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Commissioner Of Income-Tax, Bombay v. Ekbal & Co.
Factual and Procedural Background
This is a reference under s. 66(1) of the Indian Income-tax Act, 1922. The question referred was whether a notice given under s. 22(2) of the Act was valid. Section 22(2) requires that a period specified in the notice for furnishing a return be “not being less than thirty days.” The notice in question was dated July 22, 1942, and served on August 24, 1942. The printed notice required the recipient to deliver a signed return “within thirty days of the receipt of the notice,” and contained a parenthetical phrase that was internally inconsistent due to struck-out printed words. The Appellate Tribunal held the notice illegal because it required return “within thirty days” rather than giving “not less than thirty days” (i.e., thirty clear days). The present opinion endorses the Tribunal's conclusion. The Commissioner was ordered to pay the costs of the reference. Attorneys named in the record: Mr. D.H. Nanavati for the Commissioner; Messrs Taker & Co. for the respondent.
Legal Issues Presented
- Whether a notice requiring an assessee to furnish a return "within thirty days of the receipt of the notice" satisfies the statutory requirement in s. 22(2) of the Indian Income-tax Act, 1922 that the period specified be "not being less than thirty days."
Arguments of the Parties
Commissioner's Argument
- It was urged (as recorded in the opinion) that what the notice intended to convey was the same as what s. 22(2) prescribed — i.e., that the notice's words amounted to giving the period required by the statute.
Respondent's Arguments
The opinion does not contain a detailed account of the parties' legal arguments beyond the single contention noted above about the intended meaning of the notice.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Maxwell on “Interpretation of Statutes”, 8th Edn. | Authority on interpretation principles concerning computation and exclusion/inclusion of terminal days when a statute prescribes a period expressed as "not less than" a specified number of days. | The Appellate Tribunal relied on Maxwell's commentary to support the view that "not less than thirty days" requires thirty clear days (excluding terminal points); the Court agreed with that reasoning. |
| In re: Railway Sleepers Supply Co. | Illustration that where a period is framed as a minimum (e.g., "not less than"), the period must continue beyond the expiration of the stated time — supporting the idea of a "clear" period. | Cited to show that "not less than thirty days" requires the period to continue beyond the stated terminal point; the Court invoked the same distinction to hold the notice invalid. |
Court's Reasoning and Analysis
The court's analysis focused on the difference in meaning between the expressions "within thirty days" and "not less than thirty days." The judges observed that:
- "Within thirty days" denotes a period bounded by two points in time (the start and the expiration), and obliges performance at any time before or up to the moment of expiry.
- "Not less than thirty days" denotes an interval outside the bounding points such that there must be an interval of thirty clear days — the period must continue beyond the expiration of the stated terminal point.
- The Appellate Tribunal's reliance on Maxwell on Interpretation of Statutes supported the interpretation that a statutory prescription of "not less than thirty days" requires exclusion of the terminal day(s) so as to give the assessee thirty clear days.
- The tribunal also stated that the mere fact that an assessee submitted a return later or that it was accepted for assessment does not cure an initial defect in the notice; the court agreed with that position.
- Applying these principles to the notice in question, which required the return "within thirty days of the receipt of the notice," the court concluded that the notice did not give the statutory period of "not less than thirty days" (thirty clear days) and was therefore invalid.
- Both Stoke, C.J., and Kania, J., concurred in this interpretive analysis and conclusion.
Holding and Implications
Holding: The court held that the notice was invalid and answered the reference in the negative: the notice did not comply with s. 22(2) because it required compliance "within thirty days" instead of giving a period "not being less than thirty days" (thirty clear days). The Commissioner was ordered to pay the costs of the reference.
Implications: The direct effect is that the specific notice considered was declared invalid and the Commissioner bears the costs. The opinion applies and affirms the interpretive principle that a statutory requirement of a period "not being less than thirty days" must be given as thirty clear days; the opinion does not purport to create any broader rule beyond this interpretive application to the statute and the notice before the court.
Stoke, C.J:—
This is a reference under s. 66(1) of the Indian Income-tax Act, 1922. The point is a short one raising the question whether a notice given under s. 22(2) of the Act is a valid notice or not. That sub-section is as following:—
“In the case of any person whose total income is, in the Income-tax Officer's opinion, of such an amount as to render such person liable to income-tax, the Income-tax Officer may serve a notice upon him requiring him to furnish, within such period, not being less than thirty days, as may be specified in the notice, return in the prescribed form and verified in the prescribed manner setting fort (along with such other particulars as may be provided for in the notice) his total income and total world income during the previous year.”
The important words are “within such period, not being less than thirty days.” In fact what happened was this: A notice which is dated July 22, 1942, and served on August 24, 1942, and is in these terms:—
“In pursuance of the provisions of s. 22(2) of the Indian Income-tax Act, 1922, you are hereby required to prepare a true and correct statement of total income and your total world income during the previous year in the attached form (along with such other particulars as are required to complete the form) and to deliver it to mo at my office duly signed by you within thirty days of the receipt of the notice should the former date be less than 30 days after the receipt of the notice.”
Now clearly the words in the final parenthesis are meaningless, but they are printed on the form because immediately before words “within thirty days of the receipt of the notice” there are certain words in print which have been struck out, those words being “on or before or”. So the notice depends for its validity on the words “… in the attached form …. duly signed by you within thirty days of the receipt of the notice.” The Appellate Tribunal by its judgment, after referring to certain passages from Maxwell on “Interpretation of Statutes”, 8th Edn., stated as follows:—
“The learned author proceeds to observe that where ‘not less than’ or such other expression is used specifying the time for doing an act the ending terminal must also be excluded from the computation. Section 22(2) clearly lays down that an assessee must be given a period of ‘not less than 30 days’ from the receipt of the notice to furnish the return of his total income. It would, therefore, follow that he must have thirty clear days and the thirty days must be excluded from the computation. In the present case as we have already pointed out the assessee was asked to furnish the return within 30 days. Such a requirement did amount to giving him 30 clear days for the purpose. We therefore think that the notice in this case is illegal. The fact that the assessee submitted a return later or that it was accepted for the purpose of making the assessment does not, in our opinion, cure the defect that intially lay in the notice.”
I agree with that statement in the judgment of the Tribunal. Computation of periods of time have given rise to a great many cases, both, in this country, and in England. Time can be infinitely divided. There is no fraction of a second which is so short in duration that it cannot be divided into something smaller. In my judgment expressions “within thirty days” and “not less than thirty days” are two quite different things. “Within thirty days” is within two points of time, one at which the period begins and the other at which it expires. On the other hand, “not less than thirty days” is outside these two points of time. There must be an interval of not less than thirty days and that means thirty days clear. (See In re: Railway Sleepers Supply Co. The period must continue beyond the expiration of the stated time. Whereas “within” the stated period must mean what it says, something less than the moment of expiration. In my opinion, therefore, the notice is invalid and the question referred to must be answered in the negative. The Commissioner should pay the costs of the reference.
Kania, J.:—I agree. Section 22(2) provides that in the notice given to the assessee to furnish his return a particular period must be given to him. The sub-section further provides for such period “not being less than thirty days.” Reading the section by itself therefore it clearly means that the period within which the assessee has to send his return must neither at the beginning nor at the end encroach upon the thirty days. To put it in other words thirty clear days must elapse before his obligation to send the return becomes effective. The notice given in the case is to send of the return “within thirty days”, that being treated as a period of time given to the assessee to send his return. It seems to me clear that when a party is called upon to do an act “within” a stated number of days he necessarily cannot get that period of time clear. In other words according to the terms of the notice the assessee does not get 30 clear days period, before his obligation to send the return arises. I therefore agree that the notice is not in accordance with s. 22(2).
It was urged that what was intended to be conveyed by the notice is the same as what was prescribed by the section. We are not concerned with what was intended to be conveyed. The question is, by the words used by the authorities, have they carried out their obligation to give to the assessee a period “not less than thirty days” to furnish his return? The answer is in the negative because the notice calls upon him to send the return “within” that number of days.
Attorney for Commissioner: Mr. D.H Nanavati.
Attorneys for respondent: Messrs Taker & Co.
A.J.P
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