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435 (SC), with respect to the question "whether an appeal accompanied by application for condonation of delay in filing appeal could be said to be an appeal in the eye of law", the impugned action is liable to be set aside and this petition is liable to be allowed. Considered from the third angle based on the settled position of law in Pasupuleti Venkateswarlu v. Motor and General Traders, AIR 1975 SC 1409 and Variety Emporium v. V.R.M. Mohd. Ibrahim Naina, AIR 1985 SC 207, the subsequent events taking place during the pendency of the litigation can very well be taken into consideration and the court is competent to mould the relief accordingly. In the case at hand, during the pendency of this petition, the Tribunal entertained and allowed appeals filed by the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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