Madras High Court
Smt. R.V. Sarojini Devi vs Inspecting Assistant Commissioner Of ... on 30 June, 1998
Equivalent citations: [2000]242ITR329(MAD)
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
JUDGMENT
1. The issue involved in this appeal is the scope of the proviso to Section 269G of the Income-tax Act, 1961. It is useful at the outset to set out Section 269G(1) of the Act and the proviso thereunder, Sub-section (2) not being relevant for the purpose of considering the issue that arises in this appeal. "269G. Appeal against order for acquisition.--(1) An appeal may be preferred to the Appellate Tribunal against the order for the acquisition of any immovable property made by the competent authority under Section 269F,--
(a) by the transferor or the transferee or any other person referred to in Sub-section (8) of that Section, within a period of forty-five days from the date of such order or a period of thirty days from the date of service of a copy of the order on such person under the said Sub-section, whichever period expires later ;
(b) by any other person interested in such immovable property, within forty-five days from the date of such order :
Provided that the Appellate Tribunal may, on an application made in this behalf before the expiry of the said period of forty-five days or, as the case may be, thirty days, permit, by order, the appeal to be presented within such further period as may be specified therein if the applicant satisfies the Appellate Tribunal that he has sufficient cause for not being able to present the appeal within the said period of forty-five days or, as the case may be, thirty days."
The proviso to Section 269G(1) of the Act specifies the period of limitation for filing an appeal to the Appellate Tribunal, the Appellate Tribunal being the Income-tax Appellate Tribunal constituted under Section 252 of the Income-tax Act. The appeal contemplated under this Section is against an order directing the acquisition of property, which in the opinion of the competent authority, had been sold at an undervaluation. The authority, has held that the apparent consideration for which the property had been sold by the appellant, who is a lady of 65 years of age, did not represent the fair market value. The order of the competent authority was served on the appellant personally on March 29, 1988, as found by the Tribunal. The service is evidenced by the acknowledgment signed by the appellant in token of having received the registered letter which contained the order of the competent authority. The order of the competent authority was made on March 11, 1988.
2. The period of limitation for filing the appeal against the order of the competent authority is a period of 45 days from the date of the order or 30 days from the date of service of the copy of the order, whichever period expires later. The benefit of filing the appeal within a period of 30 days from the date of service of the order can be availed of only by the transferor or the transferee or other person referred to in Sub-section (8) of Section 269F of the Act. The persons referred to in that Sub-section are persons who had made objections against the proposed acquisition under Section 269E of the Act. If the appeal is preferred by any other person interested in the immovable property in respect of which the competent authority had made an order for acquisition, such appeal is to be filed within 45 days from the date of that order. The Tribunal has not been vested with any power to extend that period of 45 days in respect of appeals filed under Section 269G(1)(b) of that Act, and there is no provision for the person filing an appeal thereunder to exclude any period while computing the period of 45 days from the date of the order.
3. The proviso to Section 269G(1) of the Act vests power in the Tribunal to extend the time for filing the appeal only if an application seeking such extension is filed before the period of 45 days or the period of 30 days from the date of service on the transferor, transferee or the person referred to in Section 269F, Sub-section (8) of the Act. The Tribunal is not vested with power to extend the time suo motu. That power is exercisable only on an application filed by the intending appellant.
4. The conditions which the transferor, transferee or the persons referred to in Section 269F(8) of the Act are required to satisfy before they can have the time for filing the appeal extended as set out in the proviso to Section 269G(1) of the Act are :
"(1) An application for that purpose is filed with the Tribunal before the expiry of the period of 45 days from the date of the order or 30 days from the date of service, whichever is later ;
(2) Prove to the satisfaction of the Tribunal that the applicant had sufficient cause for not being able to present the appeal within the said period of 45 days, or, as the case may be, 30 days."
The Tribunal thus though vested with the power to extend the time for filing of the appeal may exercise that power only on the applicant complying with the two conditions laid down in the proviso and not otherwise. The normal period of limitation is specified in the two Clauses (a) and (b) of Section 269G(1) of the Act. The extension of that period is provided for only when the person seeking that extension satisfies the conditions laid down in the proviso, and not otherwise. The power conferred on the Tribunal becomes available for being exercised only if the application for the extension of time is filed before the expiry of the period of limitation prescribed in Clause (a) of Section 269G(1) of the Act.
5. This proviso in contrast to the periods of limitation specified in the other provisions of the Act requires the intending appellant to approach the Tribunal even before the expiry of the period of limitation, and satisfy the Tribunal that the applicant for sufficient cause is unable to present the appeal within the period of limitation and, therefore, time for filing the appeal is to be extended. The Tribunal is thus vested for the purpose of Section 269G of the Act with power to extend the period of limitation, and not the power of condoning the delay that may have occurred after the period of limitation has expired. Unlike cases where the power is vested in the courts or Tribunals to condone the delay after the delay had in fact occurred, the proviso to Section 269G of the Act requires the intending appellant to approach the Tribunal before the expiry of the period of limitation, and obtain from the Tribunal an extension of the time for filing the appeal. It is implicit in the scheme of the proviso that the intending appellant may not come to the Tribunal after the period of limitation has expired, and request the Tribunal to condone the delay. Though it may appear that the Tribunal is vested with a higher power in being able to extend the period of limitation, that power is conditional upon the intending appellant approaching it within the period specified in the proviso. There is no general power vested in the Tribunal after the period of limitation has come to an end to notionally treat it as not having come to an end, and thereafter proceed to extend the time further. There is no doubt about the manner in which the period of limitation is to be computed. The starting point for the computation as also the terminal point have been specified. If, after considering those two points, and after ascertaining the period that has elapsed, it is found that the intending appellant had not approached the Tribunal within the period provided, whatever be the cause for his or her inability to approach the Tribunal, the right to appeal is lost.
6. That is the inevitable conclusion on a literal construction of the proviso to Section 269G of the Act. Mr. Ramachandran, learned counsel for the appellant, however, contended that a literal construction should not be adopted, having regard to the object, purpose and the scheme of Chapter XXA of the Act, which though found as part of the Income-tax Act should be read as a code in itself. It was his further submission that the Appellate Tribunal for the purposes of Section 269G of the Act is a court, and therefore, the provisions of the Limitation Act are applicable for the purpose of enabling the Tribunal to condone the delay in filing the appeal. Counsel did not dispute the fact that the nature of the power conferred on the Tribunal under the proviso is one of extending the period of limitation, and not that of condoning the delay. Counsel, however, contended that the substantive power conferred on the Tribunal being that of extension of time for filing the appeal, the procedural part for invoking that power is only to be regarded as directory and not mandatory. His further submission was that in case of any doubt, an interpretation which would advance the ends of justice must be preferred to an unjust result which may be the end-product of a literal interpretation of the terms of the proviso.
7. Mr. Subramaniam, learned senior counsel for the Revenue, on the other hand, submitted that Parliament consciously made a distinction between the general power conferred on the Appellate Tribunal to condone the delay in filing the appeals before it, for which provision is made under Section 255 of the Act; that the language employed in the proviso to Section 269G of the Act is crystal clear and can, by no means, be regarded as ambiguous requiring interpretation, and having to choose one or the other possible ways of reading that provision ; that it is well settled law that the Appellate Tribunal under the Act is not a court though its proceedings are judicial proceedings, and the power exercised by it is a judicial power, as it is not part of the regular hierarchy of courts constituted by Parliament or the State Legislature; that Section 29(2) of the Limitation Act is only applicable to courts and not Tribunals even though such Tribunals may also exercise judicial or quasi-judicial power, and that there is no scope for rewriting the proviso or for ignoring the clear words used in the proviso for the purpose of conferring power on the Tribunal which Parliament did not intend to confer. Counsel also referred to the other provisions of Chapter XXA, more particularly, Section 269-I of the Act, and submitted that the object of requiring the intending appellant to approach the Tribunal before the expiry of the period of limitation was to ensure that the competent authority is made aware of the likelihood of the appeal being filed and the period for which he is required to wait before giving effect to his order and the property vesting in the Government. It is not in dispute that compensation is payable by the State only after the property vests in the Government which can occur only after the disposal of the appeals filed before the Tribunal and the High Court, in case, such appeals are filed, and if not filed, after the expiry of the period of limitation prescribed for filing the same.
8. The first question to be considered is whether the Appellate Tribunal referred to in Section 269G of the Act is a court ? The Supreme Court, in the case of ITO v. M.K. Mohammed Kunhi [1969] 71 ITR 815, a decision rendered by a Bench of three learned judges of the apex court, while considering the question as to whether the Tribunal was vested with the power to grant stay, has made the following observation at page 820 of the Reports :
"It is well known that the Income-tax Appellate Tribunal is not a court but it exercises judicial powers. The Tribunal's power in dealing with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate court under the Civil Procedure Code."
The court held in that case that the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. The proposition recorded by the court was that the Appellate Tribunal was not a court, though it exercised judicial powers. Its power to grant stay was recognised not on account of the fact that it is a court, but, because it exercised appellate jurisdiction.
9. The distinction between the Appellate Tribunal and the court has been well brought out in the judgment of Mr. Chief Justice P. N. Bhagwati (as he then was) in the case of CIT v. Western India Engineering Co. Ltd. [1970] 77 ITR 165 (Guj). We are in respectful agreement with what has been held therein viz., that every judicial forum or quasi-judicial forum exercising judicial powers is not a court, and the further observation therein that all Tribunals are not courts, though all courts are Tribunals, and that the court in the strict sense is a Tribunal constituted by the State as a part of the ordinary hierarchy of courts of law invested with the State's inherent judicial power. As observed by Hidayatullah J., in the case of Harinagar Sugar Mills v. Shyam Sunder Jhunjhunwala [1961] 31 Comp Cas 387 (SC), courts are a part of the ordinary hirearchy of courts of civil judicature maintained by the State under the Constitution to exercise the judicial power of the State.
10. Though the judicial power of the State is reposed in the Income tax Appellate Tribunal and it decides disputes between the assessee and the Revenue and is bound to act on the evidence in accordance with law, nevertheless the Tribunal has not been regarded as a court by the apex court. In the case of CIT v. Walchand and Co. P. Ltd. , it was accepted as an indisputable proposition that the Income-tax Appellate Tribunal is not a court. It was observed therein that (page 384) :
"It is necessary to emphasise that, though the Tribunal is not a court, it is invested with judicial power to be exercised in a manner similar to the exercise of power of an appellate court acting under the Code of Civil Procedure."
Counsel for the Revenue also referred to the case of Dr. Baliram Woman Hiray v. Justice B. Lentin . In that case, the question that was considered by the Supreme Court was as to whether a Commission of Inquiry is a court properly so called. It was held therein that a Commission of Inquiry was not a court though the procedure adopted by it is of a legal character, and it had the power to administer oaths, and also to record evidence. While so holding, the court observed that it is a familiar feature of modern legislation to set up bodies and Tribunals, and entrust them with work of a judicial, quasi-judicial or administrative character, but they are not courts in the accepted sense of that term, though they may possess the trappings of a court.
11. Learned counsel for the appellant, however, contended that the Appellate Tribunal is a court as under Section 269G of the Act, it has power to render a final decision after following the procedure which is normally followed in a court, viz., hearing of the affected parties, consideration of the evidence and the rendering of a reasoned judgment which is binding on the parties. Counsel also submitted that the law on this point has been laid down in the case of Mukri Gopalan v. Cheppilat Puthanpurayil Aboobacker, . The court therein considered the question as to whether the appellate authority constituted under Section 18 of the Kerala Buildings (Lease and Rent Control) Act, satisfies the twin conditions for attracting applicability of Section 29(2) of the Limitation Act. It was held by the apex court that those conditions were in fact satisfied, and that Section 5 of the Limitation Act applied to appeals before that authority. The power under that special enactment had been conferred on the regular civil courts. The appellate authority therein was a court in the normal hierarchy of courts set up by the State. The apex court held that the powers under the special law were exercised by the civil court, that the special law did not exclude the application of the provisions of Sections 4 to 24 of the Limitation Act. That the civil courts were not exercising powers under the special statute as persona designate and, therefore, the provisions of Section 29(2) of the Limitation Act were applicable to the proceedings arising under the special law.
12. Though some of the observations made in that judgment appear to be at variance with the observations made in the case of Baliram Woman Hiray (Dr.) v. Justice B. Lentin , having regard to the fact that the Supreme Court (see CIT v. Walchand and Co. P. Ltd. [1967] 65 ITR 581 (SC) and ITO v. M. K. Mohammed Kunhi [19691 71 ITR 815 (SC)) has specifically referred to the Income-tax Appellate Tribunal, and held it to be only a judicial Tribunal, but not a court, it is not possible to regard the Appellate Tribunal for the purposes of Section 269G of the Act as a court.
13. Moreover, Chapter XXA itself provides an answer to the question as to whether the Appellate Tribunal is a court for the purposes of that Chapter. The Chapter has its own dictionary in so far as certain terms are defined in Section 269A. Clause (c) of Section 269A defines "court" :
" 'court' means a principal civil court of original jurisdiction unless the Central Government has appointed (as it is hereby authorised to do) any special judicial officer within any specified local limits to perform the functions of the court under this Chapter."
The Appellate Tribunal referred to in Section 269G of the Act is obviously not the court defined in Section 269A(c) of the Act. The fact that Parliament chose to define the word "court" in this Chapter is clearly indicative of the legislative intent not to treat the Appellate Tribunal as a court for the purposes of that Chapter. If the Appellate Tribunal is not a court, the provisions of the Limitation Act would clearly be inapplicable to the proceedings before the Appellate Tribunal.
14. Learned counsel for the assessee, however, contended that Section 29(2) of the Limitation Act does not use the word "court" and the applicability of that Section should not be limited to courts. Counsel besides stressing the fact that the word "court" is not employed anywhere in Section 29(2) of the Limitation Act, referred also to the preamble to the Act which states that it is an Act to consolidate and amend the law for the limitation of suits and other proceedings and for purposes connected therewith. It was submitted that the reference to other proceedings can only be to proceedings before forums which are not courts strictly so called. Counsel in this context referred to us a decision of this court in the case of Rethinasamy v. Komalavalli, , in which case it was held that Section 5 of the Limitation Act, 1963, is applicable to proceedings under the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960. In the course of the judgment, the court noticed the difference in terminology as between the Limitation Act, 1908, and that of 1963. It was observed by the court in the course of the judgment that the power under the rent control laws were being exercised by judicial officers who normally functioned as courts. The term "other proceedings", it was observed would include and embrace proceedings under the special and local laws. We cannot read that judgment to have laid down that the Limitation Act applies to all forums whether or not courts. The ratio of that decision is that the Limitation Act applies to proceedings in the courts when they discharge the powers conferred on them by the Rent Control Act, and no more.
15. Section 29(2) of the Limitation Act refers to special or local laws which prescribe a period of limitation different from the period prescribed in the Schedule, and which do not expressly exclude the application of Sections 4 to 24 of the Limitation Act. It is evident that what is dealt with under that provision is the period of limitation specified in a special or local law, and not the adjudicatory forum before which the dispute is brought and is to be adjudicated. The Limitation Act is only concerned with the period of limitation, and when the period prescribed in the Act is different from that prescribed in a special or local law unless the application of the Limitation Act is excluded, Sections 4 to 24 of the Act are to be read into that special law so far as limitation is concerned. Section 29(2) of the Act nowhere provides that the applicability of the Limitation Act is extended to all forums even when such forums cannot be regarded as courts. That the period of limitation prescribed in the Limitation Act is for proceedings in courts does not admit of any doubt. Section 3 of the Act refers to the proceedings which are proceedings before a court. Though Section 3 of the Limitation Act itself does not refer to court, it has to be read along with Section 4 of the Act which expressly refers to the court, and which provides that the day when the court is closed is to be excluded for the purpose of computation of limitation.
16. The Appellate Tribunal not being a court and the Limitation Act being applicable only to proceedings in courts, even when such proceedings are under any special or local law, the appellant cannot resort to any of the provisions of the Limitation Act including Section 5 for the purpose of invoking the jurisdiction of the Appellate Tribunal after the expiry of the period of limitation prescribed in the proviso to Section 269G(1) of the Act.
17. This is also the view of three other High Courts, viz., the High Court at Patna in the case of IAC of I.T. (Acquisition) v. Kedar Nath Jhunjhunwalla [1982] 133 ITR 746, that of Delhi in the case of Deen Dayal Goyal v. ITAT [1986] 158 ITR 391, and that of Andhra Pradesh in the case of B. Subba Rao v. IAC of I. T. [1987] 167 ITR 757 which have taken the view that the Appellate Tribunal is not a court and the provisions of the Limitation Act, are inapplicable to proceedings before the Tribunal under Section 269G of the Act.
18. Counsel for the appellant invited our attention to the decision of the Madhya Pradesh High Court, which in the submission of counsel has taken a contrary view. We are referring to the case of CIT v. Trilokinath . That decision was rendered in a proceeding which arose under Section 269H of the Act. Section 269H of the Act provides for an appeal to the High Court against the decision of the Appellate Tribunal. The proviso to Section 269H of the Act also requires an appellant who fails to file an appeal within the period prescribed under Section 269H(1) of the Act to approach the High Court before the expiry of the period of limitation, and seek extension of time for filing the appeal. The High Court held that to a proceeding under Section 269H of the Act, the Limitation Act applied, that the High Court had the power to condone the delay in filing the appeal, that power being traceable to Section 5 of the Limitation Act. It is beyond any doubt that the High Court is a court and would certainly satisfy the requirements of the Limitation Act for the purpose of extending the provisions of Sections 4 to 24 of the Act in proceedings before the High Court. The Appellate Tribunal, however, cannot be equated to the High Court and as held by us, the Appellate Tribunal cannot be treated as a court. We, therefore, do not see any inconsistency on this score in the rulings referred to by counsel for the Revenue, and this decision relied upon by counsel for the appellant. We may at once notice here that in this decision, the High Court also construed the terms of the proviso to Section 269H of the Act, and held that notwithstanding the fact that an application for extension of the limitation could be made under the proviso only before the expiry of 60 days, the proviso itself was inapplicable to cases where the appellant is unaware of the cause, which may prevent him from filing the appeal.
19. The argument advanced by learned counsel for the assessee that the proviso itself should be construed in a manner which would advance the cause of justice, and prevent an unjust result requires serious consideration. Counsel relied upon the observation of the Supreme Court in the case of K. P. Varghese v. ITO [1981] 131 ITR 597, more particularly, the observations of the court at pages 605 and 606. The observations relied on read as under :
"It is now a well-settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the Legislature, the court may modify the language used by the Legislature or even 'do some violence' to it, so as to achieve the obvious intention of the Legislature and produce a rational construction : vide Luke v. IRC [1964] 54 ITR 692 (HL) ; [1963] AC 557. The court may also in such a case read into the statutory provision a condition which, though not expressed, is implicit as constituting the basic assumption underlying the statutory provision."
In the case of K.P. Varghese [1981] 131 ITR 597, the apex court held that a fair and reasonable construction of Section 52(2) of the Income-tax Act would be to read into it a condition that it would apply only where the consideration for the transfer is understated, i.e., the assessee had actually received a larger consideration for the transfer than what was declared in the instrument of transfer and it would have no application in the case of bona fide transaction where the full value of the consideration for the transfer is correctly declared by the assessee.
20. We are bound by, and are in respectful agreement with, the observations that what is required by the court is to ascertain the intention of the Legislature and give full effect to it and while doing so, not to be obstructed by a literal construction which would lead to an unjust result and would not effectuate the intention of the Legislature.
21. Having said that, we must first look at the language employed in the statutory provision, have due regard to the context in which it occurs, the purpose it seeks to achieve, its setting in the scheme of the enactment, and ascertain the legislative intent. After having so ascertained the legislative intention, if it is found that effect cannot be given to that intention by a literal construction, it is at that stage that the court would be required to consider whether something needs to be read into that provision or as stated by the Supreme Court "some violence" needs to be done to the language employed in order to bring about a just result which conforms to the legislative intent.
22. The proviso to Section 269G has been extracted, and set out in the earlier part of this judgment. The literal construction thereof has also been dealt with. The legislative intent is manifest. The proviso departs from the scheme employed elsewhere in the Act for the purpose of enabling the affected party to invoke the appellate forum and the circumstances in which the appellant can seek the delay in approaching the forum condoned. The proviso does not provide for condonation of delay as rightly stressed by learned counsel for the Revenue. What it does is to enable the Tribunal to extend the period of limitation. That power is not a power vested in it for being exercised suo motu in the interest of justice, as the proviso does not provide for it. It is a power which has to be first invoked. The time within which the power is to be invoked is spelt out in clear cut terms. It is only when such an application is filed within the time prescribed that the Tribunal can be said to acquire jurisdiction to grant an extension of time and not at any point of time earlier or later. Counsel for the appellant submitted that such a construction would lead to unjust results. It was submitted that even though a party to the proceeding like the appellant herein had been served with notice of the order of the competent authority if on account of age, infirmity, serious illness, lack of worldly knowledge, the person so served with the notice may still be not in a position to take any effective steps for the purpose of filing an appeal, and such a person would be deprived of his right for no fault of his own. These considerations, however, cannot be regarded as considerations which would justify the court proceeding to rewrite the proviso by deleting from the proviso words which are clear and unambiguous or to add a rider to that proviso, which the Legislature has not chosen to incorporate. It is necessary to remember that we are not here concerned with the constitutional validity of the provision, but, only with the task of ascertaining its true import. It was open to the Legislature to prescribe a special period of limitation, and to restrict the circumstances in which the appellate forum could extend the period of limitation. It was not incumbent on the Legislature to even provide for the extension of the period. The Section could not possibly have been regarded as unconstitutional or beyond the legislative competence only on the ground that definite period of limitation has been prescribed without any provision for extending the same. When the proceeding was before a forum to which the Limitation Act was inapplicable, the affected party would be bound to work out his remedies strictly within the time frame provided in the statute, and considerations of equity would not entitle him to have that period extended on account of any difficulty in complying with the same within the prescribed period.
23. In the case of CST v. Parson Tools and Plants [1975] 35 STC 413, it was held by the apex court that even the time spent in bona fide prosecuting an application for setting aside an order of dismissal of an appeal for default, would not justify the period of limitation being extended when the Sales Tax Act which prescribed that period did not provide for such extension, and the Limitation Act was inapplicable to the proceeding before the authority constituted under the Act.
24. The fact that the statutory provision is harsh by itself would not constitute a ground for ignoring the legislative intent and the court proceeding to ignore any part of the provision.
25. The facts of this case also are not such as to persuade the court to hold that any grave injustice has been caused to the petitioner. The petitioner, though a lady of 65 years, cannot be said to have become infirm because of age. It is not her case that she was ill and unable to comprehend what was going on around her. She has herself received the order of the competent authority. The fact that she did not choose to consult her auditor or advocate in time cannot be regarded as having subjected her to a very unjust treatment, as anyone who is not sufficiently vigilant is liable to suffer the consequences of such lack of vigilance, whether under this provision or under any other provision of any statute, which prescribes a period of limitation. The Tribunal has found that the appeal was filed after a period of 26 days had elapsed from the last date of filing the appeal and the Tribunal was not persuaded that it was impossible for the appellant to have filed the appeal within the period of limitation.
26. Learned counsel for the appellant submitted that the consequence of a proceeding under this Chapter are rather drastic and, therefore, a liberal construction which would enable the parties to the transaction to preserve the property should be adopted. Though the consequence is severe inasmuch as a property which was purchased voluntarily at a time when there was no threat of any acquisition, is sought to be acquired immediately after and by virtue of the sale itself, that is a consequence which the transferee suffers and not the transferor, who has executed and registered the sale deed and has received the consideration. The appellant is the transferor. Having regard to this fact also, it is not possible to agree with the submission that the appellant would be exposed to grave injustice, if she is not allowed to prefer the appeal which admittedly was preferred 26 days after the expiry of the period of limitation.
27. The appeal is dismissed. We, however, do not make any order as to costs, having regard to the circumstances of the case.