Madhya Pradesh High Court
Shree Amarlal Kirana Stores vs Commissioner Of Income-Tax And Ors. on 13 November, 2002
Equivalent citations: (2003)180CTR(MP)355, [2003]259ITR572(MP)
Author: A.M. Sapre
Bench: A.M. Sapre
JUDGMENT A.M. Sapre, J.
1. By filing this writ under Articles 226 and 227 of the Constitution of India, the petitioner seeks to challenge the order, dated February 26, 1999 (annexure P-8), and reiterated by way of intimation by a subsequent order, dated December 7, 2001 (annexure P-26), passed by the Commissioner of Income-tax (intimated on his behalf by the Deputy Commissioner of Income-tax/Assistant Commissioner of Income-tax) to the petitioner. In order to appreciate the controversy involved in the writ, which lies in a narrow compass, a few relevant facts need mention.
2. The petitioner is an assessee, as defined under Section 2(7) of the Income-tax Act," 1961, so too a "person" as defined under Section 87(k) of the Kar Vivad Samadhan Scheme, 1998, as introduced by the Finance (No. 2) Act, 1998. For the assessment year 1992-93, the petitioner filed its return on March 28, 1995. The Assessing Officer by order dated March 28, 1995, made an assessment and determined the tax liability as also imposed penalty payable by the petitioner for the year 1992-93. The petitioner was not satisfied with the additional tax liability as also the penalty imposed, and hence, filed an appeal under Section 249 of the Income-tax Act to the Commissioner (Appeals). This appeal came to be dismissed by order dated November 30, 1995, resulting in upholding of the assessment order in its entirety passed by the Assessing Officer. The petitioner then not being satisfied with the order of the Commissioner of Income-tax (Appeals) filed further second appeal under Section 253 ibid to the Appellate Tribunal on December 26, 1998, i.e., almost after three years of passing of an order by the Commissioner of Income-tax (Appeals). By that time, naturally it had become barred by limitation.
3. On September 1, 1998, a Scheme called the Kar Vivad Samadhan Scheme, 1998 (hereinafter for brevity called "the Scheme"), was brought into force by the Finance (No. 2) Act, 1998. In terms of the scheme, the assessee was entitled to get the benefit in payment of tax and penalty provided they fulfilled certain conditions stipulated in the scheme. The petitioner claiming itself to be an eligible assessee and satisfying the conditions of eligibility for claiming benefits of the Scheme submitted a declaration in the prescribed Form No. 1A on December 31, 1998, to the prescribed authority (Commissioner of Income-tax). This declaration was submitted for taking benefit of the tax/penalty liability in relation to the assessment year 1992-93 referred to supra, which was imposed by the Assessing Officer and upheld in appeal by the Commissioner of Income-tax (Appeals). It is this declaration which was rejected by the Commissioner of Income-tax (respondent No. 1) by passing an impugned order dated February 26, 1999 (annexure P-8), and again reiterated by order dated December 7, 2001 (annexure D-26). It was rejected essentially on the ground that since no appeal/revision was pending in relation to the disputed amount for which the benefit of the scheme was sought on the date when the declaration was submitted, i.e., on December 31, 1998, the petitioner was not entitled to claim any benefit under the Scheme. This is what was conveyed to the petitioner by the impugned order :
"This is in reference to your declaration filed under the KVSS-98 on December 31, 1998. As there is no appeal/revision pending, you are not eligible for relief in terms of the Kar Vivad Samadhan Scheme, 1998, and therefore the declaration is filed."
4. To complete the facts, the second appeal filed by the petitioner to the Appellate Tribunal being barred by limitation the petitioner had applied for condonation of delay in filing the appeal. It is this application which was allowed by the Appellate Tribunal by order, dated February 11, 2000 (annexure P-11). As a consequence, the delay in filing the appeal was condoned. As stated supra, the petitioner having felt aggrieved by an order, dated December 7, 2001 (annexure P-26), by which its declaration was rejected has filed this writ. Notice of the petition was issued to the respondents. They were served and filed their return justifying the passing of the impugned order and the reasons contained in support thereof.
5. Heard Shri G. M. Chafekar, learned senior counsel with Shri Sarda for the petitioner, and Shri A. P. Patankar, learned counsel for the respondents.
6. Shri Chafekar, learned senior counsel, while assailing the legality and propriety of the impugned orders, dated February 26, 1999, and December 7, 2001, which resulted in rejection of the declaration filed by the petitioner under the Scheme in the first place contended that the reasoning that led to rejection of the petitioner's declaration by respondent No. 1 itself was factually and/or legally faulty. In the second place, learned counsel contended that it cannot be disputed as a fact that on the date (December 31, 1998) when the petitioner filed a declaration under the Scheme, the appeal filed by the petitioner on December 26, 1998, was pending before the Tribunal thereby entitling the petitioner to take benefit of the scheme. In the third place, learned counsel contended that even assuming that the appeal was barred by time on the date of its filing, the delay having been actually condoned by the Tribunal by order dated January 25, 1999 (though subsequent to filing of declaration), the same shall relate back to the date of filing of the appeal treating the appeal to have been filed in time entitling the petitioner to claim benefit of the Scheme. In the fourth place, learned counsel contended that in order to see whether the declaration is in accordance with the requirement of the Scheme or not, what is required to be seen is, whether any appeal, reference or writ is pending before the appellate authority or the High Court or the Supreme Court in respect of disputed amount for which the benefit is claimed in the declaration and once the assessee is able to show that an appeal/reference/writ as the case may be is pending as a fact then in such event, the declaration submitted by the assessee has to be accepted by the competent authority. Learned counsel placed reliance on Raja Kulkarni v. State of Bombay, AIR 1954 SC 73. It is these submissions which learned counsel elaborated by citing the provisions of the Income-tax Act, scheme and the rules. In reply, learned counsel for the respondent supported the impugned order and the reasoning contained in it and prayed for its upholding.
7. Having heard learned counsel for the parties and having perused the record of the case, I find no merit in the writ and hence, the petition deserves dismissal resulting in upholding of the impugned order.
8. The question that really falls for consideration in this petition is what is the true interpretation of Section 95(i)(c) of the Scheme ? In other words, the fate of the petition depends upon the true interpretation of Section 95(i)(c) of the Scheme.
9. Section 95 of the Scheme provides that the scheme shall not apply to certain categories of cases specified in its sub-clauses. So far as this case is concerned, it falls in Sub-clause (c) of Section 95(i). It reads as under :
"95. Scheme not to apply in certain cases.--The provisions of this Scheme shall not apply-
(i) in respect of tax arrear under any direct tax enactment,--. . .
(c) to a case where no appeal or reference or writ petition is admitted and pending before any appellate authority or the High Court or the Supreme Court on the date of filing of declaration or no application for revision is pending before the Commissioner on the date of filing declaration."
10. A perusal of the aforequoted clause would show that the Scheme in question is not made applicable to a case where no appeal or reference, or writ petition is "admitted" and "pending" before the appellate authority or the High Court or the Supreme Court on the date of filing of the declaration or no application for revision is "pending" before the Commissioner on the date of filing the declaration. In other words, in order to take benefit of the Scheme, it is necessary for the assessee to show as a fact that on the date of filing the declaration under the Scheme an appeal, or reference, or writ was "admitted" for final hearing and was "pending" before any appellate authority, or the High Court, or the Supreme Court as the case may be. It is only then that the assessee becomes entitled to invoke the provisions of the Scheme and apply by submitting the declaration for taking its benefit. The question, therefore, that arises for consideration is, what is the meaning of the words "is admitted and pending" used in Section 95(i)(c) ibid ? and, secondly, whether in the facts of this case any appeal was pending before the Tribunal so as to enable the petitioner to take benefit of the Scheme ?
10. The submission of learned counsel for the petitioner was that the petitioner in fact having filed an appeal before the Appellate Tribunal on December 26, 1998, and thereafter submitted a declaration pursuant to the Scheme on December 31, 1998, had become entitled to take benefit of the Scheme. Learned counsel urged that this being an admitted position, it ought to have been held that the appeal, was in fact pending on the date when the declaration was filed. I do not agree to this contention for the reasons assigned infra.
11. If one looks at the appeal which the petitioner claims to have filed on December 26, 1998, before the Tribunal, then it would appear that it was at best a case of appeal being "pending" but it was certainly not a case of an appeal being "admitted" and "pending". The use of the words "is admitted and pending" in Section 95(i)(c) are important and significant. Mere filing of an appeal can be of no use for the purposes of taking advantage under the Scheme. It must further be shown that it is "admitted" for hearing by the appellate authority prior to the filing of declaration and that it is "pending" on the date of filing of declaration form. In other words, in order to claim benefit of the scheme, the assessee is required to comply with two things apart from others. One is that the appeal filed by the assessee should have been "admitted" for final hearing by the appellate authority prior to the filing of the declaration by the assessee, if it is a case of appeal and, secondly, it must be "pending" for final disposal. If the appeal is found to be not "admitted" for final hearing but is found to be simply pending without there being any order of admission, then no benefit of the Scheme can possibly be allowed to the assessee. In my opinion, the Legislature has in its wisdom confined the benefit of the Scheme to only those assessees whose appeals are "admitted" and "pending" before the appellate authority for their final disposal and not to those appeals which are not "admitted" for final hearing or in other words, simply pending. The deliberate use of the word "admitted" prior to the words "and pending" can never be regarded as redundant or otiose. It being a settled rule of interpretation that every word in the statute has its definite meaning and has full application to this case.
12. The submission of learned counsel for the petitioner would have had some force if the word "admitted" had not been used by the Legislature in Section 95(i)(c) of the scheme and instead only the word "is pending" had been used. In that situation, what was required to be seen was, whether any appeal was filed prior to the submission of declaration and whether it was pending on the date of submission of declaration. Such is not the case here.
13. Yet another submission of learned counsel for the petitioner that the Tribunal condoned the delay in filing the appeal though subsequent to filing a declaration on February 11, 2000, hence, it relates back to the date of filing of appeal, i.e., on December 26, 1998, so as to hold the appeal to be valid and pending on December 31, 1998, i.e., the date of filing declaration, has no merit for several reasons. Firstly, it is not in dispute that the appeal when filed on December 26, 1998, was barred by limitation. Secondly, the delay had not been condoned by the Tribunal either on December 26, 1998, or before December 31, 1998, i.e., prior to the filing of declaration, thirdly, even assuming that the appeal had been filed within the limitation on December 26, 1998, even then it was of no consequence for the reason that it was only a case of filing of an appeal but it was not "admitted" for hearing. I have already held supra, that mere filing of an appeal whether within time or barred by time, is of no significance. In order to take benefit of the Scheme, the assessee is required to prove that his appeal was actually "admitted" by the appellate authority prior to the submission of the declaration and, secondly, what was pending before the appellate authority should be an "admitted" appeal. In other words, one is required to make a distinction between "pending appeal" and "admitted" pending appeal. Because, the scheme will apply only to "admitted pending appeal" and not to "pending appeal". The same reasoning will apply to writs and references also.
14. Learned counsel for the petitioner then submitted that there being no provision under the Income-tax (Appellate Tribunal) Rules, 1963, for admission of appeal once filed before the Tribunal, and, therefore, the word "admitted" used in Section 95(i)(c) of the Scheme will not apply to appeals filed in the Tribunal. Learned counsel maintained that the word "admitted" is used only with reference to writs and references which are filed only in the High Court and the Supreme Court, where the courts are required to examine whether the writ and/or reference is fit for admission, but this procedure according to learned counsel has no application so far as appeals filed before the Commissioner of Income-tax (Appeals) and/or the Tribunal is concerned. I do not agree with this submission also.
15. A rule of interpretation does not permit this type of construction of Section 95(i)(c). The words "admitted and pending" used in Sub-clause (c) has its application to all the three type of cases, namely, appeal, reference and writ petition. Indeed, the Legislature was quite aware of the procedure which has its application for prosecuting appeals, references and writs provided under the Act and the rules applicable to these three statutory remedies prescribed under the Act and the Constitution. It is for this reason that it specifically used the words "admitted" and "pending" after these three types of cases in Section 95(i)(c) ibid. However, in the same section while dealing with the case of revision, the Legislature has only used the word "is pending". In other words, not using the same phraseology, i.e., "admitted" and "pending" for revision and only using the word "pending" for revision is of great significance. This deliberate departure of the word "admitted" while dealing with the case of revision in the same section lends support to the interpretation that while it is not necessary for the assessee to show that his revision is "admitted" and "pending" on the date of submission of the declaration but by simply showing that revision is pending, the declaration can be entertained, it is not so in so far as it relates to appeals, writs and references else, the Legislature would not have carved out revision separately but would have kept it in the same category of appeal, writ and reference, or vice versa, i.e., placing the appeal along with revision, rather than with writs/references. In other words, nothing prevented the Legislature to include appeal along with revision instead of keeping it along with writ and reference while drafting Section 95(i)(c). In such eventuality the submission of learned counsel for the petitioner would have had some force. In that situation, the words "admitted and pending" would have had its application to writs and references whereas, the word "pending" would have had its application to appeal and revision, such is not the case here.
16. Equally untenable was the submission of learned counsel for the petitioner when he urged that the Appellate Tribunal's Rules do not provide for any procedure for admission of appeal. Mere perusal of elaborate rules read with Section 253(5) of the Income-tax Act would go to show that before the appeal is placed for hearing the Registrar of the Tribunal is empowered to even return the defective appeals to the appellant (rule 4A(2)(iv)), if the defects are not rectified by the appellant. Similarly, the Tribunal is empowered to dismiss the appeal if it finds that appeal has some defects and they are not rectified by the appellant. This elaborate procedure prescribed in the rules read with the powers of the Appellate Tribunal conferred by Section 253(5) ibid does indicate that it is necessary for the Tribunal to first admit the appeal for final hearing and then decide it on the merits. So far as appeal pending before the Commissioner of Income-tax (Appeals) is concerned, Section 249(3) and (4) ibid recognise the powers of the Commissioner of Income-tax (Appeals) to "admit" the appeal for final hearing. Indeed, Sub-sections (3) and (4) expressly use the word "admit".
17. Learned counsel for the petitioner had placed heavy reliance on a case reported in Raja Kulkarni v. State of Bombay, AIR 1954 SC 73, in support of his contention and contended that the question, whether there is a valid appeal or defective appeal, is not for the Commissioner to decide at the time of scrutiny of the declaration under the scheme but it is for the appellate authority to see these issues when the appeal is heard by the appellate authority. Learned counsel maintained that in view of the ratio of Kulkarni's case, AIR 1954 SC 73, mere filing of an appeal is enough to attract the provisions of the Scheme entitling the petitioner to avail of its benefit. I do not agree. The question that fell for consideration before their Lordships of the Supreme Court in the case of Raja Kulkarni, AIR 1954 SC 73, was in relation to an interpretation of Section 24(b) of the Industrial Disputes (Appellate Tribunal) Act, 1950. Though Section 24(b) is not reproduced verbatim in the report the observations of their Lordships while interpreting Section 24(b) do not indicate that its wording is in pari materia with Section 95(i)(c) of the Scheme in question. In other words, Section 24(b) of the Industrial Disputes (Appellate Tribunal) Act did not have the words "is admitted and pending" like in Section 95(i)(c) but Section 24(b) contained the words "during pendency of appeal". Secondly, the word "admitted" being conspicuously missing in Section 24(b) makes the case totally distinguishable with the present case and cannot be cited as a proposition in support of the submission. Thirdly, in the present case, it is necessary for the Commissioner while examining the declaration filed under the Scheme to ensure and record his finding as to whether it is in accordance with the requirements of the scheme or not. Obviously, therefore, Section 95(i)(c) being a part of the Scheme, it is equally obligatory on the part of the Commissioner to examine as to whether the assessee has fulfilled the requirement of Section 95(i)(c) or not. This includes the twin requirements as to whether any appeal or writ or reference as the case may be, is "pending" before the appellate authority, the High Court or the Supreme Court and, secondly, whether it is "admitted" by the appellate authority, if it is an appeal pending before the Commissioner of Income-tax (Appeals), or the Appellate Tribunal, or the High Court, if it is a reference under Section 256(1) or (2) of the Income-tax Act, or writ under Articles 226/227 of the Constitution of India, or special leave petition and/or civil appeal under Article 136, or writ under Article 32 of the Constitution of India before the Supreme Court. So far as revision under the Income-tax Act is concerned, the Commissioner is only required to see whether it is pending on the date of submission of declaration or not.
18. Equally untenable is the reliance placed by learned counsel for the petitioner on a case reported in Radhika Prakashan P. Ltd. v. Union of India [2002] 256 ITR 265 (MP). A perusal of this decision shows that it is not in any way helpful to the petitioner. There the question was, whether the appeal subsequently dismissed in default can be treated as appeal pending. This question is not involved in this case.
19. The word "admission", "admit" or "admitted" though not defined under any Act/rule has acquired definite meaning in the judicial system. No sooner than the appeal/petition/reference as the case may be is filed, is it placed for hearing before the appellate authority/court for deciding whether it involves any arguable case or not. If the appellate authority/court is of the opinion after hearing the appellant/writ petitioner that the case involves an arguable point, then in such event, the appellate authority/court admits the appeal/writ petition and directs issuance of notice to the respondent for its bi parte hearings. Such order of admission is a judicial order passed by the authority/court after hearing the appellant/writ petitioner on the question involved and after perusing the entire record of the case. There may be cases where the appellate authority/court finds no merit in the appeal/petition/reference after hearing the appellant/writ petitioner on the question involved and hence, may proceed to dismiss the case at its threshold and without calling the respondent to support the order impugned in the appeal/petition/reference. In such eventuality, the question of admission of the case does not arise and the lis results in its final termination at its threshold. However, if the appellate authority/ court is satisfied that the appeal/writ/reference involves an arguable point then the case is "admitted" for final hearing and notice is issued to the respondent. The reason being that no court/authority can set aside the order impugned without hearing the party in whose favour the order is passed. This process involves judicial application of mind by an appellate authority/court and hence assumes significance so far as emerging of any judicial order is concerned. As taken note of supra, it depends upon the facts of each case, whether it is a fit case for admission or not. Keeping these well settled principles and the procedure prescribed and evolved, this court cannot ignore the use of expression "admitted" in Section 95(i)(c) and has to give due weightage to the said word while interpreting the said section.
20. Coming to the facts of the case, it is not in dispute that the appeal filed by the petitioner on December 26, 1998, before the Tribunal was not an "admitted" appeal as on December 31, 1998, i.e., the date on which the petitioner submitted the declaration but it was only an appeal pending hence, it was hit by Section 95(i)(c) of the Scheme resulting in its rejection as not being in conformity with the requirement of the Scheme. In other words, the declaration did not satisfy the requirement of Section 95(i)(c) ibid and the Scheme had no application to the declaration submitted by the petitioner.
21. Accordingly and in view of the aforesaid discussion, I am of the considered opinion that the view taken by the Commissioner of Income-tax, respondent No. 1, that no appeal was pending on the date of submission of declaration in terms of Section 95(i)(c) ibid was legal and proper. It deserves to be upheld. It is, accordingly, upheld. As a consequence, the petition fails and is dismissed.
22. No costs.