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Manoj Ahuja And Another v. Inspecting Assistant Commissioner Of Income-Tax, Acquisition Range.
Factual and Procedural Background
The appeal arises from an order of acquisition dated 4 November 1974 under section 269F of the Income-tax Act, 1961, in respect of House No. 85, Sector 8-A, Chandigarh, purchased by Manoj Ahuja and Sanjay Ahuja (the appellants). A copy of the acquisition order was served on the appellants on 24 November 1974. The appellants, who were minors, had their father and natural guardian, Shri H.K. Ahuja, file an appeal under section 269G on 28 December 1974, which was beyond the prescribed limitation period. They also filed an application on 13 February 1975 under section 5 of the Limitation Act, 1963 for condonation of the delay. The Appellate Tribunal dismissed both the application and the appeal by order dated 24 March 1975 on two grounds: (a) that the application under section 5 was not competent because the proviso to section 269G(1) required such an application to be made before the expiry of the prescribed period; and (b) that Shri H.K. Ahuja, being an advocate who had attended proceedings, could not claim ignorance of limitation provisions. The present appeal challenges the Appellate Tribunal's dismissal and raises the question whether an appeal under section 269G can be admitted after the prescribed period if the appellant satisfies the Appellate Tribunal that he had sufficient cause for delay.
Legal Issues Presented
- Whether an appeal under section 269G of the Income-tax Act, 1961 filed against an order of acquisition under section 269F can be admitted after the prescribed period of limitation if the appellant satisfies the Appellate Tribunal that he had sufficient cause for not preferring the appeal within time (i.e., applicability of section 5 of the Limitation Act, 1963).
- Whether the Appellate Tribunal's order dated 24 March 1975 dismissing the appellant's appeal as time-barred was legally valid and sustainable.
Arguments of the Parties
Appellants' Arguments
- The appeal was filed on behalf of the appellants (who are minors) by their father and guardian, Shri H.K. Ahuja, and an application under section 5 of the Limitation Act was filed for condonation of delay.
- Shri H.K. Ahuja averred that the acquisition provisions (Chapter XXA) were recently incorporated, and he was under the bona fide impression that the period of limitation for filing an appeal (in analogous proceedings) was 60 days; he mistakenly believed the same applied in the present context because the order was passed by the IAC performing duties as a competent authority.
- Reliance was placed on the principle that a litigant should not ordinarily suffer for a mistake of his counsel (as supported by a Division Bench decision cited in the opinion).
Appellate Tribunal / Respondent's Position (as reflected in the orders)
- The Tribunal held the application for condonation under section 5 of the Limitation Act to be incompetent because the proviso to section 269G(1) requires any application seeking permission to file an appeal beyond the prescribed period to be made before the expiry of that period.
- The Tribunal further held that Shri H.K. Ahuja, being an advocate who had attended proceedings on behalf of the appellants, could not be considered unaware of the law relating to limitation, and therefore the appellants could not claim sufficient cause for delay.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bharat Rubber & Allied Industries v. State of Punjab, [1980] 46 STC 367 (Full Bench) | Held that provisions of section 5 of the Limitation Act are applicable to appeals under a special/local statute (here, the Punjab General Sales Tax Act); subsection (2) of section 29 of the Limitation Act allows application of Limitation Act provisions unless expressly excluded. | The court relied on this Full Bench decision to support the proposition that section 5 of the Limitation Act applies to appeals under special Acts such as the Income-tax Act where the special Act does not expressly exclude sections 4–24 of the Limitation Act. |
| CST v. Madan Lal Das & Sons, [1976] 38 STC 543 | Considered applicability of section 12(2) of the Limitation Act to appeals under the Uttar Pradesh Sales Tax Act and rejected the argument that the special Act formed a complete code excluding Limitation Act provisions. | The court cited this final-court decision as authority for the proposition that Limitation Act provisions apply to special/local tax statutes where not expressly excluded, supporting applicability to the Income-tax Act appeals. |
| Piare Lal Khushbakhat Rai v. The State Of Punjab, [1971] 27 STC 398 (Division Bench) | Adopted the view that Limitation Act provisions (as applicable) can be read into special/local statutes for computing limitation where not expressly excluded. | The court referred to this decision as a supportive precedent consistent with the ratio that Limitation Act provisions apply to special statutes like the Income-tax Act. |
| IAC of Income-tax (Acquisition) v. Kedar Nath Jhunjhunwalla, [1982] 133 ITR 746 (Patna High Court) | Presented a contrary view (to the above authorities) on the applicability of section 5 (or related Limitation Act provisions) to appeals under the I.T. (Acquisition) provisions. | The court explicitly rejected the contrary view expressed by the Patna High Court in this case and held that section 5 of the Limitation Act is applicable to appeals under section 269G of the Income-tax Act. |
| Smt. Nirmal Khosla v. Union of India, AIR 1976 P & H 22 (Division Bench) | Illustrates the principle that a litigant should not ordinarily suffer for a mistake of his counsel; the court condoned delay caused by counsel's wrong calculation of limitation. | The court relied on this decision to support the proposition that a mistake of counsel (here, the father/guardian counsel's mistaken belief about limitation) can furnish sufficient cause for condonation of delay, especially where minors are involved and the guardian acted bona fide. |
Court's Reasoning and Analysis
The court proceeded through the following analytical steps, applying the statutory text and cited precedents strictly as set out in the opinion:
- Statutory framing: The court examined section 269G(1) of the Income-tax Act, which prescribes time limits for appeals against acquisition orders and contains a proviso permitting the Appellate Tribunal, on an application made before expiry of the prescribed period, to allow an appeal to be presented within a further period if sufficient cause is shown.
- Interplay with the Limitation Act: The court analysed section 29 of the Limitation Act, 1963, which states that where a special or local law prescribes a period different from the Schedule to the Limitation Act, the provisions of sections 4–24 of the Limitation Act shall apply unless expressly excluded. On that textual basis the court concluded that section 5 of the Limitation Act (which allows admission of appeals/applications after prescribed period if sufficient cause is shown) applies to proceedings under the Income-tax Act because the Income-tax Act did not expressly exclude sections 4–24.
- Reliance on precedent: The court relied on earlier decisions (Bharat Rubber & Allied Industries; CST v. Madan Lal Das & Sons; Piare Lal Khushbakhat Rai) which had held that Limitation Act provisions apply to special tax statutes where not expressly excluded. These authorities were used to reinforce the conclusion that section 5 is applicable to appeals under section 269G.
- Rejection of contrary authority: The court expressly rejected the contrary view taken by the Patna High Court in IAC v. Kedar Nath Jhunjhunwalla, stating that the provisions of section 5 are fully applicable to appeals filed under section 269G of the Income-tax Act.
- Assessment of the Tribunal's reasoning: The court found that the Appellate Tribunal erred in treating the application of 13 February 1975 as incompetent. The application was moved under section 5 of the Limitation Act (read with section 151 of the Civil Procedure Code) and was therefore not an application under the proviso to section 269G(1). The Tribunal had failed to consider whether section 5 applied; instead it mechanically treated the application as incompetent because it was filed after expiry of the period prescribed by section 269G.
- Consideration of the guardian-advocate factor and minors: The court emphasized the protective role of courts towards minors and held that a guardian, even if an advocate, committing an error in understanding or applying the law should not lead to prejudice to the minors. The court treated the averment of bona fide mistake (belief in a 60-day limitation period) as material.
- Application of principle regarding counsel's mistake: The court referenced Smt. Nirmal Khosla to apply the principle that litigants should not ordinarily suffer for counsel's mistake and used that to justify condonation in the present case where the guardian-counsel mistakenly computed limitation.
Holding and Implications
Holding: The appeal is allowed; the Appellate Tribunal's order dated 24 March 1975 is set aside; the application for condonation of delay under section 5 of the Limitation Act is allowed; and the matter is remitted to the Appellate Tribunal for fresh decision on merits.
Implications and direct effects:
- The Appellate Tribunal's dismissal of the appeal as time-barred is vacated and the appeal is to be decided on its merits by the Tribunal afresh.
- The court held, as a matter of law for the purposes of this case, that section 5 of the Limitation Act is applicable to appeals under section 269G of the Income-tax Act because the Income-tax Act does not expressly exclude sections 4–24 of the Limitation Act; the contrary decision of the Patna High Court was rejected in this regard.
- Practical consequence for the parties: respondents were ordered to pay costs to the appellants assessed at Rs. 500.
- The court's decision vindicates the proposition that a bona fide mistake of counsel/guardian (particularly where minors are involved) may furnish sufficient cause for condonation of delay — as applied in this instance.
Sukhdev Singh Kang, J.:— Whether an appeal under s. 269G of the I.T Act, 1961 (“the Act” for short), filed against the order of the acquisition of immovable property made by the competent authority under s. 269F of the Act can be admitted after the period of limitation prescribed for such an appeal, if the appellant satisfies the Appellate Tribunal that he had sufficient cause for not preferring the appeal within time, is the short but meaningful question raised in this first appeal from order. Equally at issue is the legality and validity of the order dated March 24, 1975, of the Appellate Tribunal, dismissing the appellant's appeal as time-barred.
2. A brief survey of the pertinent facts will illumine the contours of the forensic controversy:
Sarvshri Manoj Ahuja and Sanjay Ahuja, the present appellants, purchased House No. 85, Sector 8-A, Chandigarh. The competent authority made an order dated November 4, 1974, for the acquisition of this property under sub-s. (6) of s. 269F of the Act.
3. The appellants, who are minors, filed an appeal under s. 269G of the Act against this order of the competent authority through Shri H.K Ahuja, their father and guardian, on December 28, 1974. As mentioned earlier, the order was made on November 4, 1974, and a copy of the said order was served on the appellants on November 24, 1974. The limitation for filing an appeal under clause (a) of sub-s. (1) of s. 269G of the Act was 30 days from the date of service of the copy of the order on the appellants. Since the appeal was filed after the period of limitation, the appellants filed an application under s. 5 of the Limitation Act, 1963; for the condo-nation of delay in presenting the appeal. The Appellate Tribunal dismissed this application as also the appeal, vide orders dated March 24, 1975, on two grounds:
(a) that the application for condonation of delay was not competent because under the proviso to s. 269G(1) of the Act, such an application should be made before the period for filing the appeal had expired; and
(b) that Shri H.K Ahuja, the father and natural guardian of appellants, is an advocate and he had been attending the proceedings before the competent authority on behalf of the appellants from time to time. Under these circumstances, it was difficult to hold that Shri H.K Ahuja was unaware of the provisions of law relating to limitation.
4. Aggrieved, the appellants have filed the present appeal. It will be helpful to read the various relevant statutory provisions at the very thres hold:
The Limitation Act, 1963:
“S. 5. Extension of prescribed period in certain cases.— Any appeal or any application, other than an application, under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.
Explanation.— The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section.”
“S. 29. Savings.— (1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872.
(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which they are not expressly excluded by such special or local law.
(3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law.
(4) Sections 25 and 26 and the definition of “easement” in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act, 1882, may for the time being extend.”
Income-tax Act, 1961:
“269G. (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.”
5. Chapter XXA of the Act, which includes section 269G, ibid, inserted in the Act by the Taxation Laws (Amendment) Act, 1972, with effect from November 15, 1972, provides for acquisition of immovable properties in certain cases of transfer to counteract evasion of tax. Clauses (a) and (b) of sub-s. (1) of s. 269G of the Act prescribe the limitation for filing appeals against the orders of the competent authority in different situations. By a proviso to these clauses, a provision has been made for making an application to the appellate authority before the expiry of the prescribed period of limitation for permission to file an appeal beyond the period of limitation. A provision like it is not found in many Acts. An opportunity has been provided to the persons aggrieved against the orders of the competent authority for seeking prior permission in appropriate cases to file an appeal beyond the period of limitation. There is no provision in the Act expressly excluding the application of the provisions contained in ss. 4 to 24 (inclusive) of the Limitation Act to proceedings under this Act. Section 29 of the Limitation Act in clear terms posits that where any special or local law prescribes a period of limitation for any appeal, application, et cetera, different from the period prescribed in the Schedule to the Limitation Act, the provisions contained in ss. 4 to 24 (inclusive) of the Limitation Act shall be applicable for the purpose of determining the period of limitation prescribed for such appeal, application, et cetera. Thus s. 5 of the Limitation Act is applicable to the proceedings under the Act. It relates to the determination of the period of limitation prescribed for the appeals and its application has not been expressly excluded by the Act. A Full Bench of this court in Bharat Rubber & Allied Industries v. State of Punjab, [1980] 46 STC 367 has held that the provisions of s. 5 of the Limitation Act are applicable to an appeal filed under the provisions of the Punjab General Sales Tax Act. It was observed (p. 369):
“It is, however, contended by Mr. Manchanda that the U.P Sales Tax Act constitutes a complete code in itself and as that Act prescribes the period of limitation for filing of a revision petition, the High Court was in error in relying upon the provisions of sub-section (2) of section 12 of the Limitation Act, 1963. This contention, in our opinion, is wholly bereft of force………There can be no manner of doubt that the U.P Sales Tax Act answers to the description of a special or local law. According to subsection (2) of section 29 of the Limitation Act, reproduced above, for the purpose of determining any period of limitation prescribed for any application by way special or local law, the provisions contained in section 12(2), inter alia, shall apply in so far as and to the extent to which they are not expressly excluded by such special or local law. There is nothing in the U.P Sales Tax Act expressly excluding the application of section 12(2) of the Limitation Act for determining the period of limitation prescribed for a revision application. The conclusion would, therefore, follow that the provisions of section 12(2) of the Limitation Act of 1963 can be relied upon in computing the period of limitation prescribed for filing a revision petition under section 10 of the U.P Sales Tax Act.”
6. Reliance was placed by the Full Bench on a decision of the final court in CST v. Madan Lal Das & Sons, [1976] 38 STC 543. Therein, their Lordships were examining the proposition as to whether the provisions of sub-s. (2) of s. 12 of the Limitation Act were applicable to an appeal under the provisions of the Uttar Pradesh Sales Tax Act. An argument was raised, on behalf of the Revenue, that the Uttar Pradesh Sales Tax Act was a complete code in itself when it provided a limitation for filing revision petitions and no provision was made therein for allowing the time spent in obtaining the certified copies of the impugned orders to be excluded while computing the period of limitation. This argument was repelled. A similar view was taken by a Division Bench of this court in Piare Lal Khushbakhat Rai v. The State Of Punjab, [1971] 27 STC 398. The I.T Act is also a special Act like the Punjab General Sales Tax Act. The ratio of these two decisions is fully applicable to the proceedings under the Act.
7. In view of the clear enunciation of law in the above two cases, we cannot accept the contrary view propounded by the Patna High Court in IAC of Income-tax (Acquisition) v. Kedar Nath Jhunjhunwalla, [1982] 133 ITR 746. We are of the considered view that the provisions of s. 5 of the Limitation Act are fully applicable to the appeals filed under s. 269G of the Act.
8. The Appellate Tribunal has held that the application under s. 5 of the Limitation Act for condonation of delay made on February 13, 1975, was not competent because such an application for late filing of the appeal had to be filed by the appellants before the period of limitation for filing the appeal expires. Since this application had been filed beyond the period of limitation, it could not be entertained and the same was dismissed. The conclusions of the Appellate Tribunal on this aspect of the case are, if we may say so with respect, based on a total misconception of law and facts. It is clearly mentioned in the application dated February 13, 1975, that it is being moved under s. 5 of the Limitation Act, read with s. 151, Civil Procedure Code. This was not an application under s. 269G(1) of the Act. The Tribunal has not considered as to whether the provisions of s. 5 of the Limitation Act were applicable to the appeal or not. Section 269G(1) of the Act or for that matter any other section of the Act does not in terms exclude the application of the provisions of ss. 4 to 24 (inclusive) of the Limitation Act to the applications, appeals, et cetera filed under the various provisions of the Act. The proviso to clauses (a) and (b) of sub-s. (1) of s. 269G of the Act was not invoked in the application and are not applicable to the present case and the application could be dismissed only because it was filed after the expiry of the period of limitation.
9. The Appellate Tribunal was fully aware that the appellants before them were minors. It is axiomatic that the court is the guardian of minors. It is the duty of every court and the Tribunal to protect and safeguard the interests of minors, of course, within the four walls of law. Shri H.K Ahuja filed the appeal on behalf of the appellants and also moved an application under s. 5 of the Limitation Act for condonation of delay. If a guardian, who also happens to be an advocate, makes a mistake in understanding and applying the law of the land, the interests of the minors cannot be allowed to suffer on that score.
10. Shri H.K Ahuja has averred in the application for condonation of delay that the acquisition proceedings were undertaken under Chapter XXA of the Act, which had been incorporated in the Act towards the end of 1972. It was a recent enactment. He was under the bona fide impression that the limitation for filing an appeal against the orders of the IAC of Income-tax is 60 days. In the present case, the order was passed by the IAC of Income-tax though performing the duties and functions of a competent authority under the Act. It seems that for this reason Shri H.K Ahuja was under a mistaken notion that the limitation for filing an appeal against the order of the competent authority was also 60 days. It is now well recognised that no litigant should ordinarily suffer for a mistake of his counsel. If any authority for this proposition is needed, reference may be made to a Division Bench judgment of this court in Smt. Nirmal Khosla v. Union of India, AIR 1976 P & H 22. In that case, because of the wrong calculation made by a counsel, the appeal had been filed beyond limitation. The Bench condoned the delay in filing the Letters Patent Appeal.
11. As a result, we allow the appeal and set aside the order dated March 24, 1975, of the Appellate Tribunal, and allow the application for condonation of delay and remit the appeal to the Appellate Tribunal for fresh decision on merits. The respondents shall pay the appellants costs which are assessed at Rs. 500.
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