Gauhati High Court
Assistant Commissioner Of Income Tax vs Noorbari Tea Co. (P) Ltd. on 25 November, 1991
Equivalent citations: (1993)45TTJ(GAU)92
ORDER
EGBERT SINGH, A. M. :
The appeal is by the Revenue and it is marked as time barred by 612 days. It is stated by the learned Departmental Representative that in fact there was no delay in filing the case as within the limitation period application for certified copy of the order appealed against, was made on 17th March, 1989. But so far the learned CIT(A) was not furnished copy of such order. The appeal was filed on 23rd Nov., 1990. It is submitted, therefore, that the appeal memorandum filed by the Revenue enclosing copy of the order appealed against, as attested to be true copy by the Assessing Officer, was made as certified copy has not been received and in fact time is still available for filing the appeal till such certified copy would be received. It is submitted, therefore, that the appeal may be admitted and disposed of on merits.
2. On the other hand, the learned counsel for the assessee resists the submission made on behalf of the Revenue. It is stated that the limitation matter will have to be considered properly. It is also submitted that the Revenue claimed to have filed application for certified copy but nothing has been shown during the said period of 612 days, as to what steps have been taken by them for obtaining certified copy. It is urged that the Department had violated the ITAT Rules particularly r. 9 read with the Explanation. In course of his argument, the assessees learned counsel mentioned a decision of the Honble High Court in the case, as reported in 1990 GLR 183 at para 7 and it is submitted by him that the appeal cannot be admitted as the delay was due to gross negligence and deliberate inaction on the part of the Department and there was no bona fide reasons for such a delay. It is vehemently urged that since the first appellate authority has given a decision, either parties got relief or advantage and if no appeal against that decision is preferred, then the opposite party had acquired a vested right. It is urged that the Department did not allow such order of the first appellate authority to become final even after a lapse of 612 days, by filling this appeal out of time. It is submitted that there should be finality of such litigation. It is urged at length that if the Explanation to r. 9 of the ITAT Rules is taken into consideration, it could be seen that the appellant-Revenue could have filed the present appeal in the present form within the specific time, particularly when the said Explanation was brought into the statue some time in 1987 itself. It is urged by him that in such a situation, the appeal by the Revenue on this ground alone may be dismissed as time barred now.
3. The learned Departmental Representative reiterates the submissions made earlier and it is urged that there was no negligence nor deliberate inaction of any kind on the part of the Department in not getting certified copy of the order appealed against from the learned CIT(A). It is urged that the Assessing Officer has taken all the steps within his control to obtain the certified copy and when the same was not likely to be supplied, appeal memorandum was filed enclosing attested copy only of the order and as such since there was no lapse on the part of the Revenue and in fact the time is still very much there for filling the appeal, there is no question of limitation involved in the case.
4. I have looked into the various aspects of the matter as contended and argued by both the sides. At the outset, it may be stated that right of appeal is creation of statute and that right of appeal is the substantive right. For this proposition reference may be made to the decision of the Honbel Supreme Court in the case of Mela Ram & Sons vs. CIT (1956) 29 ITR 607 (SC). Sec. 268 of the IT Act provided for exclusion of time required for obtaining a certified copy, for the purpose of ascertaining period of limitation, in the matter of filing appeal. In the instant case, the Revenue-appellant applied for certified copy of such order and it appears that the Revenue had not been supplied with he certified copy of the order of the appellate authority. Thus, it can be said that the appellant concerned should have filed the appeal within the limitation period. In this connection, it would be helpful to refer to a decision of our own High Court at Guwahati in the case of Sardar Mal Khumchand vs. CIT as reported in (1963) 49 ITR 961 (Assam) in which on the facts of the case it was held that in computing the period of limitation for reference under S. 66(1) of the IT Act, 1922, the assessee concerned was entitled to have the time taken for obtaining certified copy, excluded, even though copy is not required to be filed along with application and even if the copy had been supplied to the assessee earlier. In the present case, the learned CIT(A) apparently had earlier supplied copy of his order which is presently appealed against. But since the Revenue had applied for certified copy for the purpose of S. 268 r/w time required for obtaining certified copy would have to be considered and not ignored.
5. Rule 9 of the ITAT Rules, provided that a memorandum of appeal shall be in triplicate and shall be accompanied by two copies of appeals one of which shall be a certified copy of the order appealed against, amongst other things. Obviously, the appellant-Revenue have to file copies of such order of the learned CIT(A) in two copies, one of which should be certified copy. It was for the purpose that the Revenue had applied for certified copy of the order appealed against. Of course, w.e.f. 1st Aug., 1987, Explanation has been added wherein it has been provided that for the purpose of this Rule, certified copy will include copy which was originally supplied to the appellant as well as photostat copy duly authenticated by the appellant concerned. The case of the assessee is that since the Revenue-appellant had filed appeal memorandum enclosing a photostat copy as attested by the ITO along with memorandum of appeal in pursuance of the Explanation to r. 9 and the same had been made out of time, the appeal by the Revenue merits to be dismissed in limine. In my opinion, the contention made on behalf of the assessee is devoid of force. As could be seen, the Explanation is only an enabling provision, so that appeal memorandum may be filed in pursuance of r. 9(1) as early as possible. The purpose of this Rule is quite clear and by inserting the above Explanation, the right of the appellant concerned to obtain certified copy to be filed along with memorandum of appeal, cannot be taken away. In fact, the above Explanation is to facilitate filing of appeal by such appellant concerned before the Appellant Tribunal and not to frustrate the procedure of justice. It cannot be said that if any appellant has filed memorandum accompanied by an attested copy such appellant has given up or waived the right to receive certified copy applied for and in my opinion such right cannot be infringed nor abridged as stated earlier. The above Explanation is obviously to facilitate filing of appeal by the aggrieved party so that the Appellate Tribunal can administer justice in accordance with the law without being bogged down by mere technical procedure or form of procedure, or otherwise the very purpose of administration of justice would be defeated on such grounds.
6. By the fact that the Department had filed the appeal before the Tribunal enclosing the said attested copy (not certified copy) it cannot be said to have waived the right to receive certified copy of the order applied for, so that second appeal before the Tribunal could be filed. As indicated earlier, the time required for obtaining certified copy of the order appealed against would have to be considered in view of requirements of S. 268. We do not agree with the contention that the Revenue have waived the right to receive certified copy of such order appealed against. Waiver would have to be pleaded and provided by the party concerned. In the case of Motilal Padampat Sugar Mills Co. Ltd. vs. State of U. P. (1979) 118 ITR 326 (SC), the Honble Supreme Court on the facts of that case observed that it is elementary that waiver is a question of fact and it must be properly pleaded and proved and no pleas of waiver can be allowed to be raised unless it is pleaded and the factual foundation for it is laid in the pleadings. It was also observed that there can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it. In the present case before us, we did not find any material to say that the Department has abandoned the right to receive the certified copy from the learned CIT(A), as applied for by it earlier.
7. In course of his arguments, the assessees learned counsel has also submitted that the Department though did apply for certified copy, but it preferred to commit gross negligence and due to the lapse and inaction of the Department, the learned CIT(A) has not been able to supply the certified copy, particularly when both the appellant-ITO and the CIT(A) are under the same Department. It is normally expected that a party which alleges the existence of a particular thing, would have to place such material to substantiate such claim or assertion as otherwise such assertion remains assertion and it cannot take the place of evidence. In fact, the Tribunal should not be so influenced by the form or mode of appeal, but should consider the substance of the appeal, so that justice could be dispensed with to both the sides.
8. Before the introduction of the said Explanation to r. 9, there might have been avoidable delay in filing of memorandum of appeal as there was delay in obtaining certified copy of the order appealed against by the party concerned. But for the introduction of the said Explanation, appeal could be filed only when the appellant concerned obtained certified copy of the order appealed against which could be seen in the present circumstances will take not only weeks but months by the learned CIT(A) to supply such certified copies of the orders. In other words, appeal could not be filed till then and justice if any will have to be delayed till the learned CIT(A) supply certified copies. But justice delayed is justice denied. As stated above, the Explanation is to facilitate and not to frustrate the procedural machinery for disposal of justice. It is obvious that to overcome such defect or mischief which the law has not provided, the above Explanation was brought in to remedy the situation. Thus by applying the remedy in the light suggested on behalf of the assessee, the appellant concerned would be out of Court. Such could not have been intention of the law. In fact, the above explanation simply liberalised the concept or the definition of the word "certified copy" to include also attested copy as such, and the said Explanation did not exclude certified copy. We have to read the Rules and the provision harmoniously in order to avoid any mischief or absurdity. In fact, the Honble Supreme Court in the case of Sevantilal Maneklal Sheth vs. CIT (1968) 68 ITR 503 (SC), on the facts of the case, has expressed the view that the rule of interpretation should be to prevent the mischief and to advance the remedy according to the true intention of the makers of the statute. In fact, we should avoid a construction which would render the provision of the Act or Rule nugatory and thereby defeat objects of the provisions. In the case of CWT vs. Yuvraj Amrinder Singh (1985) 156 ITR 525 (SC), the Honble Supreme Court on the facts of the case held that when harmonious construction is possible which further the object of the Act, the same may be preferred to construction which leads to conflicting results.
9. We are here concerned with r. 9 which is a machinery or procedural provision. It is sound rule of interpretation that in respect of machinery provision a construction which makes machinery workable should be preferred. In the case of CIT vs. National Taj Traders (1980) 121 ITR 535 (SC) the Honble Supreme Court observed that it was settled principle that a fiscal statute should be construed strictly is applicable only to tax provision and not to those parts of the statute which constitute machinery provisions.
10. Thus, having regard to the rival contentions of both the sides vis-a-vis the requirement of the above Rule and other provisions of the Act, I am of the clear opinion that on the facts of this case before me the appeal preferred by the Revenue was not beyond time keeping in view, amongst other things, the rulings of the Honble Supreme Court as well as the ruling enunciated in the case of Sardarmal Khumchand (supra).
11. The appeal by the Revenue is admitted for hearing. I shall now deal with the merits of the case. The contention of the Revenue is that the learned CIT(A) erred in deleting Rs. 69,167 disallowed by the Assessing Officer, treating the same capital expenditure and it is also appealed by the Revenue that the learned Dy. CIT(A) erred in holding that the expenditure was revenue falling under r. 8(2) of the IT Rules.
12. I have heared both the sides at length and gone through the orders of the authorities below. In the assessment order, the above amount was added back with the narration "a gap filling for conversion of land considered capital investment". There was no further discussion on the point. The assessee took up the matter before the learned Dy. CIT(A) that the assessee had spent the same for replanting diseased and non-yielding plants in a planted area of 200 acres of land. The assessee stressed that expenditure was for in filling of tea plant in place of those obsolete tea plant and the same was revenue expenditure within the above Rule. The learned Dy. CIT(A) agreed with the assessee on the facts of the case and deleted the addition. According to the Revenue, the expenditure was simply capital in nature and the Assessing Officer has noted that the assessee has converted the said land and the assessee had also planted new tea plant which will be the asset of the assessee for at least 50 years and that would constitute an asset of the assessee which would bring enduring benefits for several years. It is submitted that the expenditure was capital and the learned Dy. CIT(A) made a mistake in deleting the same. The learned counsel for the assessee, on the other hand, resists the submission made on behalf of the Revenue. In fact, the submissions made before the learned Dy. CIT(A) are reiterated before us also.
13. I have looked into the various facts available before me and it is seen that expenditure was for gap filling that is for planting of new tea crop in gap place of diseased tea or useless old bush in the area planted by the assessee. In such filling, expenses cannot be considered to be capital though it may have brought enduring benefit to the assessee. In fact, the planting is only replacement of such original but defective or diseased plant. In view of this matter, the order of the learned Dy. CIT(A) required no interference from the Appellate Tribunal. In the result, the appeal by the Revenue is dismissed on merits, but defective or diseased plant.
In view of this matter, the order of the learned Dy. CIT(A) required no interference from the Appellate Tribunal.
In the result, the appeal by the Revenue is dismissed on merits.