Income Tax Appellate Tribunal - Gauhati
Income Tax Officer vs Meghalaya Bonded Warehouse on 18 March, 1996
Equivalent citations: [1997]60ITD219(GAU)
ORDER
Shri D. Manmohan J.M.
1. This appeal filed by the revenue is barred by limitation by 766 days. The order of the first appellate authority was communicated to the concerned Commissioner of Income-tax under section 250(7) of the Income-tax Act, 1961, on 19-8-1988. As per section 253(3) of the Act, an appeal should be filed within 60 days of the date on which the order sought to be appealed against is communicated to the Commissioner of Income-tax. According to the registry of the Tribunal the appeal ought to have been filed on or before 18th October, 1988, as the period of 60 days would expire on 18th October, 1988. As the appeal papers were filed in the office of the Tribunal on 26-11- 1990, the appeal was treated as barred by limitation by 766 days and put up before us. The Departmental Representative has filed a petition for condonation of delay which reads as under :
"I like to submit the application for certified copy was made on 1-10-1988 in the above-mentioned case which was within time and the certified copy was noted received. The Assessing Officer filed the second appeal on 13-11-1990 which was sent from Shillong and the same was received by the Office of the Senior Authorised Representative, Gauhati Bench, Gauhati on 21-11- 1990 and therefore, there was a delay for 766 days(s) only and the said delay was due to postal delivery."
The learned Department Representative submitted before us that as per the provision of section 253 of the Act read with rule 9(1) and the Explanation thereto of the income-tax (Appellant Tribunal) Rules, 1963, the time taken for obtaining the 'certified copy of the order of the first appellate authority' has to be excluded for the purpose of computing the limitation in filing an appeal before the Tribunal. He had further submitted that in the instant case the revenue has applied for a certified copy of the order of the first appellate authority on 1-10-1988 but the first appellate authority refused to issue a certified copy, as in his opinion, the certified copy is not required to be filed before the Tribunal. Immediately there after the Assessing Officer has sent the appeal papers to the Senior Authorised Representative, Gauhati Bench, Gauhati on 13-11-1990 which was received by the Senior Authorised Representative on 21-11-1990. Immediately thereafter the appeal was filed. He, thus, submitted that the delay may be condoned and the appeal admitted for hearing on merit.
2. On the other hand, the learned Authorised Representative appearing for the assessee submitted that in view of amended rule 9 of the Income-tax (Appellate Tribunal) Rules, 1963, which was come into effect from 1-8-1987, the obligation of filing a certified copy has been dispensed with and hence the revenue has no justifiable reason to delay the filing of the appeal. It was further submitted that the matter is squarely covered by the decision of the jurisdictional High Court in the case of State of Assam v. Anil Chandra Das [1990] 1 G.L.R. He has further submitted that the decision of the Hon'ble Gauhati High Court is binding on the Tribunal and hence the Tribunal is duty bound to follow the same. Though a formal mention was made that the question of limitation has already been considered by this Bench of the Tribunal on an earlier occasion, on being asked to supply a copy of the same he has turned around and submitted that sans the order of the Tribunal, the instant case can be decided, inasmuch as, the issue is squarely covered by the decision of the jurisdictional High Court cited supra.
3. We have heard the rival submissions and also perused the records. The learned Authorised Representative appearing for the assessee has merely relied upon the decision of the Hon'ble Gauhati High Court and could not supply the alleged orders of this Tribunal on this issue. We have, therefore, no other course open except to decide the matter on a plain interpretation of the relevant provisions of the statutes and the rules and also in the light of the decision of the Hon'ble Gauhati High Court cited supra and the other reported decisions to the best of our knowledge.
4. Before we go the provisions of section 253(3), 253(5) and 268 of the Income-tax Act, 1961 and also rule 9 and the Explanation thereto of the Income-tax (Appellate Tribunal) Rules, 1963, we find it necessary to consider the genesis of the provisions so as to understand the read import of the aforesaid provisions. Prior to introduction of section 67A in 1930 under the Income-tax Act, 1922, the analogous provisions of the Limitation Act were held to apply under the said Act. Under the Income-tax Act, 1922, section 67A was introduced which reads as under :
"In computing the period of limitation prescribed for an appeal under this Act or for an application under section 66, the day on which the order complained of was made and the time requisite for obtaining a copy of such order shall be excluded."
Section 33(3) of the Income-tax Act, 1922, empowered the parties to file an appeal to the Appellant Tribunal Rule 10(1) of the Appellant Tribunal Rules, 1946, prescribes that every memorandum of appeal shall accompany at least one copy which shall be certified copy of the order appealed against. In the case of Rasipuram Union Motor Service Ltd. v. CIT (1956) 30 ITR 687, the Hon'ble Madras High Court had an occasion to consider the question of limitation in presenting the appeal before the Tribunal. In an exhaustive judgment, their Lordships have held that under section 67A of the Income-tax Act, 1922, read with section 76 of the Evidence Act, the time taken for obtaining a certified copy should be excluded in computing the period of limitation prescribed by section 33 of the Income-tax Act, 1922. The Hon'ble Allahabad High Court also had an occasion to consider this matter in the case of CIT v. Babu Ram Chandra Bhan [1969] 74 ITR 143 wherein their Lordships have held as under :
"The language of section 67A of the Act is plain. It is expressly mentioned in the section that the period spent in obtaining a copy of the impugned order shall be excluded. Such exclusion is not subject to any condition that it should be obligatory to file a copy of the impugned order with the memorandum of appeal. The Tribunal in the instant case was, therefore, justified in excluding the time taken by Mahabir Prasad in obtaining a copy of the assessment order. After excluding such period, his appeal was within limitation."
The aforesaid two decisions decided on consideration of the provisions of the Income-tax Act, 1922. Subsequently the Hon'ble Calcutta High Court had considered provisions of section 250(7), 253(3), 253(4) of the Income-tax Act, 1961, in the case of Hind Development Corpn. v. ITO [1979] 118 ITR 873 and at pages 876 - 877, their Lordships held as under :
"Even assuming that the appeal was time barred, we may consider whether the Tribunal was justified in condoning the delay when there was no prayer for such condonation. The relevant provision in that regard is contained in section 253(5) of the Income-tax Act, 1961, which provides that the Appellate Tribunal may admit the appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. Sub-section (5), therefore, confers a jurisdiction on the Appellate Tribunal to condone the delay in filing the appeal beyond the period of limitation, provided it is satisfied that there was sufficient cases for the same. The question is whether the Tribunal can, out of its own, condone the delay on finding that there is sufficient cause for not presenting the appeal within the period of limitation. Normally it is the duty of the appellant to make out a sufficient cause for condonation of delay. But so far as the provision of sub-section (5) is concerned, it authorises the Tribunal to condone the delay if there is sufficient cause. The only condition that is to be fulfilled is that the Tribunal must be satisfied about the existence of sufficient cases for not presenting the appeal within the period of limitation. In our view, therefore, if the materials on record show that there was sufficient cause for the delay in filing the memorandum of appeal and if the Tribunal is satisfied about the same, the Tribunal an condone the delay."
Now, let us consider the decision of the Hon'ble Gauhati High Court reported in Anil Chandra Das's case (supra). In the aforesaid case, the impugned was delivered on 15-9-1988 and the certified copy was received by the appellant on 3-12-1988. It was stated in the judgment that the last date for filing the appeal was 9-2-1989 but the appeal was filed on 27-6-1989, resulting in a delay of 129 days, presumably reckoning from 9-2-1989. The question as to whether time taken for obtaining a certified copy has to be excluded or not, was not the subject-matter of dispute before his Lordships. In fact, the delay of 129 days was relatable to a period after the receipt of certified copy of impugned judgment. While contesting the matter the learned counsel for the respondent has expressed a concession by submitting that at best the delay for 17 days relatable to a period when the matter was pending with the Advocate due to heavy rains and landslide in Gauhati can be considered as due to sufficient cause but not the rest of 112 days. The explanation in the aforesaid case was that the Officer concerned did not or could not take up the time and in Government working the delay is inevitable and hence the Court should take judicial notice of such state of affairs and treat the same as sufficient cause for condoning the delay. In other words, the explanation of the Officer is that the delay was due to forwarding of the papers from one desk to other within the Government machinery and the same constituted a reasonable cause. Under such facts and circumstances the Hon'ble Gauhati High Court held that the explanation given by the Government is not satisfactory and hence the delay cannot be condoned under section 5 of the Limitation Act. While dealing with the matter the Hon'ble Court has observed as under :
"What is, therefore, necessary is to consider whether there was any gross negligence, deliberate inaction or lack of bona fide on the part of the appellant. If that be so, the delay should not be condoned. On the other hand, if sufficient cause is shown, the Court should exercise its discretion and condone the delay. Proof of 'sufficient cause' therefore, is a condition precedent for exercise of the discretionary power of the Court to condone the delay. No hard and fast rule can be laid down for determining what constitutes 'sufficient cause'. That would depend on the facts and circumstances of each case which should be considered by the Court in the proper perspective with the object of furthering substantial justice."
His Lordship further observed that routine show working of the Government Departments cannot ; in any view of the matter, be considered to be good ground to justify condonation of delay as the Court cannot put its seal of approval on the negligence, inaction or laches on the part of the Officers of the Government by treating it as "sufficient cause" for delay.
5. In the backdrop of this judicial precedent let us consider the facts and circumstances of the present case. From a reading of the aforesaid judgments and on consideration of the facts and circumstances of the appeal before us, we find that the delay in presenting the appeal is due to sufficient cause. The provisions of section 33(3), section 67A of the Income-tax Act, 1922 are analogus to the provision of section 253(3) and 268 of the Income-tax Act, 1961. While interpreting the provisions of section 67A of the Income-tax Act, 1922, the Hon'ble Allahabad High Court held that the period spent for obtaining the copy of the impugned order shall be excluded in computing the limitation and such exclusion is not subject to any condition that it should be obligatory to file a copy of the impugned order with the memorandum of appeal. As this section has been transformed into section 268 of the Income-tax Act, 1961, we are of the opinion that the time taken for obtaining the certified copy of the impugned order shall be excluded while computing the period of limitation under section 253(3) of the Income-tax Act, 1961. Rule 9 of the Income-tax (Appellate Tribunal) Rules, 1963, was drafted in exercise of the power conferred under section 255(5) of the Income-tax Act, 1961. The rules cannot be equated to the statutory enactment and rules cannot override the provisions of the Income-tax Act. Even after the insertion of Explanation to rule 9(1), under section 268 of the Act, the parties have a right to file an appeal after obtaining a certified copy of the impugned order and the time taken for obtaining such copy can always be excluded in view of the decision of the Hon'ble Allahabad High Court cited supra. In the instant case, the appeal was filed before a certified copy of the order appealed against was issued by the first appellate authority and hence, in our opinion, the appeal is well with the period of limitation.
6. Even presuming for a moment that the time taken for obtaining a certified copy cannot be excluded in the instant case in view of the fact that the impugned order has not yet been received, the matter can still be considered under section 253(5) of the Income-tax Act, 1961. The Appellate Tribunal has the power to condone the delay under section 253(5) of the Act if there is sufficient cause to the satisfaction of the Bench. Admittedly, in the present case, the Assessing Officer has applied for a certified copy before the expiry of 60 days from the date of communication of the order of the first appellate authority. It is also not in dispute that the Assessing Officer(the appellant herein) has not received the impugned order till date. The learned Departmental Representative contended that the first appellate authority has refused to supply a 'certified copy,' as in his opinion, there is no necessity for the certified copy. It is not in the hands of the appellant to obtain the certified copy and hence the delay in issuance/non-issuance of the certified copy cannot be attributable to the negligence on the part of the appellant herein. From the facts and arguments we could gather that the appellant was under the bona fide impression that he is entitled to file an appeal after receipt of the certified copy and the time taken for obtaining a certified copy shall be excluded from computation of the limitation. In fact, before the insertion of Explanation to rule 9 of the Income-tax (Appellate Tribunal) Rules, the time taken for obtaining a certified copy was excluded for computation of limitation. The dispute arose only because of insertion of Explanation in 1987. In the case of Hon'ble Gauhati High Court cited supra, it was observed that there is no hard and fast rule for determining as to what constitutes sufficient cause and that would depend on circumstances of each case which should be considered by the Court with the object of furthering substantial justice. In the facts and circumstances of the case, we are of the opinion that the delay in filing of appeal was due to bona fide belief as mentioned hereinabove and soon after releasing that the first appellate authority has refused to supply a certified copy, the appeal papers were promptly filed in the registry of the Tribunal and so it cannot be attributable to negligence on the part of the appellant. We, therefore, hold that the delay is due to sufficient cause. The learned Authorised Representative appearing for the assessee has strongly relied upon the decision of the jurisdiction High Court. Upon a careful reading of the aforesaid judgment, we fail to understand as to how it helps the assessee in the present case. In fact, far from supporting the stand of the assessee, it supports the case of the Revenue, inasmuch as the Hon'ble Court held that in deciding the issue as to what constitutes sufficient cause, the matter has to be looked into with the object of furthering substantial justice.
7. It is of course, the contention of the learned Authorised Representative appearing for the assessee that in view of the Explanation to rule 9 the revenue ought not have waited till the receipt of the certified copy of the first appellant authority and at any rate, since the copy was not submitted along with the memorandum of appeal, the time taken for obtaining a certified copy should not be excluded. As we have already mentioned hereinabove, the decision of the Hon'ble Allahabad High Court cited supra is direct answer on this point. Even if the appellant has not filed 'certified copy' still he is entitled to claim shelter under section 268 of the Act.
8. The whole facts and circumstances of the case clearly indicate that the delay was due to bona fide impression that the certified copy has to be filed along with the memorandum of appeal and due to ignorance/improper appreciation of the correct import of the Explanation to rule 9 of the Income-tax (Appellate Tribunal) Rules, 1963. Merely because the appellant is innocent/ignorant of the correct impact of the newly inserted provisions, he cannot be punished in the form of dismissal of appeal filed by him as being barred by limitation. As has been explained by the Hon'ble jurisdiction High Court the matter has to be looked into from the perspective of rendering substantial justice. The Hon'ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 118 ITR 326 at page 339 held as under :
"Moreover, it must be remembered that there is no presumption that every person knows the law. It is often said that every one is presumed to know the law, but that is not a correct statement : there is no such maxim known to the law. Over a hundred and thirty years ago, Maula, J. pointed out in Martindale v. Falkner [1846] 2 CB 706 : "There is no presumption in this country that every person knows the Law : it would be contrary to common sense and reason if it were so.' Scrutton, L.J. also once said : 'It is impossible to know all the statutory law, and not very possible to know all the common law".
In the case of Kaushal Diwan v. ITO [1983] 3 ITD 432 (Delhi) (TM) at page 435, the Accountant Member in his order observed as follows :-
"The Income-tax Act is a highly complicated enactment and there would hardly be a person in the country who would be knowing all the provision of the Act. Even the Chairman of the Central Board of Direct Taxes had occasion to say, in the recent past, while appearing before a Commission of Enquiry, that he was not aware of the entire provision contained in the Act. This was the position obtaining in respect of the tax specialists. The assessee, however, could not be treated as a specialist. Even I, I must state, was not aware of the provision in question till this matter came before the Bench. The Courts have been now holding that ignorance of a particular law can be a reasonable excuse and it must be so held when it was matter of tax law and its provision were highly complicated."
From the aforesaid decisions it can be gathered that ignorance of law particularly under the Income-tax Act which is highly complicated enactment should not be viewed seriously and hence the delay in the instant case which was caused due to improper appreciation of the legal provisions, can be held as a sufficient reason for the delay in filing the appeals. The delay between 13-11-1990 to 26-11-1990 can be attributable to the postal delay. Thus, on an overall consideration of the matter, we are satisfied that the delay in filing the appeal, if any, deserves to be condoned. We therefore, direct the registry to fix the appeal for final hearing on merit, in regular course.