Research › Browse › Judgment

Kerala High Court · body

1980 DIGILAW 133 (KER)

COMMR. OF INCOME T AX v. TIRUR MEDICAL HALL

1980-06-16

G.BALAGANGADHARAN NAIR, V.BALAKRISHNA ERADI

body1980
Judgment :- 1. At the instance of the Commissioner of Income Tax, Kerala, the Income Tax Appellate Tribunal, Cochin Bench (hereinafter called the Tribunal) has referred to this Court under S.256 (1) of the Income Tax Act, 1961, for short the Act. The following question of law has arisen out of the order of the Tribunal dated 30th August, 1977 in I.T.A. No. 162/ Cochin/1976-77: "Whether on the facts and circumstances of the case the appeal preferred by the assessee to the Appellate Assistant Commissioner against the order passed by the Income Tax Officer declining to condone the delay in the filing of the application for registration and consequently refusing registration for the assessment year 1974-75 was competent? 2. The assessee is a firm of three partners carrying on business in the name and style "Tirur Medical Hall". The partnership was constituted under a deed dated 15 11 1967. On 16 5 1974, the assessee filed an application before the Income Tax Officer in Form No 11-A praying for registration of the firm. Subsequently, the assessee realised that the correct form in which the application should have been filed was Form No.11 and hence it filed another application in Form No. 11 on 22 81974 Since the accounting year of the assessee relevant for the assessment year 1974-75 ended on 31 3 1974, the aforesaid application for registration was beyond the time limit prescribed by S.184 (4) of the Act. While putting in the application the assessee therefore submitted an explanation that the delay in filing the same was caused on account of the fact that one of the partners was suffering from "mental worries" and his physical condition was also not satisfactory from 131974 onwards. The Income Tax Officer was not satisfied with the said explanation and hence by his order dated 30th August, 1975 Annexure A -declined to condone the delay and rejected the application for registration. The said order was specifically expressed as one made under S 185 (1) (b) of the Act. 3. The assessee feeling aggrieved by that order appealed before the Appellate Assistant Commissioner, Calicut reiterating his submission that the delay in filing the application for registration had been caused on account of the mental and physical ailment of the partner by name Kunhimoidu, who was said to have been undergoing treatment during the period 10 2 1974 to 20 51974. The assessee feeling aggrieved by that order appealed before the Appellate Assistant Commissioner, Calicut reiterating his submission that the delay in filing the application for registration had been caused on account of the mental and physical ailment of the partner by name Kunhimoidu, who was said to have been undergoing treatment during the period 10 2 1974 to 20 51974. The Appellate Assistant Commissioner went into the merits of the said contention and held that the explanation offered by the assessee was vague and unsatisfactory and rejected the appeal as per his proceedings dated 23 21976 Annexure 'C'. 4. Thereupon the assessee took up the matter in second appeal before the Tribunal. A preliminary objection was raised by the departmental representative before the Tribunal that the order of the Income Tax Officer refusing to condone the delay was one passed under S.184(4) of the Act and since the Act does not provide an appeal against such an order, the appeal preferred by the assessee to the Appellate Assistant Commissioner was not competent and consequently the second appeal filed before the Tribunal was also not maintainable. The Tribunal took the view that in the scheme of granting registration to firms the only provision which envisages an order being passed by the Income Tax Officer is S.185 and the statute does not contemplate any order being passed by the Income Tax Officer under S.184. The decision of the Supreme Court in Mela Ram and Sons v. Commissioner of Income Tax, Punjab, (29 ITR. 607) was relied on by the Tribunal in support of the said view Accordingly, the Tribunal held that the order passed by the Income Tax Officer declining to condone the delay in the filing of the application for registration and consequently rejecting the prayer for the grant of registration was to be considered as one passed under S.185(l)(b) of the Act and hence an appeal against such an order lay to the Appellate Assistant Commissioner. The preliminary objection raised by the department was therefore overruled by the Tribunal. On the merits of the appeal the Tribunal held that the assessee had made out sufficient cause for the delay in filing the application and hence the prayer for condonation of the delay deserved to be granted. The preliminary objection raised by the department was therefore overruled by the Tribunal. On the merits of the appeal the Tribunal held that the assessee had made out sufficient cause for the delay in filing the application and hence the prayer for condonation of the delay deserved to be granted. Accordingly, the Tribunal allowed the appeal and directed the Income Tax Officer to consider the assessee's prayer for the grant of registration on the merits. Annexure 'E' is a copy of the said order of the Tribunal dated 30-8 1977. 5. Although it was strongly urged before us by counsel for the Revenue that the Tribunal is not right in its view that under the scheme of the provisions contained in the Act relating to the grant of registration to firms, the only provision which envisages an order being passed by the Income Tax Officer is S.185 and that S.184 (4) does not envisage any order being passed thereunder, we do not feel called upon in this case to go into the said question. Even if we assume for the purpose of discussion that counsel for the Revenue is right in his contention that S.184 (4) contemplates an order being passed thereunder either allowing or rejecting the prayer for condonation of the delay in presentation of an application for registration of a firm and that no appeal is provided for by the statute against such an order, the order Annexure 'A' passed by the Income Tax Officer in the case before us is one specifically expressed by him to be one passed under S.185 (1) (b) of the Act. It is a well established principle that where a court or tribunal acts under an appealable provision of law and passes an order, a party is not deprived of the right of appeal, though on facts the order should not have been passed under that provision. The right of appeal depends on what the court or Tribunal actually does, and not what it should have done - see Hurrish Chunder Chowdhry v. Kalisundery Debi (ILR. 9 Calcutta 482 (P. C )), Abdul Rahiman Saheb and another v. Ganapathi Bhatta (ILR. 23 Madras 517), Muthiah Chettiar v. Krishna Doss Varu (AIR. 1921 Madras 599), Oor Navakkan v. Arunachala Chettiar (AIR. 1948 Madras 245), Ganga Das v. Mt. Gopti (AIR. 1960 Rajasthan 245), and Sohan Singh v. Jawala Singh ( AIR. 9 Calcutta 482 (P. C )), Abdul Rahiman Saheb and another v. Ganapathi Bhatta (ILR. 23 Madras 517), Muthiah Chettiar v. Krishna Doss Varu (AIR. 1921 Madras 599), Oor Navakkan v. Arunachala Chettiar (AIR. 1948 Madras 245), Ganga Das v. Mt. Gopti (AIR. 1960 Rajasthan 245), and Sohan Singh v. Jawala Singh ( AIR. 1973 Punjab & Haryana 52). 6. Counsel for the Revenue relied on the ruling of the Privy Council in Commissioner of Income Tax, Bombay Presidency & Aden v. Khemchand Ramdas (6 ITR. 414), but that decision is clearly distinguishable. All that is held by their Lordships of the Privy Council in that case was that a party will not be deprived of the right of appeal to which he is under law entitled by reason merely of the fact that the order complained against, which in its true nature is appealable, was purported to have been made under an unappealable provision. 7. Applying the principle laid down in the rulings first cited (Hurrish Chnnder Chowdhry v. Kalisundery Debi ILR. 9 Calcutta 482 (P.C.) , Abdul Rahiman Saheb and another v Ganapathi Bhatta ILR. 23 Madras 517 etc. it has to be held that since the Income Tax Officer has passed the order Annexure 'A' specifically in the exercise of his powers under S.185 (1) (b), the appeal filed by the assessee before the Appellate Assistant Commissioner was maintainable under S.246 (J) of the Act.] 8. We accordingly answer the question referred in the affirmative i.e. in favour of the assessee and against the department. There will be no direction regarding costs. A copy of this judgment, under the seal of this Court and the signature of the Registrar will be forwarded to the Tribunal, as required by law.