Orissa High Court
Commissioner Of Income-Tax vs Kalipada Ghose on 22 September, 1986
Author: D.P. Mohapatra
Bench: D.P. Mohapatra
JUDGMENT D.P. Mohapatra, J.
1. On the applications filed by the Revenue under Section 256(2) of the Income-tax Act, 1961, this court directed the Income-tax Appellate Tribunal to state a case and refer the following question for opinion of the court:
" Whether, on the facts and in the circumstances of the case, where the Appellate Assistant Commissioner had dismissed the appeal for non-compliance of Section 249(4) of the Act, his order amounted to one within the ambit of Section 250 of the Act so as to be subjected to second appeal before the Tribunal under Section 253 of the Act ? "
2. Accordingly, the aforesaid question of law has been referred by the Tribunal for the opinion of this court. The gist of the relevant facts may be stated as follows:
The assessee, Kalipada Ghose, was the proprietor of New Ganguram Sweets at Bhubaneswar. The assessment years involved are 1974-75 and 1975-76. The Income-tax Officer determined the total income of the asses-see at Rs. 17,500 and Rs. 30,000, respectively, for these years. The assessee filed appeals on October 29, 1975. The Appellate Assistant Commissioner considering the Taxation Laws (Amendment) Act, 1975, under which a new provision in Section 249 was introduced with effect from October 1, 1975, to the effect that no appeal shall be admitted unless at the time of filing of the appeal, the admitted tax on the returned income has been paid, found that the assessee having not paid the admitted tax for the years in question, the appeals were incompetent and accordingly rejected the same in limine. The assessee, being aggrieved by the order, appealed to the Tribunal. The Tribunal on a consideration of the provisions under Section 249(4) of the Act, the fact that the assessee deposited the admitted tax subse-
quently on June 15, 1976, and also the fact that the provision was a new one, not well-known to all concerned, directed the Appellate Assistant Commissioner to accept the reason given by the assessee for non-payment of the admitted tax before the filing of the appeal and to admit the appeal for being disposed of on merits. The correctness and validity of this order is in question.
3. It was urged before this court on behalf of the Revenue that the appeals to the Tribunal have been provided under Section 253 of the Act against the decision made under Section 250 of the Act. Since, in the present case, the appeals were dismissed in limine for non-compliance of Section 249(4) of the Act, the decision of the first appellate authority was not one under Section 250 of the Act and, therefore, the said order was not appealable under Section 253. On the aforesaid contention, this court directed a reference on the point noticed earlier.
4. Section 253, inter alia, provides that any assessee aggrieved by an order passed by an Appellate Assistant Commissioner or, as the case may be, a Commissioner (Appeals) under Sub-section (2) of Section 131, Section 154, Section 250 or Section 271, Section 271A or Section 272A may appeal to the Appellate Tribunal against such order.
5. Section 249 deals with form of appeal and limitation. Sub-section (4) thereof provides that "No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,--
(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or
(b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him:
Provided that, on an application made by the appellant in this behalf, the Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provision of this sub-section."
6. Under Section 250 of the Act, the procedure to be followed in appeal is laid down. Under Sub-section (1) of the said section, the Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals) shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the Income-tax Officer against whose order the appeal is preferred. The other provisions under the said section vest power in the appellate authority to make further enquiry, where necessary, to take necessary steps for disposal of the appeal and to communicate the final order as passed by it to the assessee.
7. From the aforesaid provisions, it is clear that the scheme of the Act is that after an appeal is presented under Section 249 of the Act, it is to be disposed of under Section 250. Therefore, any order by which the appeal stands disposed of comes within the purview of Section 250.
8. Section' 249(4) lays down the condition that unless the admitted tax in a case where a return has been filed by the assessee, or advance tax in a case where no return has been filed is deposited by the assessee, the appeal shall not be admitted. Under the proviso to the said sub-section, power to exempt the assessee from making the deposit is vested in the appellate authority. Therefore, the assessee could comply with the requirements of Section 249(4) of the Act either by making the deposit in question or by obtaining an order of exemption. An order rejecting the appeal in limine for non-compliance with the provisions of Section 249(4) for not depositing the requisite amount, disposes of the appeal presented before the appellate authority. Such an order, therefore, comes within the purview of Section 250 of the Act and is appealable to the Tribunal under Section 253 of the Act. If this interpretation is not accepted, it will lead to a situation that the assessee would be left with no remedy if his appeal is rejected by the appellate authority for non-compliance with the provisions of Section 249(4) of the Act. The aforesaid view gains support from the decision of the Supreme Court in the case of Mela Ram and Sons v. CIT [1956] 29 ITR 607, wherein it was held that an order by the Appellate Assistant Commissioner that there was no sufficient reason for excusing delay under Section 30(2) of the Income-tax Act and rejecting the appeal as time-barred is an order passed under Section 31 and an appeal lies from that order to the Appellate Tribunal. The court further observed that it makes no difference whether the order of dismissal is made before or after the appeal is admitted. An appeal presented out of time is an appeal and an order dismissing it as time-barred is one passed in appeal.
9. On the aforesaid analysis, it has to be held that the order of the Appellate Assistant Commissioner dismissing the appeals for non-compliance with Section 249(4) of the Act came within the ambit of Section 250 of the Act and was appealable before the Tribunal under Section 253 of the Act. The Tribunal, therefore, committed no illegality in entertaining the appeals and in condoning the delay on being satisfied, on the facts and circumstances of the case, that there was sufficient cause for the assessee's failure to comply with Section 249(4) of the Act and in remitting the cases to the first appellate forum for disposal on merits. Accordingly, the question referred is answered in the affirmative.
K.P. Mohapatra, J.
10. I agree.