JUDGMENT
(Delivered by Satyanarayana Rao J.)
The question referred to us under S. 66(1) of the Indian Income-tax Act by the Income-tax Appellate Tribunal is:—
“Whether on the facts and in the circumstances of the case the order of the Appellate Assistant Commissioner, rejecting the appeal on the ground that it was timebarred was not an order under S. 31 of the Indian Income-tax Act and against which no appeal lay to the Tribunal”
The following facts relevant for the consideration of the question are taken from the statement of the case by the Appellate Tribunal. The assessees are the joint receivers appointed by the High Court for the management of the estate of the late Md. Umar Sahib of Madras. The receivers were, however, discharged after the application for reference under S. 66(1) was filed before the Tribunal and in their place, the heirs of the deceased were brought on record as respondents. For the accounting year 1943 a return of the income was made treating the estate as one single unit. The heirs, however, raised the contention that the assessment should be made upon them individually in proportion to the shares of the income which they obtained from the estate to which they succeeded. While that assessment was pending enquiry before the Income-tax Officer, for the subsequent year 1944, a return was again submitted by the assessees for separate assessment. The claim of the assessees for separate assessment was rejected by the Income-tax Officer for the two years. Against the order of the Income-tax Officer, appeals were preferred to the Appellate Assistant Commissioner and they were pending. For the accounting year 1945 again a similar claim was made by the heirs in their return submitted to the Income-tax Officer, and following the previous decision, the Income-tax Officer again negatived the claim. Against this order also there was an appeal to the Appellate Assistant Commissioner, which was filed on the 28th September 1946. The appeal was however out of time by 64 days. In a covering letter which they submitted to the Appellate Assistant Commissioner along with the memorandum of appeal, the assessees prayed for the condonation of the delay on the ground that the staff which received the order of the Income-tax Officer mislaid it and omitted to bring it to the notice of the assessees for the purpose of filing the appeal. The Appellate Assistant Commissioner was not satisfied with that explanation and therefore rejected the appeal on 11th October 1946. An appeal was thereafter preferred to the Appellate Tribunal against the order of the Appellate Assistant Commissioner rejecting the appeal. This appeal also was filed out of time but the Appellate Tribunal condoned the delay accepting the explanation offered by the assessees. When the appeal was taken up for hearing by the Tribunal, the departmental representative raised the preliminary objection that no appeal lay as the order of the Appellate Assistant Commissioner rejecting the appeal was an order under S. 30 of the Income-tax Act which was not appealable and that therefore the Tribunal had no jurisdiction to hear and dispose of the appeal. The Tribunal did not accept the contention, as in their opinion, the order of the Appellate Assistant Commissioner rejecting the appeal as time barred was a disposal of the appeal, and as the only section which empowered the Appellate Assistant Commissioner to dispose of an appeal was S. 31, the order of the Appellate Assistant Commissioner should be treated as one made under S. 31 of the Act. Therefore, the order, it was held by the Appellate Tribunal, was appealable. In the result the Tribunal allowed the appeal of the assessees and set aside the order of the Appellate Assistant Commissioner and remitted the case back for hearing. The question set out above was referred to this Court at the instance of the Income-tax Commissioner.
On behalf of the Commissioner it was contended by Mr. Rama Rao Sahib, the learned Advocate, that the order of the Appellate Assistant Commissioner was not one coming within S. 31 of the Act, and that, therefore the appeal to the Appellate Tribunal was incompetent. This argument is founded on the assumption, that S. 31 of the Act applies only to such appeals which are presented within the prescribed period or dealt with by the Assistant Commissioner after admitting appeal by condoning the delay, and that the section has no application to any orders passed by the Appellate Assistant Commissioner at a stage anterior to it. In support of this contention, learned Counsel relied on certain decisions of the Bombay and Allahabad High Courts. On behalf of the assessees reliance was placed upon the view taken by the Patna High Court, which, it was claimed, was also supported by a decision of the Judicial Committee.
Before an examination of the decisions cited on either side it would be convenient to refer to the provisions of the Act relating to appeals and to examine the scheme underlying these provisions. Under the Income-tax Act of 1922, before its amendment in 1939 and the introduction of the present S. 33, an appeal against the assessment order to the Assistant Commissioner was provided under S. 30 of the Act. The first sub section to that section contained a proviso that no appeal shall lie in respect of an assessment made under Sub S. (4) of S. 23, or under that sub-section read with S. 27. Sub-S. (2) of S. 30 provided that the appeal shall ordinarily be presented within thirty days of receipt of the notice of demand relating to the assessment and power was also conferred upon the Assistant Commissioner to admit an appeal after the expiration of the period, if he was satisfed that there was sufficient cause for not presenting the appeal within the prescribed period. Sub-S. (3) required that the appeal should be in the prescribed form and should be verified in the prescribed manner. S. 31 laid down the procedure for disposing of the appeal and also the powers of the appellate authority in disposing of an appeal. A further appeal to the Commissioner was provided by S. 32 in a limited class of cases. There was then no further appeal to income-tax appellate tribunal as it was not constituted; and it was only under the present S. 33 that such a provision was made. In respect of orders under S. 31, it was open under S. 66 to require the Commissioner to refer to the High Court a question of law arising out of such an order or decision, and if he refused to do so under Sub-Cl. 3 of S. 66, an application to the High Court could be made to require the Commissioner to state a case. This was altered in 1939 to some extent. The right of appeal under S. 30 of the Act against the orders of the Income-tax Officer relating to assessment to the Assistant Commissioner is continued by S. 30. The proviso to Sub-S. 1 in the old Act barring appeals against assessment orders under S. 23(4) has now been omitted and other provisos have been added. Sub-Cl. (2) to S. 30, requiring that the appeal should ordinarily be presented within 30 days of the receipt of demand levying the assessment and the power of the Appellate Assistant Commissioner to admit an appeal after the expiration of the period of 30 days if there was sufficient cause for not presenting it within that period, remains unaltered. Sub-Cl. (3) was also retained. The procedure to be followed and the powers to be exercised by the Assistant Commissioner acting as an appellate authority are retained under S. 31 though amplified to some extent. A second appeal is now provided to an Appellate Tribunal under S. 33 of the Act against orders passed by the Appellate Assistant Commissioner under S. 31. As we are now concerned only with an assessment order, we are not referring to the other provisions in Ss. 30 and 31 of the Act. The power to be exercised and the procedure to be followed by the Appellate Tribunal is also stated in S. 33. Under the present scheme, therefore, a further appeal to the Appellate Tribunal lies only if an order falls under S. 31 of the Act or under S. 28 and not otherwise. We are not in the present case concerned with S. 28. The appeal therefore to the Appellate Tribunal can be justified only if it is established that the order of the Appellate Assistant Commissioner rejecting the appeal is really one which was and could have been passed under S. 31 of the Act.
The point for determination is whether the narrow construction put upon S. 31 by the Bombay and Allahabad High Courts should be preferred to the liberal construction placed upon that section by the Patna High Court. A form is prescribed by S. 30 and rules were made under the rule making power for presenting an appeal. After an appeal is so presented, the appellate authority may have to consider certain questions of a preliminary nature, not touching the merits of the order appealed against. Such questions are, for example, whether the appeal was presented in time, and whether there was sufficient cause to condone the delay, whether an appeal conformed to the formalities prescribed by the rules or not, and whether an appeal was or was not barred by any of the provisions of the Act and so on. These questions, though in a sense they may relate to the appeal, do not really concern the merits of the appeal, i.e, the question whether the order appealed against was correct or not. There is no definition of an appeal in the Income-tax Act. While construing the word “appeal” in the third column in Art. 182 of the Limitation Act, Sir Dinshaw Mulla observed in Nagendranath Dey v. Sureshchandra Dey(1):
“There is no definition of appeal in the Civil Procedure Code, but their Lordships have no doubt that any application by a party to an appellate Court, asking it to set aside or revise a decision of a subordinate Court, is an appeal within the ordinary acceptation of the term, and that it is no less an appeal because it is irregular or incompetent”
There is no particular reason for not accepting and applying this definition to an appeal under the Income-tax Act The appeal may be an irregular appeal or an incompetent appeal or even may be an appeal which was presented out of time. But still the Appellate Court has to apply its mind before it rejects the appeal on a preliminary ground that no case for condoning the delay was made out or that the formalities required by law have not been complied with or that the appeal was incompetent. In considering these questions the appellate Court is undoubtedly exercising an appellate power and not a power which is outside it. No doubt under S. 30(2) of the Act power is given to condone the delay if sufficient cause is made out. But suppose a sufficient cause is not made out, then what is the kind of order which the appellate Court is authorised to make and under which section of the Act. Which is the Section of the Act that empowers the appellate Court to consider and weigh the reasons put forward in justification of the tiling of the appeal out of time and to come to a decision and reject the appeal. The Act does not specifically empower the appellate authority to reject an appeal which is out of time or which did not comply with the formalities or even an appeal which was incompetent. Pushed to its logical conclusion, the argument on behalf of the Income-tax Commissioner would lead to the result that in such cases, the appellate Court would have no power at all to reject the appeal. This could not have been the result contemplated by the legislature and that was for the reason that after the section conferring a right of appeal and empowering the appellate authority to excuse the delay if sufficient cause is made out and admit an appeal, there follows the section which defines the powers of the appellate Court and prescribes the procedure to be adopted in disposing of the appeal. Even in respect of the preliminary questions it cannot be doubted and indeed it was not disputed, that the appellate Court is bound to hear the appellant after fixing a date for hearing which Section confers such a power except it be S. 31. The legislature, in our opinion, thought that all such matters are covered by S. 31 which defines the procedure to be adopted and the power to be exercised by the Appellate Tribunal and therefore no other specific provision was made in the Act in that behalf.
This view is to a large extent supported by the observations of the Judicial Committee in Income-tax Commissioner v. Khemchand Ramdas. The view taken before the decision of the Privy Council in some of the High Courts was that under the proviso to S. 30, which is now omitted, an order by the Appellate Assistant Commissioner, that an appeal against an order of assessment under S. 23(4) was incompetent as such an appeal was barred by the proviso, and that a reference under S. 66 in such a case was precluded as the order was not one under S. 31. In the case before the judicial Committee above referred to, the Income-tax Officer made an assessment first under S. 23(4) and revised it later in view of a later order of the Commissioner declaring that the registration of a firm was invalid and passed a fresh order of assessment under S. 23(4) and made the assessees liable to super-tax under S. 55 of the Act. One of the questions considered was whether the later order was one against which an appeal to the Assistant Commissioner was competent. In dealing with this contention, their Lordships observed at page 251.
“If it was made, as the Commissioner has found, in purported exercise of the powers given by S. 23, Sub S. 4, the assessee nevertheless had a right of appeal to the Assistant Commissioner under S. 30 and the Commissioner was in error when he quashed the proceedings on that appeal.”
For as was truly said by Sir Shadi Lal in Duni Chand v. Commissioner of Income-tax(2):
“The mere fact that the assessment purports to have been made under that subsection does not shut out the appeal; it must be shown that the circumstances of the case bring it within the scope of that sub-section.”
As a preliminary to the application of the old proviso to S. 30 barring a right of appeal, it was always necessary when the assessee complained to see whether the circumstances of the case were such as would have justified action on the part of the Income-tax Officer of making an assessment under the best judgment rule in S. 23(4). If the circumstances did not warrant it, the assessment would be unsustainable. If on the contrary, the circumstances assumed to have existed by the Income-tax Officer, did in fact exist, the order would be correct and the appeal would be incompetent. It cannot be said therefore that because an appeal was incompetent, an order disposing of the appeal as being incompetent is not appealable. These are all no doubt questions of a preliminary nature to be determined by the appellate authority in the exercise of its appellate powers. The decision of Sir Shadi Lal which had the approval of the Judicial Committee was the foundation of the view taken by the Patna High Court, in the earliest of the cases in Kunwarji Ananda v. Commissioner of Income-tax, Bihar and Orissa(3), In the light of the decision of the Judicial Committee the earlier decision of the Allahabad High Court in Jot Ram Sher Singh v. Commissioner of Income-tax, United Provinces which was based upon the Full Bench decision of the Rangoon High Court in Abdul Bari Chowdry v. Commissioner of Income-tax, Burma seems to us erroneous. The Rangoon Full Bench disagreed to a considerable extent from the view taken in Duni Chand v. Commissioner of Income-tax. To accept the limited and narrow construction for which the Counsel for the Commissioner of Income-tax contends that the “appeal” in S. 31 must be understood as meaning only an appeal which was competent and was presented in time or which was admitted after the delay was condoned and which also complied with all the formalities, is to leave the appellate Court powerless to decide the preliminary points for there is no specific enumeration of the power in the scheme of the Act. It would also deprive the aggrieved party of a remedy and make him helpless even in cases where the order of the Appellate Assistant Commissioner was obviously wrong and unjust. There is no reason to restrict the meaning of the word “appeal” in S. 31 to an appeal which complied with all the requirements of the law and was ripe for consideration on the merits of the order appealed against. The expression “hearing of the appeal” and “disposing of the appeal” in Sub-Cls. 1 and 2 of S. 31 and the power to make further inquiry may ail equally apply to the preliminary stages as well as the subsequent stages of the hearing of an appeal.
The argument however most strongly pressed was that in enumerating the powers in Sub-S. 3 to S. 31 power to reject an appeal was not expressly mentioned, which, it was claimed was an indication that the preliminary stages of an appeal and the disposal and hearing of it were not within the purwiew of S. 31. We are unable to agree with this view. If the appeal is dismissed as incompetent or is rejected as it was filed out of time and no sufficient cause was established, it results in an affirmation of the order appealed against. When pressed, learned Counsel however was forced to concede that if an appeal, though out of time, was admitted by mistake and at the hearing an objection was taken by the respondent which was upheld, the order rejecting the appeal at that stage would fall under S. 31. One of the decisions of the Allahabad High Court even held that once the delay was condoned and the appeal was admitted, but later on the objection of the respondent, it was found that the condonation of the delay at the earlier stage proceeded on a mistake, an order rejecting the appeal at that stage would be one under S. 31. It is also stated that if a date for the hearing of the appeal was fixed and the appeal was heard, the order might possibly fall under S. 31. If the argument in support of the Allahabad view were correct, where is the power under S. 31 to reject an appeal even under those circumstances. It must be conceded that the order of rejection under such circumstances would amount to confirmation of the order of the Income-tax Officer. The difficulty arises according to the argument advanced on behalf of the Income-tax Commissioner only in cases where the delay was not condoned by the Appellate Assistant Commissioner and when he deals with the matter ex parte. In such a case, it is said that the order would be outside the purview of S. 31. It is difficult to make a distinction in the manner suggested. It only shows and reinforces the argument that all the powers exercised and exercisable by the appellate authority are derived under S. 31 and that the language of S. 31 is wide enough to cover the two stages of the hearing of the appeal whether it related to questions of a preliminary nature or whether it related to the merits of the appeal. The decision of she Allahabad High Court in Jot Ram Sher Singh v. Commissioner of Income-tax, United Provinces, already referred to was followed by the same Court in Shivnath Prasad v. Commissioner of Income-tax, Central and United Provinces(4), in which the question was whether an order rejecting an appeal by the Assistant Commissioner as time barred was within the purview of Ss. 31, 32 or 33 of the Income-tax Act as it stood before 1939, and the High Court could direct the Commissioner to state a case under S. 66 of the Act. It was held that the order was not within S. 31 or any other section. It was an appeal filed out of time and the delay in presenting was not condoned and the appeal was non-existent; the question of the power to reject an appeal under any particular section of the Act was not considered by the learned Judges. An order rejecting an appeal on the ground of limitation was not considered to be an order confirming an assessment within the meaning of S. 31. According to the learned Judges an order confirming an assessment is an order which has reference to the assessment and which affirms it; in other words an express affirmation of the order of assessment should be made. All that the section says is that in disposing of an appeal, the Appellate Assistant Commissioner may in the case of an order of assessment confirm the order; if the appeal is rejected or if the appeal is dismissed it tantamounts to a confirmation of the order. It is not the form in which the judgment is pronounced that matters, but the substance and the consequence of the dismissal or rejection of the appeal. In a recent decision of the same Court in Special Manager, Court of Wards v. Commissioner of Income-tax, U.P there are observations doubting the correctness of the decision in Shivnath Prasad v. Commissioner of Income-tax C.P and U.P though obiter, for it was found even by the Appellate Tribunal that the case was not one in which the delay should be excused on the merits, as they were not satisfied with the sufficiency of the grounds for condoning the delay. After referring to a decision of the Patna High Court to the contrary, this is what the learned Judges state at p. 212:
“The other view at the same time may be possible that even though the period of limitation is prescribed under S. 30 and the power to grant extension is also given in that section the power is really exercised under S. 31 as the Appellate Assistant Commissioner when he decides not to extend the, period of limitation may be said in a sense to have confirmed the assessment. This question may assume some importance in a case where the appeal was within time but the Appellate Assistant Commissioner made a mistake a ad refused to admit it on the ground that the appeal was barred by limitation or the question might well have to be seriously considered in a case where there was sufficient cause for condonation of the delay and the exercise of the discretion by the Appellate Assistant Commissioner was considered to be perverse. In the case before us, however, both the Appellate Assistant Commissioner as well as the Appellate Tribunal considered the case on the merits and both were of the opinion that there were no sufficient grounds for the condonation of the delay……In the circumstances of the case, there is no point in having the question further considered by a larger Bench.”
There are two decisions of the same Court in 1951. In Mohd. Naim Md. Alam v. Commissioner of Income-tax, U.P the first of the cases, the Appellate Assistant Commissioner admitted an appeal but subsequently dismissed it on the ground that the appeal was time barred. This order was passed after issue of notice to the assessee fixing a date and place of hearing of the appeal and the order was treated as one falling under S. 31 which was appealable. The reason given by the learned Judges was that after the admission, of the appeal the only Section that would apply at the time of the hearing was S. 31. They however expressly refrained from expressing any opinion on the larger question for they observed at page 62:
“We do not want to go into the larger question whether an order refusing to condone the delay under S. 30(2) and thereafter rejecting the memorandum of appeal is an order under S. 30(2) of the Indian Income-tax Act or, is an order under S. 31 of the Act.”
The second decision is reported at page 63 as the Municipal Board, Agra v. Commissioner of Income-tax, U.P. The distinction was drawn in that case between an appeal which was dismissed in limine on the ground of limitation in which case the order would be under S. 30(2) and an appeal which was admitted and after fixing a date and place of hearing was dismissed as time barred in which case it would be an order under S. 31(1). On the facts it was a case where the appeal was dismissed in limine. Therefore it was held that there was no appeal. The distinction if we may say so with respect, between the two cases seems to be very thin.
The Bombay High Court in Commissioner of Income-tax v. Mysore Iron and works followed the Allahabad view. It was also a case where the Appellate Assistant Commissioner refused to condone the delay. The learned Judges refused to follow the Patna view and preferred the view taken by the Allahabad Court. With great respect we are unable to agree with the view taken by the learned Judges of the Bombay High Court. At page 480 the learned Chief Justice after examining the scheme of the Act, observes:
“Now, the scheme under Ss. 30 and 31 of the Act is fairly clear. An assessee has a statutory right to present an appeal within thirty days without any order being required from the Appellate Assistant Commissioner for admission of that appeal. But if the time prescribed expires, then that statutory right to present an appeal goes; and an appeal can only be entertained provided it is admitted by the Appellate Assistant Commissioner after condoning the delay. Therefore before an appeal could be admitted in this case, an order from the Appellate Assistant Commissioner, was requisite that the delay had been condoned, and it was only on such an order being made that the appeal could be entertained by the Appellate Assistant Commissioner. Now S. 31 deals only with such appeals which are presented within the prescribed period or admitted after the delay had been condoned, and the procedure laid down in S. 31 with regard to the hearing of appeals only applies to such appeals. Therefore, in my opinion, when the Appellate Assistant Commissioner refused to condone the delay, there was no appeal before him which he could hear and dispose of as provided under S. 31 of the Act.”
This in substance is also the argument advanced on behalf of the Income-tax Commissioner by Mr. Rama Rao Sahib.
Considerable light is thrown on the question which we are considering in this reference by the decision of the Full Bench in Kunwarji Ananda v. Commissioner of Income-tax, Bihar and Orissa. It was a case which arose under the old proviso to S. 30 barring a right of appeal in respect of an assessment order under S. 23(4). The observations of the learned Judges are in consonance with the principles laid down by the Privy Council in Income-tax Commissioner v. Khemchand Ramdas already referred to. Courtney Terrell C.J observed at page 202:
“It is undoubtedly the duty of the Assistant Commissioner when the order of the Income-tax Officer comes before him on appeal to decide whether or not he is precluded by the Act from going into the amount or rate of the assessment or the liability of the assessee, and, if he is so precluded, he must reject the appeal. In so rejecting the appeal he is, in my opinion, under S. 31 ‘disposing of an appeal’ and such disposal is a proceeding in connection with an assessment under this Act.”
The observations of Fazl Ali J. (as he then was) are more pertinent. At page 215 the learned Judge states:
“The Assistant Commissioner did not summarily dismiss the appeal but fixed a date and place for hearing the assessee and after dealing with the point as to whether the assessee was liable to be taxed under the Act or not, confirmed the assessment on the ground that the assessment had been rightly made under S. 23(4). The question is whether this order or decision was or was not one under S. 31. The learned Assistant Government Advocate contends that once it is found that no appeal lay to the Assistant Commissioner, the order passed by that officer cannot be regarded as one passed under S. 31. Now S. 31 provides that the Assistant Commissioner may in disposing of the appeal confirm, reduce, enhance or annul the assessment or may set it aside and direct the Income-tax Officer to make a fresh assessment after making such further inquiry as the Income-tax Officer thinks fit. In this case the Assistant Commissioner passed an order which is at least in form an order under S. 31. In passing the order the Assistant Commissioner also purported to act as the ordinary appellate authority and as far as I am aware there is no section in the Income-tax Act except S. 31 under which the order could have been passed. It appears to me, therefore, that the moment such an order is produced before the Commissioner of Income-tax, the assessee is entitled to ask him, if he so wishes, to refer such questions of law as arise out of it to the High Court under S. 66(2)…………………Under S. 31, the Assistant Commissioner has the power to allow the appeal as well as to reject it and the mere fact that he rejects it on the ground that in his opinion no appeal lies will be no ground for treating the order as one not passed under S. 31.”
Again at p. 219 after referring to a decision of the Calcutta High Court under Art. 179 of the Limitation Act of 1877 which had to construe whether there has been an appeal as in Nagendranath Dey v. Sureshchandra Dey the learned Judge adopts the reasoning in Wazir Mahton v. Lulit Singh and states:
“That case, it is true, was decided with reference to a wholly different Statute but the reasoning which wag adopted there is, in my opinion, also applicable to this case and I think that where an appeal has been actually preferred to the appellate authority and where it has been disposed of by such authority, the order passed in such a proceeding may, without straining the actual words of the section, be regarded as an order under S. 31 or S. 32 as the case may be.”
The observations of Sir Shadi Lal in Duni Chand v. The Commissioner of Income-tax, which had the approval of the Privy Council were relied on. In a later case of the same Court in Maharani Gyan Manjari Kuari v. Commissioner Of Income-Tax*, an appeal was rejected by the Appellate Assistant Commissioner on the ground that it was not in the prescribed form. It was held that the order of the Appellate Assistant Commissioner was within S. 31 of the Act and that the appeal was competent. Manoharlal J. who delivered the judgment of the Court quoted in extenso from the decision of the Full Bench in Kunwarji Ananda v. Commissioner of Income-tax, Bihar and Orissa(5), in support of his view. At p. 65 occurs the following extract from Dalva J's judgment which gives the basis of the decision:
“Where, however, the Assistant Commissioner holds that an appeal is barred by the proviso, (referring to the old proviso to S. 30) it has been urged by the learned Counsel for the Income-tax Department that there is no order passed under S. 31 and that consequently the assessee is not entitled to resort to the provisions of Sub SeeS. (2) and (3) of S. 66 for coming up to the High Court on questions of law. It appears to me that this contention is unsound. If the order be not an order under S. 31, there is no other section in the Act under which it can come. It is true that S. 31 deals with the hearing of the appeals, but does this necessarily mean a hearing of the appeal on the merits.”
The view taken by the Patna High Court, in our opinion, for the reasons already mentioned is correct. Under the Civil Procedure Code, it was held that if an appeal was rejected either on the ground of limitation or for a similar reason that the order of rejection was appealable as a decree—see Ayyanna v. Nagabhooshanam(6), Zamindar of Tuni v. Bennayya(7), and Saminatha Iyer v. Venkatasubba Iyer(8), in which Gulab Rai v. Mangilal(9) was followed—see also Kanthimathi Ammal v. Ganesa Iyer(10). But a Full Bench of our Court In re Kayambu Pillai(11), held that an order dismissing an appeal for non-compliance of the order requiring security for costs and an order dismissing an appeal for nonpayment of court-fee are not decrees and are not appealable as such. The decisions in Ayyanna v. Nagabhooshanam, and Zamindar of Tuni v. Bunnayya, were distinguished. There is a recent decision of Subba Rao, J. in Srinivasalu Naidu v. The Commissioner of Income-tax(12), which at first sight seems to be against the view which we have taken. The question which the learned Judge had to deal related to the construction of S. 33-A(2) of the Income-tax Act. The Commissioner is authorised by that section to exercise the power of revision but subject to certain restrictions provided in the section itself. The Commissioner has no power under that proviso to revise the order:
“(a) Where an appeal against the order lies to the Appellate Assistant Commissioner or to the Appellate Tribunal but has not been made, the time within which such appeal may be made has not expired, or, in the case of an appeal to the Appellate Tribunal, the assessee has not waived his right of appeal, or
(b) where an appeal against the order has been made to the Appellate Assistant Commissioner, the appeal is pending before the Appellate Assistant Commissioner, or
(c) the order has been made the subject of an appeal to the Appellate Tribunal.”
In that case an appeal to the Appellate Tribunal under S. 33 against an order of the Appellate Assistant Commissioner was dismissed as time barred. Thereafter the assessee applied to the Commissioner under S. 33-A(2) to revise the order of the Appellate Assistant Commissioner. He declined to entertain the application on the ground that the order of the Appellate Assistant Commissioner had already been made the subject of an appeal to the Appellate Tribunal. The assessee then applied to the High Court under S. 45 of the Specific Relief Act for directing the Commissioner to hear and determine the question. The objection raised was that the order of the Appellate Assistant Commissioner was made the subject of an appeal to the Appellate Tribunal though it was dismissed as being out of time and therefore the Commissioner could not be compelled to exercise the power of revision under S. 33-A(2). In the context in which the expression occurs it is clear that the bar to the exercise of the revisional jurisdiction was the actual pendency of an appeal before the Appellate Assistant Commissioner, or that there was a disposal on merits by the Appellate Tribunal and therefore it should not be again made the subject of revisional jurisdiction of the Commissioner. It was therefore rightly held by the learned Judge, if we may say so with respect, that a mere dismissal of an appeal in limine on the ground of limitation did not attract the bar to the exercise of the revisional jurisdiction and therefore a mandamus was issued. Reference was made in that judgment to the decision of Madhavan Nair J. in Bayya Reddi v. Gopalarao, and of the Judicial Committee in Nagendranath Dey v. Sureshchandra Dey. The decision, in our opinion, does not support to any extent the contention of Mr. Rama Rao Sahib. In Boya Reddi v. Gopalarao, no doubt the appeal memorandum was rejected as being out of time and the view that there was no appeal within the meaning of Art. 182(2) of the Limitation Act was based on the fact that under the Madras Amendment which introduced new Sub-Sec. 3 to R. 1 of O. XLI Civil Procedure Code, it was necessary to decide the application under S. 5 of the Limitation Act to excuse the delay before the appeal is admitted. The view therefore taken by the learned Judge is that that case can be justified on the ground. But that does not help the contention of Mr. Rama Rao Sahib.
We are therefore of opinion that the order of the Appellate Assistant Commissioner rejecting the appeal was one under S. 31 of the Income-tax Act and was appealable to the Appellate Tribunal. The question referred to us must therefore be answered in the affirmative and in favour of the assessee. As the assessee has succeeded in this reference, he is entitled to his costs which we fix at Rs. 250. (To be shared by the respondents between them).
V.C.S