Income Tax Appellate Tribunal - Hyderabad
Dr. K. Sambasiva Rao vs Assistant Commissioner Of Wealth Tax ... on 31 January, 1996
Equivalent citations: [1996]59ITD58(HYD)
ORDER
M. Ramakrishna, J. M.
1. These are thirty appeals in all, filed by three assessees for ten assessment years from 1977-78 to 1986-87. They are directed against consolidated orders passed by the CWT(A), Vijayawada for all these assessment years, in respect of each of these assessees. All the three appellate orders of the CWT(A) are dt. 2nd Nov., 1992. The issues involved and contentions urged in all these appeals of related assessees are similar, and as such, these appeals are being disposed of by this common order for the sake of convenience.
2. In all these appeals, the assessee raising several grounds of appeal, questioned the orders of the lower authorities not only with regard to the merits of valuation of various properties, but also the discrimination shown by the assessing authority against these assessees by making the reassessments as against two other co-owners viz., K. Lakashmaiah and K. Ramulu and time-barring nature of these assessments. In the appeals of K. Srinivasa Rao and K. V. Subba Rao, grounds were also raised questioning the rejection of the assessees' plea regarding the amnesty nature of the returns filed by the assessees for all these years.
3. Let us first consider the grievance of the assessees in all these appeals with regard to the time-barring nature of the assessments completed, since the said issue goes to the root of the matter.
4. Assessees filed returns of wealth for the asst. yrs. 1977-78 to 1982-83 on 30th March, 1986. Assessments for these years were originally completed on 25th March, 1987. Rejecting the contentions of the assessees against these assessments, the CWT(A) dismissed the appeals of the assessees by his order dt. 18th Nov., 1987. When the matters were carried in further appeal, the Tribunal by its order dt. 7th April, 1988, set aside the orders of the first appellate authority, and directed the framing of the assessments afresh after referring the assets for valuation by Departmental Valuation Cell. The reassessments for the asst. yrs. 1977-78 to 1982-83 were thereafter completed in pursuance of the appellate orders, on 31st Jan., 1992.
5. Similarly, for the asst. yrs. 1983-84 and 1984-85, returns were filed on 30th March, 1986. Assessments of all the three assessees for these years were originally completed on 28th Jan., 1988 and 12th Jan., 1988 respectively. Those original assessments were set aside by the CWT(A) by his appellate order dt. 22nd Nov., 1988, with a direction to the AO to reframe the assessments as per the directions given by the Tribunal in its order dt. 7th April, 1988 for earlier years referred to above. In pursuance of the said orders of the CWT(A), reassessments for these two years were completed on 31st Jan., 1992.
6. As for the asst. yrs. 1985-86 and 1986-87, original assessments, out of which the appeals before us arise, were completed on 31st Jan., 1992 under s. 16(5) in respect of Srinivasa Rao and Subba Rao whereas in respect of Srinivasa Rao, the same were completed under s. 16(3) of the WT Act.
7. It was the contention of the assessees that the assessments for all these years should have been made on or before 31st March, 1991. The CWT(A) in the impugned orders noted that M/s Bhaskara Picture Palace, Guntur, in which one of the assessees is a partner, filed a writ petition before the High Court of Andhra Pradesh, wherein the High Court granted stay of WT proceedings on 8th Feb., 1990 and that stay was vacated on 28th Nov., 1990. That order of the High Court vacating the stay was received by the CWT, Guntur on 22nd Feb., 1991, and thereupon the assessments were completed on 31st Jan., 1992. Considering this back ground, the CWT(A), held that the assessments were completed within the extended time, and hence they are not barred by limitation. Accordingly rejecting the contentions of the assessee in this behalf, the CWT(A) proceeded to consider the appeals before him on merits.
8. Inviting our attention to the provisions of s. 17A(1), proviso (a), of the WT Act, the learned counsel for the assessees submitted that all the assessments should have been completed by 31st March, 1991. Since the stay of the proceedings granted by the High Court was vacated by the High Court on 28th Nov., 1990 itself, there was sufficient time existed for the completion of the assessments before 31st March, 1991 as stipulated by the above provision of the statute. In these circumstances, it is submitted that the CWT(A) was not correct in holding that the assessments were completed within the period of limitation, if the period during which the assessment proceedings were stayed by the High Court, has been excluded. Reiterating the grounds urged in these appeals, it is contended by the learned counsel for the assessees that if the interpretation sought to be placed by the learned CWT(A) is accepted, that would amount to placing liberal interpretation on sub-cl. (ii) to the Expln. 1 of s. 17A(4) of the Act, regardless of the situation that has arisen in these cases.
9. Alternatively, it is contended that for the asst. yrs. 1977-78 to 1982-83, on account of the order of the Tribunal dt. 7th April, 1988, the time-limit for completion of assessments under s. 17A(3) of the WT Act, 1957 is 31st March, 1991, and similarly, the time-limit for completion of assessments on account of the order of the CWT(A) dt. 22nd Nov., 1988 for asst. yrs. 1983-84 and 1984-85, in terms of s. 17A(3) is 31st March, 1991, and as for the asst. yrs. 1985-86 and 1986-87, the assessments in terms of s. 17A(1) proviso (a) of the Act, should have been completed by 31st March, 1991. While this is the statutory position, whereby under various sub-sections and provisions of s. 17A of the WT Act, the assessments for all the assessment years from 1977-78 to 1986-87 should have been completed by 31st March, 1991, even if provisions of Expln. 1(ii) to s. 17A are pressed into service to exclude the period during which on account of stay granted by the Hon'ble High Court assessments could not be completed, it is only the actual period of stay, viz. 294 days from 8th Feb., 1990 to 28th Nov., 1990, on which date the stay was vacated, which is eligible for exclusion which computing the period of limitation. Thus, even in that case, the assessments now under dispute should have been completed by 19th Jan., 1992 and as such, the assessments for all these years completed on 31st Jan., 1992 are clearly barred by limitation. In support of these contentions, strong reliance is placed on the following decisions -
(a) C. B. Gautam vs. Union of India & Ors. (1993) 199 ITR 530 (SC).
(b) Mrs. Satwant Narang vs. Appropriate Authority (1991) 188 ITR 656 (Del).
(c) Smt. Savitri Rani Malik vs. CIT (1991) 186 ITR 701 (Gau).
(d) K. Muthusamy Pillai vs. ITAT & Ors. (1988) 174 ITR 636 (Mad).
(e) Ashok Singh vs. Asstt. CED (1992) 196 ITR 160 (SC).
In view of the above case-law, it is submitted for the assessees that in the instant cases, the stay order of the AP High Court was in force only from 8th Feb., 1990 to 28th Nov., 1990, which stands vacated as writ petition was dismissed on 28th Nov., 1990, and hence the first appellate authority was not correct in holding that the period till 22nd Feb., 1991, when according to him, copy of the order of the High Court vacating the stay was received by the CWT, Guntur has to be taken into account for the purpose of reckoning the period of limitation.
10. Disputing the date of receipt of communication with regard to vacation of stay by the High Court, by the Assessing Officer (AO) at Guntur, which according to the CWT(A) was 22nd Feb., 1991, the learned counsel for the assessee submitted that the AO at Guntur was aware of vacation of stay much before 22nd Feb., 1991, and in fact issued notices dt. 25th Jan., 1991 to one of the assessees before us, i.e., Venkata Subba Rao. Copies of the said notices have been filed before us, along with the written submissions of the learned counsel for the assessee - (K. V. Subba Rao) viz. P. Bala Srinivas. On the basis of these notices, it is submitted that the adoption of 22nd Feb., 1991 as the date of receipt of communication with regard to vacation of stay by High Court, by the lower authorities is incorrect. It is further submitted that the AO having issued the notices dt. 25th Jan., 1991 and having thus become aware of the vacation of the stay by the High Court much before the issuance of those notices, there was ample time available with him to complete the assessments, before they get barred by limitation on 31st March, 1991.
11. The learned Departmental Representative, on the other hand, strongly supporting the orders of the CWT(A) on this aspect, submitted that interpretation and application sought to be made by the learned counsel for the assessee to the proviso under Expln. 1 is neither correct nor tenable. According to him, the 'proviso' in question extends the period of exclusion referred to in cls. (i) to (iv) of the Explanation, but does not reduce the period of exclusion of time in any way. Further, he submitted that the 'proviso' itself having been brought into the statute book w.e.f. 27th Sept., 1991, it cannot come to the rescue of the assessee in the cases before us.
12. He further submitted that Limitation Law is only a procedural law and the assessee cannot claim a vested right or interest on it. He strongly contended that actual date of communication of vacation of stay to the Department, viz. to the CWT, has to be considered, and as such the period of limitation has to be extended by a period of 379 days reckoning the same from 8th Feb., 1990 to 22nd Feb., 1991. Thus, according to him, if the period of one year and 14 days is added to 31st March, 1991, the time available for completion of assessments was 14th April, 1992 and since the assessments were completed on 31st Jan., 1992, they were framed within time and are not barred by limitation. Placing reliance on the decision of the Supreme Court in Daya Shankar vs. State of U. P. AIR 1987 SC 1469 and the commentary of the learned author, Sarkar on CPC (Sixth Edition, p. 1006), he reiterated the contention that the date of actual communication to the AO is very much important.
13. Alternatively, he contended that if the date of receipt of the copy of the judgment by the standing counsel to the Department is considered as the date of effective communication to the Department, then the period from 8th Feb., 1990 to 28th Jan., 1991, totalling to 355 days has to be added to 31st March, 1992, which is the last date for completion of the assessment. In that case also, the limitation period gets extended to 21st March, 1992 and since the assessments were completed on 31st Jan., 1992 itself, they were framed within time and are not barred by limitation.
14. The learned Departmental Representative further submitted that there was a change in the incumbency of the AO, during the financial year 1991-92. As such, the time required for giving an opportunity of re-hearing to the assessee should also be excluded in reckoning the period of limitation in view of the provisions of Expln. 1 cl. (i) under s. 17A r/w proviso to s. 39 of the WT Act, 1957. In this connection, reliance is placed on the decisions of the jurisdictional High Court Anantha Naganna Chetty vs. CIT (1970) 78 ITR 783 (AP) and CWT vs. Smt. Azizunnissa Begum (1979) 119 ITR 376 (AP). It is thus, contended, without prejudice to the above other contentions that if the time taken by the successor AO in giving an opportunity of re-hearing to the assessee is reckoned at 14 days, the total period of exclusion in reckoning the limitation would be 294 days + 14 days and if this period of 308 days is added to 31st March, 1991, the last date for passing orders of assessment would be 2nd Feb., 1992 and since the impugned assessment orders were passed on 31st Jan., 1992, they were not barred by limitation.
15. He also placed reliance on the decision of the Calcutta High Court in the case of India Ferro Alloy Industry (P) Ltd. vs. CIT (1993) 202 ITR 671 (Cal), and ultimately contended that in any view of the matter, the impugned assessments are not barred by limitation, and the orders of the CWT(A) in that behalf are perfectly in order.
16. In reply, the learned counsel for the assessees distinguished the decisions relied upon by the learned Departmental Representative, and submitted that those decisions have no application to the facts and circumstances of the cases before us. In this context, placing reliance on the decision of the Karnataka High Court in M. Srikanta Setty vs. CIT (1986) 160 ITR 517 (Ker), it was submitted that the Law of Limitation has to be construed strictly. Reiterating the contentions urged earlier, it was submitted that it is the actual period of stay that was in force alone, which should be taken into account for reckoning the extended period of limitation, if any, and not the period taken for communication of vacation of stay or for affording opportunity of re-hearing to the assessee by a successor AO could be taken into account it is submitted that the proviso to s. 39 r/w s. 17A Expln. 1(i) is applicable only when the assessee concerned demanded for re-hearing of previous proceedings. As such, according to the learned counsel for the assessees, unless the assessees demanded for rehearing in the event of change in the incumbency of AO, the successor AO shall continue the proceedings, and no time allowance can be given in such a situation. In this view of the matter, it is submitted that the time required for re-hearing on account of re-hearing by the successor AO in the instant cases, cannot be added for extending the period of limitation, since the assessees in the instant cases have not at all demanded re-hearing in the light of change in the incumbency of AO. He strongly opposed the contention of the learned Departmental Representative, that the assessees in the instant cases cannot take benefit of proviso to Expln. 1 to s. 17A, since it came into statute book only w.e.f. 27th Sept., 1991, and submitted that the learned Departmental Representative by seeking consideration of period taken for communication of vacation of stay by the High Court to the AO, is calling for an intendment into s. 17A which the legislature never contemplated which is not permissible.
It is contended that even if the communication with regard to vacation of stay, as admitted by the learned Departmental Representative, was received by the AO on 15th Jan., 1991, there was still ample time for completion of the assessment by 31st March, 1991 as contemplated by statutory provisions. In this connection, reference was invited to the decision of the Supreme Court in Grindlays Bank Ltd. vs. ITO (1980) 122 ITR 55 (SC), wherein the apex Court considering that the assessment proceedings remained stayed during the entire period from 17th March, 1975 to 31st March, 1977 by successive orders of the Court and the assessment was completed on 31st March, 1977, itself, held that the assessment order having been made on the very first day after the period of stay expired, it could not be faulted on the ground of limitation. In the instant cases, it is submitted that when the stay was vacated by the order of the AP High Court dt. 28th Nov., 1990, the assessments framed on 31st Jan., 1992 cannot be saved from being barred by limitation, by any of the grounds put forth by the learned Departmental Representative. It is also submitted that even the time taken by the standing Counsel for the Department for obtaining the certified copy of the order of the High Court, is not liable to be taken into account for extending the period of limitation beyond 31st March, 1991. As such, the learned counsel for the assessees concluded that these assessments are liable to be cancelled as time-barred.
17. As already noted above, Shri P. Bala Srinivas, the learned counsel for the assessee, K. V. Subba Rao, filed written submissions before us, reiterating the above contentions. The learned Departmental Representative has also filed written submissions, reiterating the contentions of the Revenue discussed above. On one of the dates of hearing of these appeals, the learned Departmental Valuation Officer has filed written submissions, in support of the valuations made by him in the matters of Dr. K. Sambasiva Rao, which are also on record, of course, we are not concerned with these written submissions of the learned Departmental Valuation Officer, while determining the issue relating to the time-barring nature of the assessments in question.
18. We have considered the rival submissions and perused the orders of the lower authorities, besides the case-law and other papers filed before us by both sides, on the point at issue. In all these cases, assessments have been completed on 31st Jan., 1992. For the asst. yrs. 1977-78 to 1982-83, the impugned assessments have been completed in pursuance of the appellate orders of the Tribunal in the original assessment proceedings, dt. 7th April, 1988, whereas for the asst. yrs. 1983-84 and 1984-85, the impugned assessments have been completed in pursuance of the appellate orders of the CWT(A) in the original assessment proceedings, dt. 22nd Nov., 1988, and for the asst. yrs. 1985-86 and 1986-87, assessments have been completed for the first time on 31st Jan., 1992. The point at issue before us is whether those assessments made on 31st Jan., 1992 are barred by limitation, and whether the CWT(A) was justified in holding that they were not barred by limitation.
19. Already noted above, the CWT(A) taking note of the fact in the impugned orders that the A. P. High Court in the writ petition M. P. No. 20062/1989 filed by M/s. Bhaskar Picture Palace, in which one of the assessees before us are partners, by its order dt. 8th Feb., 1990 granted stay of WT proceedings of these assessees, and this stay was vacated only on 20th Nov., 1990, and the communication with regard to vacation of stay was received by the CWT, Guntur only on 22nd Feb., 1991. He considering these facts, held that the assessments were completed within the extended time and hence they were not barred by limitation.
20. At this juncture, we extract below provisions of s. 17A to the extent they are relevant for our purpose -
"Sec. 17A(1) No order of assessment shall be made under s. 16 at any time after the expiry of two years from the end of the assessment year in which the net wealth was first assessable; provided that -
(a) where the net wealth was first assessable in the assessment year commencing on the 1st day of April, 1987, or any earlier assessment year, such assessment may be made on or before 31st day of March, 1991;
(b)........
(2)........
(3) Notwithstanding anything contained in sub-ss. (1) and (2), an order of fresh assessment in pursuance of an order passed on or after the 1st day of April, 1975 under s. 23, s. 24 or s. 25, setting aside or cancelling an assessment, may be made at any time before the expiry of two years from the end of the financial year in which the order under s. 23 or s. 24 is received by the Chief CWT or CWT or as the case may be, the order under s. 25 is passed by the CWT;
Provided......
(4).......
Expln. 1. - In computing the period of limitation for the purposes of this section -
(i).......
(ii) The period during which the assessment proceeding is stayed by an order or injunction of any Court, or
(iii).......
shall be excluded;
Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-s. (1), (2) and (3) available to the AO for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.
Expln. 2. ........... " -
Thus, in the normal course, the assessments, for the asst. yr. 1987-88, or any earlier assessment year has to be completed on or before 31st March, 1991 in view of proviso (a) to s. 17A(1). Thus, for the asst. yrs. 1985-86 and 1986-87, for which the assessments for the first time have been made on 31st Jan., 1992, in normal course, the period of limitation would have been over by 31st March, 1991 in accordance with proviso (a) to s. 17A(1). Even for the asst. yrs. 1977-78 to 1982-83 for which the impugned assessments have been framed in pursuance of the order of the Tribunal dt. 17th April, 1988 and for the asst. yrs. 1983-84 and 1984-85 for which the impugned assessments have been framed in pursuance of the order of the CWT(A) dt. 22nd Nov., 1988, in respect of which provisions of s. 17A(3) extracted above applies, the normal period of limitation would have been over by 31st March, 1991 in accordance with the provisions of s. 17A(3).
21. The basic question that arises for our consideration is whether, on account of stay of assessment proceedings granted by the AP High Court in Writ Petn. M. P. No. 20062/1989 in the petition being W. P. No. 15206/1989 filed by M/s. Bhaskar Picture Palace, Guntur, in which one of the assessees before us is a partner, any period (s) has to be excluded. While the stay has been granted on 8th Feb., 1990 in the W. P. M. P. No. 20062, the Hon'ble High Court after issuing show-cause notice before admission to the Department on 8th Feb. 1990, delivered its judgment on 28th Nov., 1990, after hearing K. Ranganathachari, Advocate for the petitioner and M. Suryanarayana Murthy, standing counsel for the Department, whereby it dismissed the writ petition at the admission stage itself. It is well settled that an interim order passed in W. P. M. P. merges into the final order and it does not exist by itself.
That being so, in the instant cases, since the Hon'ble High Court dismissed the writ petition at the admission stage itself on 28th Nov., 1990, the interim order in W. P. M. P. 8th Feb., 1990 by which assessment proceedings were stayed, merges with the final order passed on 28th Nov., 1990, and since the final order passed on 28th Nov., 1990 did not give any relief to the petitioners and by virtue of the said order the writ petition itself was dismissed, the relief of stay of assessment proceedings granted by the interim order in W. P. M. P. on 8th Feb., 1990, ceases to exist with the passing of the final order on 28th Nov., 1990. Thus, the stay of the assessment proceedings was in force only for the period from 8th Feb., 1990 to 28th Nov., 1990. A copy of each of the order of the High Court granting stay of the proceedings, show-cause notice before admission and the judgment dt. 28th Nov., 1990 are available on record before us. Thus, the High Court's stay of the assessment proceedings was in force only for the period from 8th Feb., 1990 to 28th Nov., 1990.
22. We are not in agreement with the first limb of the assessee's case that since the stay granted by the High Court was vacated on 28th Nov., 1990 itself or as the case may be on 15th Jan., 1991 or 22nd Feb., 1991 as claimed by the Revenue, there was ample time for the Department to complete the assessments by the prescribed date viz. 31st March, 1991 and as such the assessments made on 31st Jan., 1992 are barred by limitation. In view of the unambiguous provisions of Expln. 1(ii) below s. 17A which specifically provides that the period during which the assessment proceedings is stayed by an order or injunction of any Court, shall be excluded in computing the period of limitation for the purposes of s. 17A, in our considered opinion, the period of limitation which expired on 31st March, 1991, has to be extended by the actual period of stay beyond 31st March, 1991. Merely because there was ample time beyond the vacation of stay by the High Court, Department cannot be denied the benefit of additional time contemplated by the exclusion of the period during which the assessment proceeding is stayed by an order or injunction of any Court in computing the period of limitation, in terms of Expln. 1(ii) to s. 17A.
23. We are, however, not in agreement with the learned Departmental Representative, that it is not only the actual period of stay, viz. from 8th Feb., 1990 to 28th Nov., 1990 which has to be excluded in the computation of period of limitation, but even the period involved in the communication of the vacation of stay to the CWT, Guntur has to be excluded. When Expln. 1(ii) to s. 17A specifically provides for exclusion of only 'the period during which the assessment proceeding is stayed by an order or injunction of any court', it is the actual period of stay alone that has to be excluded and nothing more. We find no merit in the contention of the learned Departmental Representative that just in the way an injunction order becomes operative only from the date on which it is served, unless the order vacating the stay is communicated, it could not have been acted upon, since the law did not provide for the exclusion of the period of limitation. As already noted above, the petition being W. P. No. 15206/1989 was dismissed at the admission stage itself by the judgment of the High Court dt. 28th Nov., 1990, a copy of which is available on record, after hearing both sides, in the presence of the standing counsel for the Department. The official notings of the High Court on the certified copy of the judgment filed before us, clearly indicates that the application for certified copy was made on 29th Nov., 1990, which shows that the Department was aware about the result of the writ petition, viz. its dismissal at the admission stage itself, through their standing counsel. Viewed in that context, the date of 22nd Feb. 1991 considered by the CWT(A) in the impugned orders or the date of 15th Jan., 1991 stated by the learned Departmental Representative, as the dates of receipt of communication with regard to vacation of stay by the CWT, Guntur, for the purposes of computation of period of limitation are we are not inclined to exclude any further period beyond the actual period of stay, as contemplated by Expln. 1(ii) to s. 17A of the Act, taken in the communication of the order of vacation of stay as claimed by the learned Departmental Representative.
24. In the case of C. B. Gautam vs. Union of India (supra), the Supreme Court, considering the effect of stay orders, on the period stipulated under s. 269UD of the IT Act, 1961, held as follows :
"Where there are stay orders inhibiting the authorities from taking further proceedings, the period referred to in s. 269UD(1) shall be reckoned with reference to the date on which the respective stay order is vacated".
Even as per the Hon'ble Supreme Court, it is the date on which the stay order is vacated, that is relevant, and not the date on which the communication of the order vacating the stay was received by the concerned authority.
25. The decision of the Supreme Court in Daya Shankar vs. High Court of Allahabad & Ors. AIR 1987 SC 1069 relied upon by the learned Departmental Representative is clearly distinguishable from the facts of the case on hand. In that case, the main issue relates to contempt. In that case, the Governor was not given notice by the petitioner, in the proceedings. The assessee has not obtained any stay, as such neither the question of vacation of stay nor the effect thereof on limitation, was before their lordships of the Supreme Court. While in that case, the Governor was not given notice about the proceedings concerning the stay, whereas in the present case before us, not only the notice of the proceedings were given to the Department, but also, as observed by us earlier, the writ petition itself came to be dismissed at the admission stage itself on 28th Nov., 1990 in the presence of the learned standing counsel for the Department. In that view of the matter, the decision relied upon by the learned Departmental Representative has no application to the facts of the present case.
26. As regards the stand of the learned Departmental Representative who relied upon the provisions of the Civil Procedure Code by way of analogy, no authority has been cited to substantiate the contention of the learned Departmental Representative that unless the vacation of the stay order is served on the party, it does not become effective. We find no merit in the contentions of the learned Departmental Representative in this behalf, and reject the same accordingly.
27. As regards, the next alternative contention of the learned Departmental Representative that at least the period taken by the standing counsel for the Department to obtain the certified copy of the judgment of the High Court inter alia vacating the stay granted, should be considered, we are unable to subscribe to that view. As already observed above, it is the actual period covered by the stay alone, that has to be considered for the purposes of reckoning the period of limitation. The provisions of WT Act discussed above prescribe the period to be excluded while computing the period of limitation, and as such, nothing more can be read into that provision. It is also well settled that when the provision is clear and unambiguous, we cannot add or read something more than what is stipulated. Further, the date on which the certified copy of the judgment is received by the standing counsel would be relevant only for the purposes of reckoning the period of limitation to file an appeal against the said judgment, and the said date is of no significance in determining the point at issue before us. Further, s. 40 of the WT Act itself, albeit in the context of computation of periods of limitation prescribed for an appeal, prescribes exclusion of the time required for obtaining a copy of the order appealed against. The said section in that behalf reads as follows -
"40. In computing the period of limitation prescribed for an appeal under this Act or for an application under s. 27, the day on which the order complained of was made and the time requisite for obtaining a copy of such order shall be excluded."
In this view of the matter, we reject this alternative contention of the learned Departmental Representative.
28. Even the change in the incumbency of the AO during the financial year 1991-92, in our considered opinion, does not call for extension of period of limitation beyond the actual period of stay of the proceedings by the High Court. The contentions of the learned Departmental Representative even on this aspect are liable to be rejected. As correctly contended by the learned counsel for the assessees, when there is a change in the incumbency of the AO, the successor AO shall continue the proceeding and in such a situation no time allowance can be given. Under proviso to s. 39 it is the prerogative of the assessee alone to demand a rehearing in the event of change in the incumbency of AO, and it is only in that event, as contended by the Revenue, under the provisions of Expln. 1 cl. (ix) to s. 17A r/w proviso to s. 39 of the Act, the time required in giving an opportunity of rehearing to the assessee should be excluded in reckoning the limitation period. Since none of the assessees before us have demanded such an opportunity of rehearing, the question of considering any period taken for rehearing on the change in the incumbency of the Assessing Officer, for exclusion in the computation of period of limitation does not arise. The decision of the AP High Court in K. Venkataramana & Budha Apparao vs. CIT (1987) 168 ITR 747 (AP) relied upon by the learned counsel for the assessee, clearly supports our view in this behalf. On the other hand, the decisions of the AP High Court in CWT vs. Smt. Azizunnisa Begum (supra) and in Anantha Nagamma Chetty vs. CIT (supra) are distinguishable on facts, from the cases on hand, and as such the ratio laid down in those decisions has no application to the cases before us.
29. Even the contention of the learned Departmental Representative that the proviso under Expln. 1 below s. 17A cannot come to the rescue of the assessee because it came into the statute only w.e.f. 27th Sept., 1991, is without any merit. Since as on the date the AO completed the assessment in question, the said proviso is on the statute book, it has to be considered for determining the time-barring nature of the assessments for these years. In fact the said proviso is intended for the benefit of Revenue and it extends the time limit upto 60 days, if after extending time as prescribed in Expln. 1 is less than 60 days.
30. Even though as contended by the learned Departmental Representative, Limitation Law is a procedural law only and the assessee cannot claim a vested right or interest on it, as held by the Karnataka High Court in the case of M. K. Srikanta Setty vs. CIT (1986) 160 ITR 517 (Kar) the law of Limitation has to be construed strictly. The Karnataka High Court in that case observed as follows :
"The fixation of periods of limitation must always be, to some extent, arbitrary, and may frequently result in hardship. But, in construing such provisions, equitable considerations are out of place and the strict grammatical meaning of the words is the only safe guide.
Sec. 3 of the voluntary disclosure of Income and Wealth Act, 1976, provides for making a declaration in accordance with the provisions of s. 4 of the Act before the first day of January, 1976, i.e. on or before 31st Dec., 1975. The time specified in s. 3 of the Act for making a declaration is an absolute period which cannot be extended or condoned by anyone under any circumstance.
The words 'make' and 'made' in ss. 3 and 4 of the Act mean that a declaration under the Act should be filed or presented on or before 31st Dec., 1975 and not beyond that.
The Court is bound to place a strict construction on the period of limitation stipulated by s. 3 of the Voluntary Disclosure of Income and Wealth Act, 1976. Any hardship to be caused is totally irrelevant and must be ignored by the Court."
The Court also held that in the absence of a provision for condonation of delay, the CIT could not condone the delay, whatever be the circumstances in which that delay occurred. If the CIT had no power to condone the delay, the High Court also could not exercise that power and extend the period of limitation.
31. Similarly, in the case of Mrs. Satwant Narang (supra), the Delhi High Court considering the provisions of s. 269UC, 269UD, 169UH and 269UL of the IT Act, observing that Chapter XX-C of the IT Act, 1961 lays down a very tight schedule for the Appropriate Authority to make up its mind to purchase or not to purchase the property, and there is no provision for extension of time, refused to allow another opportunity to the Appropriate Authority to make up their mind and directed the Appropriate Authority to issue the no objection certificate under s. 269UL of the IT Act.
32. Similarly, in the case of K. Muthusamy Pillai (supra), the Madras High Court, considering validity of the provisions of s. 256(1) of the IT Act, 1961 prescribing limitation for an application for reference, held as follows :
"The law of limitation is one of procedure and not one of substance. The object of prescribing limitation is to put an end to litigation. No person has a vested right as to limitation. If a special legislation lays down a particular limitation contrary to the general law of limitation, it is the special legislation which will prevail. The IT Act, has prescribed limitation for an application for reference. Parliament has chosen to lay down sixty days as the period of limitation. The power of condonation is only thirty days. Beyond that, there is absolutely no power for the Tribunal to condone delay. The authorities created under the IT Act are functionaries under the Act and derive power from the Act and so unless a power is expressly given they cannot exercise such power."
33. Further, the Gauhati High Court in the case of Smt. Savitri Rani Malik (supra), considering the provisions of s. 153 of the IT Act, 1961, held as follows :
"Statutes of limitation are jurisprudential necessities. They achieve peace and good administration and do not advance morals and good conduct.
If the result of the satisfaction of statutory authorities result in evil or civil consequences, the affected persons must be informed as a principle of natural justice or as part of the rule of audi alteram partem. Therefore, without information to the assessee, the Revenue cannot take the assessment proceedings out of the normal limitation period.
Assessment must be completed within the normal period prescribed under the Act. The IT authorities have been empowered to complete the assessment proceedings within the larger period of eight years where there has been concealment of income. Whenever assessees are informed of concealment of income, from that date the assessment proceedings 'fall' in the larger period of eight years. Such information to the assessee or service of notice also must fall within the normal period of limitation prescribed under the Act."
34. Similarly, considering the applicability of provisions of s. 37A of the ED Act, to the cases where application was made for grant of representation or a succession certificate and the account or the copy of the application delivered to the Controller is required by s. 56 of the said Act, the Supreme Court in the case of Ashok Singh vs. Asstt. CED (supra) held reversing the view taken by the Calcutta High Court as follows :
"..... The language of s. 73A was unambiguous. It threw a statutory bar and was comprehensive in nature. In so far as it said "no proceedings under this Act", that means no proceedings whatever in relation to the levy of estate duty could ever be commenced after five years. The object of s. 73A was unambiguous to bar the commencement of proceedings for levy of estate duty after the period of five years in the case of a first assessment. The Court could not dilute the rigour of s. 73A by introducing a construction not warranted by the situation. If it was the intention of Parliament to provide for exceptional cases making s. 73A inapplicable, nothing would have been easier than to have so expressed. The language of s. 73A was imperative. There could not be two periods of limitation (i) in a case where the accountable person filed a belated return, and (ii) in a case where the appellant sought a succession certificate. In such a case where the accountable person, as in the instant case, sought a certificate from the CED, all that the CED had to say was that no such certificate could be issued in view of the statutory bar under s. 73A."
35. In the case of India Ferro Alloy Industry (P) Ltd. (supra), considering the provisions of s. 153 of the IT Act, 1961, (the Court) held as follows :
"What is required for completion of the assessment is the determination of the tax liability and issue of demand notices but certainly not the service of the same on the assessee."
The said decision relied upon by the learned Departmental Representative was rendered in a different context, considering the facts and circumstances emanating in that case, which are distinct from those before us in these cases. In any event, the ratio laid down in that case by the Calcutta High Court has no application to the facts of the case before us. Since neither the determination of the tax liability nor the issuance of demand notice was done within the period of limitation, extended by the actual period of stay of proceedings granted by the High Court.
36. In view of the above discussion of various judicial pronouncements on the interpretation of the statutory provisions relating to periods of limitation, we have to conclude that the provisions prescribing limitation have to be construed strictly and literally, and in the absence of a provision for condonation of delay, neither the CWT nor any other appellate authority could condone the delay irrespective of the reasons that led to the said delay. As held by the Karnataka High Court in the case of M. K. Srikanta Setty (supra), any hardship to be caused is totally irrelevant and must be ignored by the Court. Applying the ratio of these judicial pronouncements, we have to hold that the period of limitation under s. 17A, which expires in all these cases on 31st March, 1991, is liable for extension in terms of Expln. 1(ii) to s. 17A, only by the actual period for which the proceedings in these cases have been stayed by the High Court and nothing more.
37. Even though the learned Departmental Representative contended that at least with regard to asst. yrs. 1985-86 and 1986-87, for which original assessments itself were completed on 31st Jan., 1992 in the cases of K. Sambasiva Rao and Subba Rao, where assessments have been completed under s. 16(5) or on the filing of return only in 1991, are not barred by limitation, since they have been completed within time prescribed under the statute, we are not in agreement with the said contention. The period of two years prescribed in the statute for completion of the assessments has to be reckoned with reference to the relevant assessment year, and the filing or non filing of the return has no relevance for that purpose. For that matter, the stay granted by the High Court has no effect at all with regard to these two assessment years, and as such in accordance with the provisions of s. 17A(1)(a), the assessments in respect of these two assessment years in respect of all these assessees, including Sambasiva Rao and Subba Rao, should have been completed by 31st March, 1991.
38. Since even for the other years the proceedings in these cases were stayed by the High Court from 8th Feb., 1990 to 28th Nov., 1990 viz. for 294 days, the said period of 294 days alone has to be added to 31st March, 1991 for determining the period of limitation as extended. The said extended period of limitation expires by 19th Jan., 1992, and since in all these cases, assessments have been completed only on 31st Jan., 1992, viz. beyond the extended period of limitation, which expired on 19th Jan., 1992, they are barred by limitation. In this view of the matter, we set aside the orders of the CWT(A) and cancel the assessments for the asst. yrs. 1977-78 to 1986-87 in respect of all the three assessees.
39. Since we are cancelling the very assessments for all these years on the ground that they are barred by limitation, the other grounds urged in all these appeals have become redundant, and they are now only of academic interest. As such we decline to go into those grounds, and reject them as such.
40. In the result, all these assessees' appeals are allowed.