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Citation Codes
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Case Number
Attorney(S)
  • Mr. U. Bhuyan and Mr. B. Chakraborty,
  • Dr. Ashok Saraf and Ms. N. Hawelia,
Judges
  • Hon'ble Mr. Chief Justice J. Chelameswar
  • Hon'ble Mr. Justice Hrishikesh Roy
Acts
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Mr. U. Bhuyan and Mr. B. Chakraborty,
  • Dr. Ashok Saraf and Ms. N. Hawelia,
Judges
  • Hon'ble Mr. Chief Justice J. Chelameswar
  • Hon'ble Mr. Justice Hrishikesh Roy
Acts
See more information ...
Smart Summary

Structured Summary of the Opinion (Jasti Chelameswar, C.J.)

Factual and Procedural Background

This application was filed by the revenue seeking condonation of a delay of 290 days in filing an appeal under section 260A of the Income-tax Act, 1961 against orders dated 31.8.2007 passed in ITA No. 44(Gau)/2004 and ITA No. 51(Gau)/2004 for the assessment year 2000-01. The applicant was represented by Mr. U. Bhuyan, learned counsel; the respondent was represented by Dr. A.K. Saraf, learned senior counsel. A preliminary objection was raised by the respondent as to the maintainability of the application: whether section 5 of the Limitation Act, 1963 can be invoked to condone delay in appeals under section 260A of the Income-tax Act.

Legal Issues Presented

  1. Whether the power under section 5 of the Limitation Act, 1963 (to condone delay) is available to the High Court in relation to appeals filed under section 260A of the Income-tax Act, 1961.
  2. Whether sub-section (7) of section 260A (which incorporates, "save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 relating to appeals to the High Court shall, as far as may be, apply") and the corresponding Civil Procedure rules (notably Rule 3A of Order 41) authorise the High Court to condone delay in appeals under section 260A.

Arguments of the Parties

Respondent's Arguments

  • Section 5 of the Limitation Act has no application to appeals under section 260A of the Income-tax Act; the provisions of the Income-tax Act on appeals and revisions form a complete Code covering forum, procedure and limitation, and reliance cannot be placed on the Limitation Act to enlarge or supplement it.
  • Relied on the Supreme Court decision in Commissioner of Customs and Central Excise v. Hongo India (2009) 315 ITR 449 and a subsequent Supreme Court order in Civil Appeal No. 5389/07 (Chaudharana Steels) in support of the submission that section 5 is inapplicable.

Applicant's (Revenue) Arguments

  • Contended that the Supreme Court decision in Hongo India is distinguishable because the Central Excise Act provisions considered there are not in pari materia with the provisions of the Income-tax Act dealing with appeals to the High Court.
  • Relied on a Full Bench decision of the Bombay High Court (Commissioner Of Income Tax v. Velingkar Brothers (2007) 289 ITR 382) which held that section 5 of the Limitation Act is applicable to proceedings under the Income-tax Act (the opinion states that the Full Bench considered applicability to section 250A).
  • Argued that sub-section (7) of section 260A incorporates relevant provisions of the Civil Procedure Code and that Rule 3A of Order 41 CPC (which addresses applications for condonation of delay) authorises the High Court to condone delay in appropriate cases; relied on sections 96 and 100 CPC read with Orders 41 and 42 and Rule 3A of Order 41 CPC.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Commissioner of Customs and Central Excise v. Hongo India (2009) 315 ITR 449 (Supreme Court) Whether a reference application under section 35H(1) of the Central Excise Act could be presented beyond the period of limitation by invoking section 5 of the Limitation Act; the nature of the special enactment may exclude Limitation Act provisions. The court examined the ratio decidendi and quoted the Supreme Court's conclusion that where the special enactment constitutes a complete code for appeals and references, the time limit may be absolute and unextendable and section 5 may not apply. This authority guided the court's analysis of whether the Income-tax Act similarly excludes section 5.
Chaudharana Steels Private Limited v. Commissioner Of Central Excise, Allahabad (Civil Appeal No. 5389/07) (Supreme Court order) Followed/relied on the Hongo India decision in the context of Central Excise appeals. Noted by the court as another Supreme Court order that followed Hongo India; used as supporting context for the proposition that a special enactment's scheme can displace the Limitation Act.
Commissioner Of Income Tax v. Velingkar Brothers (Full Bench, Bombay) (2007) 289 ITR 382 Held that section 5 of the Limitation Act is applicable to proceedings under (identified in the opinion as) section 250A of the Income-tax Act (Full Bench conclusion). The court acknowledged this Full Bench decision relied upon by the applicant but treated it as earlier authority which was subsequently considered in later decisions and found to be distinguishable by reference to the Supreme Court's later ruling.
Commissioner of Income-tax, City-VI, Mumbai v. Grasim Industries Limited (Division Bench, Bombay) (2009) 315 ITR 499 Considered whether High Court can resort to section 5 of the Limitation Act to condone delay in appeals under section 260A of the Income-tax Act. The court recorded that this Division Bench had concluded the High Court cannot rely on section 5 to condone delay under section 260A; the present court treated this later Bombay Division Bench decision as supporting the view that section 5 is inapplicable.
Commissioner of Income-Tax v. Mohd Farooq (Full Bench, Allahabad) (2009) 317 ITR 305 Examined the applicability of section 5 of the Limitation Act to appeals under section 260A of the Income-tax Act and considered the Full Bench of Bombay and the Supreme Court decision. The court noted the Allahabad Full Bench also opined that section 5 has no application to appeals under section 260A; the present court relied on the consistency of later authorities to reject the applicant's submission.

Court's Reasoning and Analysis

The court proceeded by first examining the ratio of the Supreme Court decision in Hongo India (2009) 315 ITR 449 because that decision directly addressed whether section 5 of the Limitation Act could be invoked to extend a time limit specified in a special enactment. The court extracted the following legal propositions from Hongo India as relevant:

  • The exclusion of the Limitation Act from the operation in respect of a special law does not depend solely on an express clause in the special law; a court must examine the scheme and nature of the special law to determine whether provisions of the Limitation Act are necessarily excluded by implication.
  • If the scheme of the special enactment demonstrates that it is a complete code in relation to matters such as the forum, procedure and limitation, then the provisions of the Limitation Act (including section 5) may be treated as excluded and the court must respect the legislative intent by not extending limitation periods by invoking section 5.

Applying the Hongo India reasoning, the court analyzed the Income-tax Act's scheme as follows:

  • Sections governing lower-tier appeals: Section 246A lists appealable orders to the Commissioner (Appeals). Section 249 prescribes the form and limitation for such appeals (30 days) and expressly empowers the Commissioner (Appeals) under sub-section (3) to admit appeals after the period if satisfied there was sufficient cause.
  • Tribunal appeals: Section 253 prescribes appeals to the Appellate Tribunal with sub-section (3) providing a 60-day limitation and sub-section (5) enabling the Tribunal to admit appeals beyond the period if satisfied there was sufficient cause.
  • High Court appeals: Section 260A(2)(a) requires appeals to the High Court to be filed within 120 days, but there is no corresponding provision within section 260A authorising the High Court to admit appeals after that period on a "sufficient cause" standard.

The court reasoned that where both the Commissioner (Appeals) and the Tribunal are expressly given power to condone delay, but the High Court is not so empowered in section 260A, this conspicuous omission points to a legislative choice. The court concluded that such silence cannot be treated as accidental; rather, it indicates that Parliament deliberately chose not to confer a discretion on the High Court to admit late appeals under section 260A.

The applicant's contention that section 260A(7) (which incorporates, "save as otherwise provided in this Act, the provisions of the Code of Civil Procedure relating to appeals to the High Court shall, as far as may be, apply") together with Rule 3A of Order 41 CPC, empowers the High Court to condone delay was considered and rejected. The court observed that Rule 3A of Order 41 CPC prescribes the procedural mechanism for an application for condonation of delay where a court already has the legal authority to condone delay; the Rule itself presumes such authority but does not, by its language, create a substantive power where Parliament has omitted it. Thus, the court found that section 260A(7) read with Rule 3A could not be used to read into section 260A a substantive power to condone delay that Parliament had not provided.

The court also reviewed competing decisions: the earlier Full Bench of the Bombay High Court (Velingkar) that held section 5 applicable, but noted that subsequent higher and later decisions — including the Supreme Court's Hongo India and later benches (Bombay Division Bench in Grasim and Allahabad Full Bench in Mohd Farooq) — supported the proposition that section 5 is inapplicable to appeals under section 260A. In the light of the Supreme Court's ratio and the subsequent judicial trend, the court found itself unable to accept the applicant's submissions.

Holding and Implications

Holding: The court accepted the preliminary objection raised by the respondent. The application seeking condonation of the 290-day delay was dismissed as not maintainable. Consequently, the appeal stood rejected.

Implications: The direct consequence of the ruling is that the High Court will not condone the delay in filing the appeal under section 260A in this matter; the specific application for condonation failed and the appeal is rejected. The opinion rests its conclusion on the statutory scheme of the Income-tax Act and on the Supreme Court's reasoning in Hongo India and subsequent relevant decisions; it does not purport to lay down a new principle beyond the application of those authorities to the facts before the court.

Show full summary ...

    Commissioner Of Income-Tax v. Williamson Tea (Assam) Ltd. .

    Jasti Chelameswar, C.J:— Heard Mr. U. Bhuyan, learned counsel for the applicant.

    2. This application is filed praying that the delay of 290 days in filing an appeal under section 260A of the Income-tax Act, 1961 against the order dated 31.8.2007 passed in ITA No. 44(Gau)/2004 and in ITA No. 51(Gau)/2004 for the assessment year 2000-01 be condoned. The application is filed by the revenue invoking the provisions of section 5 of the Limitation Act, 1963. The respondent is served, represented by Dr. A.K Saraf, learned senior counsel.

    3. When the matter is taken up today Dr. A.K Saraf, learned senior counsel raised a preliminary objection regarding maintainability of the present application. The learned counsel argued that section 5 of the Limitation Act has no application to the appeals under section 260A of the Income-tax Act. The power conferred upon the courts by virtue of section 5 of the Limitation Act to condone the delay, it any, in presenting either an appeal or an application is not available to this court while exercising jurisdiction under section 260A of the Income-tax Act.

    4. The submission of the learned counsel for the respondent is that the provisions of the Income-tax Act insofar as appeals and revisions under the Act are concerned, are a complete code in themselves prescribing various aspects of appeals and revisions such as the forum, the procedure and the limitation and it is not permissible in the background of such a situation to place reliance upon the provisions of the Limitation Act.

    5. The learned counsel for the respondent also placed reliance upon a judgment of the Supreme Court reported in Commissioner of Customs and Central Excise v. Hongo India (P.) Ltd., (2009) 315 ITR 449 in support of his submission. Further, the learned counsel brought to the notice of the court that the above mentioned decision of the Supreme Court was also followed in another order of the Supreme Court made in Civil Appeal No. 5389/07 (Chaudharana Steels Private Limited v. Commissioner Of Central Excise, Allahabad, Allahabad).

    6. On the other hand Mr. U. Bhuyan, learned counsel for the applicant/appellant argued firstly that the decision of the Supreme Court (2009) 315 ITR 449 (supra) is distinguishable for the reason that the provisions Page: 59of the Central Excise Act, which fell for the consideration of the Supreme Court in the said case, are not in pari materia with the provisions of the Income-tax Act dealing with the appeals to High Court and secondly that a Full Bench decision of the Bombay High Court reported in Commissioner Of Income Tax… v. Velingkar Brothers…, (2007) 289 ITR 382 on a consideration of the relevant provisions of the Income-tax Act came to the conclusion that section 5 of the Limitation Act is applicable to the proceedings under section 250A of the Income-tax Act.

    7. To arrive at a conclusion on the above issue we are of the opinion that the ratio decidendi of the decision of the Supreme Court in (2009) 315 ITR 449 (supra) is required to be examined. The question which fell for the consideration of the Supreme Court in the above mentioned case was whether a reference application under section 35H(1) of the Central Excise Act, 1944, as it existed on the date relevant to the appeal could be presented beyond the period of limitation prescribed under the above mentioned section invoking section 5 of the Limitation Act, 1963. One of the submissions before the Supreme Court was that in view or the language of section 29 sub-section 2 of the Limitation Act, 1963 the exclusion of the applicability of the provisions of the Limitation Act is permissible only in those cases where there is an express declaration in any special or local law to that effect. Since the Central Excise Act (no doubt a special enactment) does not contain any ‘such express provision of exclusion of the application of section 5 of the Limitation Act ought not to be implied. The Supreme Court categorically rejected the said submission. In the said judgment it was held by the Supreme Court as follows:—

    “Though, an argument was raised based on section 29 of the Limitation Act, even assuming that section 29(2) would be attracted what we have to determine is whether the provisions of this section are expressly excluded in the case of reference to High Court. It was contended before us that the words “expressly excluded” would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. In this regard, we have to see the scheme of the special law here in this case is Central Excise Act. The nature of the remedy provided therein are such that the Legislature intended it to be a complete Code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that even in a case where the special law does not exclude the provisions of sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the nature Page: 60of the sub-section matter and scheme of the special law exclude their operation. In other words, the applicability of the provisions of the Limitation Act, therefore, to be judged not from the terms of the Limitation Act but by the provisions of the Central Excise Act relating to filing of reference application to the High Court. The scheme of the Central Excise Act, 1944 support the conclusion that the time limit prescribed under section 35H(1) to make a reference to High Court is absolute and unextendable by court under section 5 of the Limitation Act. It is well settled law that it is the duty of the court to respect the legislative intent and by giving liberal interpretation, limitation cannot be extentded by invoking the provisions of section 5 of the Act.”

    8. In substance the exclusion of the applicability of the provisions of the Limitation act, 1963 does not solely depend on the existence of an express provision to that effect in any special or local enactment but such express exclusion is only one of the contingencies in which the applicability of the provisions of the Limitation Act is activated but there can as so be other contingencies where it is possible and the courts are required to reach a conclusion that the applicability of the provisions of the Limitation Act is excluded, such as when the scheme of the special or local enactment is such that it constitutes a complete code, regarding the forum, procedure and period of limitation etc. in filing any appeal or initiating any legal proceeding, by necessary implication the exclusion of the Limitation Act is required to be inferred.

    9. We are, therefore, required to examine the scheme of the Income-tax Act with reference to the provisions of the appeals and revisions under the Act with specific reference to the appeal to the High Court under section 260A of the Income-tax Act.

    10. Section 246A of the Income-tax Act specifies the orders which are appealable before the Commissioner (Appeals). The section contains a long list of orders which are appealable, the details of which may not be necessary for us for the present purpose. Section 249 deals with the form of the appeal and the period of limitation for the appeal contemplated under section 246A. The relevant in the context are subsection (2) and sub-section (3) of section 249. While sub-section (2) stipulated that an appeal is required to be filed within 30 days from the relevant date specified thereunder sub-section (3) authorises the Commissioner (Appeals) to admit an appeal after the expiry of the period of limitation if the Commissioner is satisfied that the appellant had sufficient cause for not presenting the appeal within the prescribed period of 30 days.

    11. Similarly, section 253 of the Income-tax Act provides for appeals to an Appellate Tribunal, constituted under section 252 of the Act, against Page: 61the various orders enumerated in section 253. Once again sub-section (3) and (5) of section 253 are relevant in the context. While sub-section (3) stipulates a period of limitation of 60 days reckoned from the gate of the communication of the order sought to be appealed against subsection (5) enable the Appellate Tribunal in its discretion to admit an appeal presented after the expiry of the period of limitation in those cases where the Tribunal is satisfied that there was sufficient cause for the appellant for not presenting the appeal within the prescribed period of limitation.

    12. Coming to the appeals to High Court, section 260A of the Income-tax Act provides for appeals to the High Court from various orders enumerated therein. Section 260A sub-section (2)(a) requires such appeals to be filed within 120 days from the date on which the order appealed against is received by the party proposing to prefer the appeal. No provision similar to the provision enabling both the Commissioner (Appeals) and the Tribunal to admit appeals presented beyond the period of limitation if they are satisfied that there was sufficient cause on the part of the appellant for not preferring the appeal within the period of limitation prescribed under the Act is framed in the context of appeals to the High Court under section 260A.

    13. Such conspicuous absence of a provision enabling the High Court to admit appeals presented beyond the stipulated period of limitation, in our view, is capable of leading to only one inference that the Legislature clearly intended not to permit the reception of appeals, by the High Court beyond the period of limitation prescribed under the Act. While the Legislature clearly provided with a discretion in favour of the other appellate for a created under the Act to receive appeals presented beyond the period of limitation prescribed in the context of the appeals to such for a the Parliament was silent about such a discretion when it came to the appeals to the High Court. We are of the opinion that such a silence is not an accident or a mistake but by a deliberate choice and design. The scheme of the Income-tax Act insofar as it pertains to the appeals to various for a discussed above leads us to the inference that the Parliament did not intend to vest any discretion on the High Court to admit appeal presented beyond the period of limitation specified under the Act under section 260A, sub-section (2)(a), i.e, 120 days.

    14. However, Mr. U. Bhuyan learned counsel for the applicant submitted that the language of sub-section (7) of section 260A obligates this court to admit in appropriate cases appeals presented beyond the period of limitation specified under the Act. Sub-section (7) of section 260A reads as follows:—

    “(7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section.”

    15. According to the learned counsel for the applicant since the Parliament stipulated that the provisions of the CPC, relating to appeals to the High Court, apply to the appeals under the Income-tax Act. The provisions under the CPC which deal with the appeals to the High Court are section 96 and section 100 read with orders 41 and 42. The learned counsel placed reliance on rule 3A of order 41 of the CPC which according to the learned counsel authorises the High Court receiving appeals to condone the delay, if any, in presenting the appeal.

    16. Appeals to the High Court under the CPC could be filed under the provisions of section 96 and 100. While section 96 deals with the appeals from original decrees section 100 deals with the appeals from the appellate decrees. Orders 41 and 42 deal with the form and other procedural aspects of the above mentioned appeals. Rule 3A of order 41, relied upon by the learned counsel for the applicant, reads as follows:—

    “3A. Application for condonation of delay.—(1) When an appeal is presented after the expiry of the period of limitation specified therefore, it shall be accompanied by an application supported by affidavit setting forth the facts on which the appellant relies to satisfy the court that he had sufficient cause for no preferring the appeal within such period.

    (2) If the court sees no reason to reject the application without the issue of a notice to the respondent, notice thereof shall be issued to the respondent and the matter shall be finally decided by the court before it proceeds to deal with the appeal under rule 11 or rule 13, as the case may be.

    (3) Where an application has been made under sub-rule (1), the court shall not make an order to the stay of execution of the decree against which the appeal is proposed to be filed so long as the court does not, after hearing under rule 11, decide to hear the appeal.”

    17. On a plain reading of the said Rule it is obvious that the Rule does not provide for any legal authority to condone the delay in preferring the delay but prescribes the procedure where an appeal is presented beyond the period of limitation. The underlying presumption under rule 3A is that the High Court entertaining the appeal under section 100 or 96 or other court entertaining appeals under section 96 has the requisite legal authority of condoning the delay in presenting the appeal, a presumption based on the express language of section 5 read with Part II of the First Schedule to the Limitation Act. Therefore, the Page: 63submission of the learned counsel for the applicant that sub-section (7) of section 260A of the Income-tax Act read with rule 3A, order 41 of the CPC authorises this court to condone the delay in presentation of an appeal under section 260A of the Income-tax Act in an appropriate case, cannot be accepted.

    18. The learned counsel for the applicant, however, placed strong reliance upon a Full Bench decision of the Bombay High Court reported in (2007) 289 ITR 382 (supra). No doubt, the Full Bench of the Bombay High Court was of the opinion that the High Court is entitled to condone the delay in presentation of appeal under section 260A by resorting to the power under section 5 of the Limitation Act but the decision of the Supreme Court in (supra) is later than the decision of the Bombay High Court and the provision and scheme of the Central Excise Act are substantially similar to the relevant provision of the Income-tax Act. On the other hand, a later Division Bench of the Bombay High Court in a judgment dated 8.7.2009 in Income-tax Appeal (L) No. 3592/08. The Commissioner of Income-tax, City-VI, Mumbai v. Grasim Industries Limited, Mumbai, (2009) 315 ITR 499 had an occasion to consider both the above mentioned two decisions of the Full Bench of the Bombay High Court as well as the Supreme Court in the context of the jurisdiction of the High Court under section 260A of the Income-tax Act and came to the conclusion that the High Court cannot resort to section 5 of the Limitation Act for condoning the delay in admitting an appeal delayedly presented under section 260A of the Income-tax Act. Another Full Bench of the Allahabad High Court in a case Commissioner of Income-Tax v. Mohd Farooq, (2009) 317 ITR 305 also opined that section 5 of the Limitation Act has no application to the appeals under the Income-tax Act; under section 260A of the Act. It may be mentioned here that the Full Bench of the Allahabad High Court also examined by the Full Bench decision of the Bombay High Court and the decision of the Supreme Court, referred to earlier.

    19. For the above reasons we are unable to accept the submission made by the applicant herein. Therefore, the preliminary objection raised by the respondent is accepted. The application is dismissed as not maintainable. Consequently the appeal stands rejected.

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    Comments

    Commissioner Of Income-Tax v. Williamson Tea (Assam) Ltd. .
    (Oct 28, 2009)