Calcutta High Court
Paresh Premji Rajda vs Commissioner Of Income-Tax on 23 April, 1999
Equivalent citations: [1999]239ITR11(CAL)
JUDGMENT
1. As agreed upon by both the parties the appeal be treated as on the day's list and after hearing counsel for both the parties both the appeal and the application stand disposed of by the following order.
2. By this application it is prayed that the respondents be restrained from giving effect to the order of the Commissioner dated February 22, 1999, passed under Section 264 of the Income-tax Act, 1961. It is further prayed that application under Section 264 filed along with the application for condonation of delay be treated as pending until the Commissioner had disposed of the said application and the one for condonation of delay.
3. In the year 1995 there was a search and seizure operation which was carried on by the Income-tax Department under Section 132 of the Income-tax Act, 1961 (hereinafter referred to as the 1961 Act). During the course of the said search proceedings, the books of account of Rajda Polymers, a partnership firm of which the late Lilabati Rajda was a partner, were also seized.
4. In respect of the assessment year 1990-91, an intimation under Section 143(1)(a) of the 1961 Act was issued on October 9, 1992, by the Income-tax Officer, Ward 8(2), wherein a sum of Rs. 2,80,925 was determined as payable, Thereafter a regular assessment order under Section 143(3) of the 1961 Act was passed and served on the assessee on February 24, 1993. On January 29, 1999, a revisional application under Section 264 of the 1961 Act has been filed by the assessee before the Commissioner of Income-tax, Central-I. That application has been disposed of vide order dated February 22, 1999. On January 29, 1999, the assessee has also filed a declaration under the Kar Vivad Samadhan Scheme, 1998 (hereinafter referred to as the Scheme of 1998).
5. The application of the appellant under Section 264 of the Act of 1961 had been rejected vide order dated February 22, 1999, on the ground of delay as the application under Section 264 has been filed after six years from the date of service of the assessment order.
6. Heard learned counsel for the parties. Learned counsel for the appellant submits that as the application under Section 264 of the Act of 1961 was pending before the Commissioner of Income-tax as per provisions of Section 95 of the Scheme of 1998, the declaration should be considered under the scheme of 1998 on the merits. He placed reliance on the decision of the apex court in the case of Asgarali Nazarali Singaporewalla v. State of Bombay, .
7. Learned counsel for the respondent submits that the issue has been considered by the Full Bench of this court in Mamuda Khateen v. Beniyan Bibi, . In an appeal filed along with the application under Section 5 of the Limitation Act, in case the application under Section 5 of the Limitation Act is rejected, the appeal is non est. Therefore, there is no question of pendency of an appeal or revisional application unless the delay is condoned. He also drew our attention to the provisions of Section 264 of the Act of 1961, which provides that unless the revisional application is admitted, it cannot be said that the revisional application is pending.
8. Section 88 of the Scheme of 1998 provides that any person who makes the declaration to the designated authority on or before December 31, 1998, which has been extended by one more month, that is, till January 31, 1999, his declaration shall be considered for settlement of tax arrears in accordance with the provisions of the Scheme of 1998. The proviso to Section 95 of the Scheme of 1998 further provides that some cases are not covered under the Scheme, such as if no appeal or reference or writ petition is admitted or the revisional application before the Commissioner is admitted, the declaration under the Scheme of 1998 cannot be considered on the merits.
9. The admitted facts are that the revisional application under Section 264 of the 1961 Act along with the condonation of delay has been filed after six years from the date of the assessment order. Section 264 of the Act of 1961 empowers the Commissioner to revise the order of the Income-tax Officer on the application of the assessee and if the application is beyond limitation he can condone the delay. The proviso to Sub-section (3) of Section 264 reads as under :
"Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period."
10. The Commissioner has rejected the application of the assessee under Section 264 of the Act of 1961 on the ground of delay. The relevant portion of the order of the Commissioner of Income-tax passed under Section 264 of the Act of 1961 reads as under :
"I find that delay in filing the petition is about six years. Under no circumstance, this enormous delay could be the subject-matter of condonation. Even though the assessee and her husband died and though there was an action under Section 132, subsequently the executor had enough time to file a petition under Section 264. In fact, no case has been made out for condoning such delay of about six years."
11. The learned single judge has also confirmed the order of the Commissioner, under the Scheme of 1998 holding that when the revisional application is not pending on the date of the declaration, the declaration cannot be considered under the Scheme of 1998.
12. Learned counsel for the appellant placed reliance on the decision of the apex court in Asgarali Nazarali's case . In paragraphs 21 and 22 (page 509), their Lordships of the apex court observed as under : "We do not accept this contention. It cannot be denied that on July 28, 1952, the date of the commencement of the impugned Act the case of the appellant was pending before the learned Presidency Magistrate. On that day the prosecution had closed its case and the appellant had not yet been called upon to enter upon his defence. The examination of the appellant under Section 342 of the Criminal Procedure Code took place after that date. The appellant filed his written statement on August 14, 1952, and the addresses by the prosecution as well as the defence continued right up to September 26, 1952. The word 'pending' is thus defined in Stroud's Judicial Dictionary, III edition, volume 3, page 2141 :
Pending.--(1) A legal proceeding is 'pending' as soon as commenced and until it is concluded, i.e., so long as the court having original cognizance of it can make an order on the matters in issue, or to be dealt with, therein. Similar are the observations of Jessel, M. R. Clagett's Estate; Ford-ham v. Clagett, In re [1882] 20 Ch. D. 637 at page 653.
'What is the meaning of the word "pending" ?' In my opinion, it includes every insolvency in which any proceeding can by any possibility be taken. That I think is the meaning of the word "pending" .... A cause is said to be pending in a court of justice when any proceeding can be taken in it. That is the test.' There is no doubt therefore that the case of the appellant was not concluded and was pending before the learned Presidency Magistrate at the date of the commencement of the impugned Act."
13. In the case of Asgarali Nazarali, , the facts are that on July 28, 1952, that is, the date of the commencement of the impugned Act, the case was pending before the Presidency Magistrate. Only the case of the prosecution was closed on that date and the accused had not yet been called upon to enter upon his defence. Therefore, in that case, the undisputed fact is that the case was pending. Mere completion of the evidence of the prosecution does not mean that the case was finalised.
14. In Mamuda Khateen, , the issue has been considered by the Full Bench of this court where the facts are akin to the facts of this case. In paragraph 7 (page 416) the Full Bench of this court observed as under :
"It seems to us that when an appeal is barred by limitation and an application is made under Section 5 of the Limitation Act for condonation of the delay along with the memorandum of appeal, until the application under Section 5 is allowed the appeal cannot be filed or admitted at all. In other words, till a favourable order is made on the application under Section 5 the appeal is non est. In that event, the question of rejecting a memorandum of appeal does not arise at all at this stage."
15. Till the application under Section 5 of the Limitation Act has not been allowed, the appeal, revision or for that matter reference shall be taken as non est. The proviso to Section 264 of the Act of 1961 is pari materia to Section 5 of the Limitation Act. When the admitted facts in this case are that the application for condonation which was filed along with the application for revision under Section 264 of the Act of 1961 has been rejected, the revisional application shall be treated as non est and when the revisional application is non est, there cannot be any question of pendency of the revisional application on January 29, 1999, when the declaration under the Scheme of 1998, has been filed by the assessee.
16. In view of those undisputed facts of the case and the case law referred to, we do not find any force in this appeal. Consequently, the appeal as well as the application are dismissed in limine.
17. There shall be no order as to costs.