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1985 DIGILAW 465 (DEL)

DIN DAYAL v. I. T. APP. TRIBUNAL

1985-12-12

D.K.KAPUR, S.RANGANATHAN

body1985
S. Ranganathan ( 1 ) LOOKED at in the above back ground, line of reasoning in support of the decision of Tribunal in the cases under appeal is easily discernible. Under the scheme of the Act, wherever a time limit is provided for the making of an application or the preferment of an appeal and the legislature intends that any delay in the making of such an application or preferment of such an appeal may be condoned, it says so expressly. In some situations such as in sections 146 and 154, the legislature does not presumably intend any delay being condoned at all. In other situations, such as in Ss. 249, 253 and 264, a very wide discretion to condone the delay is given to the appropriate tribunal. In yet other situations, such as in S. 256 (1), there is a provision for condonation of delay but only upto a specific extent. So far as Ss. 269 G and H are concerned, the statute exprely provides that any application for condonation of delay must be preferred before the expiry of the period of 45 days, 30 days or 60 days as the case may bs. In the cases under appeal, it is common ground that the appeals as well as condonation applications were presented beyond the period mentioned in S. 269 G (l ). That being so, the Tribunal held, under the scheme of the Act, it was clear that it had no power to condone the delay and the appeals had to be dismissed, even though it also found as a fact, in ITSA 4 and 5, that there was sufficient cause for the delay in the making of the application by the assessee. The question is whether this view taken by the Tribunal is correct. ( 2 ) TO start with, there can be no quarrel with the settled proposition that a right of appeal is not an inherent right but is one that is conferred by statute and has to be exercised strictly in conformity with the statutory provisions which create it. If the statute limits the time within which an appeal can be filed, it has to be filed within the period so limited. Any power of condonation of delay in doing so has to be tracej either to the provisions of the special statute under consideration or to the provisions of the Limitation Act, 1963. If the statute limits the time within which an appeal can be filed, it has to be filed within the period so limited. Any power of condonation of delay in doing so has to be tracej either to the provisions of the special statute under consideration or to the provisions of the Limitation Act, 1963. Under the Indian Income-tax Act, 1922 as well as under the 1961 Act, there have been a number of decided cases which have consistently held that a delay in the making of an application or the filing of an appeal for which a period of limitation is prescribed under the Act can be condoned only if there is a specific provision in the special Act itself enabling such condonation and that, in the absence of such a specific provision, the general provisions of the Limitation Act cannot be relied upon to seek such condonation. An extreme example of this may b; given. As pointed out earlier, S. 146 of the Income Tax Act makes no provision for condonation of delay and it has been held, quite recently and following earlier decision, that an application for setting aside an exparte assessment filed beyond the period of one month mentioned in Section 146 cannot be entertained, vide C. I. T. vs. Gupta and Sons Pvt. Ltd. (1984) 146 ITR 506. So also, u/s 66 1) of the Income-tax Act, 1922, an application seeking reference to the High Court had to be preferred before the Tribunal within 60 days of the date of service of the appellate order and there was no provision for condonation of delay. A large number of cases held that neither tlie Tribunal nor the High Court had any power to condone any delay in making such an application on any ground whatsoever. These cases are collected in footnote 15 at page 1151 of Vol. 1 of the 7th Edition of K-anga and Palkiwala on the Law and Practice of Income-tax. This line of decisions is also strongly relied upon on behalf of the Department to support the conclusion arrived at by th; Tribunal. It is argued that the Income-tax Act is a special enactment which is a completely self-contained code and it is not permissible to invoke the provisions of the Limitation Act in order to seek a relief which does not find specific mention in the Income-tax itself. It is argued that the Income-tax Act is a special enactment which is a completely self-contained code and it is not permissible to invoke the provisions of the Limitation Act in order to seek a relief which does not find specific mention in the Income-tax itself. [in paras 15 to 19, arguments and authorities are briefly noted and held as not relevant] ( 3 ) WE have heard the learned counsel at great length having regard to the importance and the possibility of frequent recurrence of the issue involved. We are of the opinion that a decision on this issue should be based entirely on the interpretation to be placed on S. 269 G (l) in the context and scheme of various provisions of the Income-tax Act, 1961. In our view, it is not necessary to travel to the wider issues that were raised by the counsel for the appellant. We do not, therefore, propose to deal in detail with the provisions of the Indian Income-tax Act, 1922 and 1961 or the numerous decisions thereon which have been rendered in different context. We do not propose to dwell upon the impact of the modifications affected by S. 29 of the Limitation Act, 1963 and the corresponding provision of the earlier enactment. We do not also wish to discuss the question whether the language of the new 8. 29 (2) is wide enough to attract the provisions of S. 5 of the Limitation Act to proceedings not before a Court but before a Tribunal, as one possible view is that S. 29 (2) only enables the application of Section 5 to appeals and applications under special or local laws but contains nothing to enlarge the applicability of S. 5 which is, on its terms, applicable only to courts. We shall assume for the purposes of these cases (i) that the provisions of Section 29 (2) of the Limitation Act can be invoked for interpreting the provisions of the Income-tax Act, 1961; (ii) that this provision is attracted not only in respect of proceedings before courts but also in respect of proceedings in Tribunals like the Income-tax Appellate Tribunal; and (iii) that, therefore, the provisions of Sections 4 to 24 of the Limitation Act will apply in so far as and to the extent to which they are not expressly excluded by the provisions of the Income-tax Act, 1961. ( 4 ) GRANTING these premises in favour of the appellant, the short question that comes up for our consideration is as to whether the proviso to S. 269 G (l) can be said to expressly exclude the application of S. 5 of the Limitation Act in regard to appeals before the Tribunal under that section. This question involves two aspects which we now proceed to discuss. ( 5 ) THE first aspect is whether the application of S. 5 of the Limitation Act can be said to be excluded by S. 269 G unless the latter Section refers specifically to the former section and expressly excludes its applicability. On this aspect it is now well established that, in order to exclude the application of any of the provisions of the Limitation Act, that provisions need not beexpressly referred to to and specifically excluded by the special or local laws. What is necessary is to find out whether there is a sufficiently clear indication in the language of the special or local laws which would make the application of the provisions of Sections 4 to 22 of the Limitation Act or any one of them inconsistent with, or redundant to its scheme. Reference may be made in this context to Hukum Dev v. Lalit Narain ( AIR 1974 SC 480 ). Illustrations of provisions which have been considered as excluding the application of Limitation Act are found in Bhagwan Das v. Delhi Administration (AIR 1975. SC 1309) and Mohd. Asfaq v. S. T. A. Tribunal ( AIR 1976 SC 2161 ). A situation in which such exclusion could not be inferred may be seen in Sales-tax Comm. v. M. D. and Sons ( AIR 1977 SC 523 ). In the light of these decisions, it is clear that the provisions of S. 5 may be inapplicable, notwithstanding the absence of any specific reference to it, if such exclusion can be spelt out even otherwise having regard to the object of scheme and context of S. 269. ( 6 ) TURNING now to the second aspect, the short point to be considered is whether, in the context of S. 269 G and having regard to the scheme of the Income-tax Act, the provisions of S. 5 of the Limitation Act are or are not intended to be applicable. ( 6 ) TURNING now to the second aspect, the short point to be considered is whether, in the context of S. 269 G and having regard to the scheme of the Income-tax Act, the provisions of S. 5 of the Limitation Act are or are not intended to be applicable. Having considered the matter carefully from all aspects, we have come to the conclusion that the scheme, context and language S. 2 9 G exclude the applicability of S. 5 of the Limitation Act. We say so, primiarly, on three grounds: ( 7 ) IN the first place, a perusal of the various sections of Income-tax Act, which contain provisions of this nature and which have been extracted earlier, would clearly show that, whether enacted before, 1963 or after 1963, these provisions have clearly touched upon the question of delay in the filing of an appeal or application and provided for the situation in different ways at different places. As already pointed out, in some eases no provision for condonation of delay has been enacted; in certain other places, provisions for condonation on the same lines as S. 5 of the Limitation Act has been introduced and in yet other places, provision for condation of delay exists but the period of delay in respect of which condonation can be granted is limited in some way or the other. It is, therefore, clear that under the scheme of Income-tax Act, the question of condonation of delay has to be decided in the light of the express provitions contained in the Section itself and not on general principles incorporated in the provisions of the Limitation Act. ( 8 ) SECONDLY, though the provisions to S. 269 G and H are somewhat differently worded, they substantlly enact a provision enabling an appellant to file an appeal beyond the time prescribed therefor. The difference in language has become necessary only because the statute contemplates the seeking of an extension of time before the prescribed time has expired and hence the usual statutory language used for condonation as in Ss. 246 249 and 264 is inappropriate. We are unable, therefore, to agree with the learned counsel for the appellants that there is a qualitative difference in the nature of two sets of provisions. 246 249 and 264 is inappropriate. We are unable, therefore, to agree with the learned counsel for the appellants that there is a qualitative difference in the nature of two sets of provisions. ( 9 ) THRIDLY, there is a very important reason why proviso of the nature in question has been introduced in Ss. 269 G and H. These sections occur in Chapter XX A of the Income tax Act. This Chapter provides for the acquisition by the Government of immoveable properties in certain cases of transfer with a view to counter the evasion of tax. It is unnecessary to set out in detail the proviions of this Chapter. It is sufficient to note that where parties purport to transfer propsrty for a stated consideration and that consideration is found to be understated for the reasons contemplated by the statute, the Government has been given a power of acquiring the property and superseding the transfer effected by the parties. In other words, an order of acquisition passed u/s 269 F has got very serious repurcussions in respect of the title to the property. Transfer of title by agreement or transaction between the parties is made to give way to a statutory vesting of title in the Government. It is therefore, of great importance that such an order of Government which affects the vesting of title should reach its finality at a very early point of time. That is why 269 G also emphasises the need for the Sribunal disposing of an appeal filed before it as expeditiously as possible and as far as possible within ninety days from the date on which it is presented. It is further important to see that u/s 269 - I the property vests in the Central Government as soon as may be after the order for acquisition made u/s 269 F (6) becomes final. The order u/s 269 F becomes final in the circumstances set out in the Explanation to S. 2691 (1 ). Under this Explanation in a case where the order of acquisition is not made the subject of an appeal to the Appellate Tribunal u/s 169 G, the order becomes final upon the expiry of the period during which such an appeal may be presented under that Section. Under this Explanation in a case where the order of acquisition is not made the subject of an appeal to the Appellate Tribunal u/s 169 G, the order becomes final upon the expiry of the period during which such an appeal may be presented under that Section. If, on the other hand, an order for acquisition is made the subject matter of an appeal to the Tribunal, the order becomes final when it is confirmed by the Tribunal and there is no further appeal to the High Court from the order of the Tribunnal before the expiry of the period during which such an appeal may be presentad to the High Court. If the order of the Tribunal is made the subject matter of an appeal to the High Court, then the order of acquisition becomes final only when it is confirmed by the High Court. It is only after the order has become final that the property will vest in the Central Governmene and directions can be given by the Competent Authority regarding surrender of delivery of possession to the Competent Authority. In this set of statutory provisions, it will-be appreciated that the legislature found it necessary to impose a rigid time limit within which the appeal is to be filed before the Tribunal or the High Court. In the case of the Tribunal, it provides that norm illy appeal shall be presented within a period of 45 days or 3 days as mentioned earlier. If, however, asessee is not able to present the appeal withit time he is expected to file an application within a period of 45 days or 30 days, It is his inability to do so and requesting for specifying a larger time within which he may allowed to do so The importance of this provisions will be easily recognised in the context of claueses (a) and (b) of the Explanation to the Section. ( 10 ) IT will be appreciated that if S. 5 of the Limitation Act were held to be applicable, as contended for by the assessee, making it possible for an assessee to go to the Tribunal at any time and plead that he had sufficient cause for not filing the appeal within the time specified and that the delay should be condoned, the result will be to render fluid the position regarding the vesting of the property, The same is the position where an appeal is preferred to the High Court. If the assessee s contentions were to be accepted, there would not be any certainty at all regarding the point of time when an order of acquisition becomes final because it will be liable to be set aside by any party either by an application for condonation of dalay filed before the Tribunal or before the High Court or both. This will lead to great confusion and uncertainty in regard to the issue of directions for surrender or delivery of possession with further consequences flowing under the Act. That is why the legislature expressly provided that before the expiry of the period of 45 days or 30 days, there should be an indication as to whether the time for the filing of the appeal has to be extedded or not. If an application in terms of the proviso is presented before the expiry of the said period then the Competent Authority would know when an appeal is likely to be presented; and, as soon as the Tribunal s order is passed, lie will also know the period of time by which the appeal should and would be preferred to the High Court. In other words, the proviso has been deliberately inserted in the peculiar context of the provision with a view to ensure that there is no uncertainty regarding the point of time by which an order of acguisition will become final To hold to the contary would result in utter chaos. As in the present case, the appeal may be preferred long after the period of limitation prescribed by the statute. Where the assessee fails he can prefer an appeal to the High Court and question of condonation of delay may be pendding before the High Court for a long number of years, as indeed, it has been pending in the present case. Where the assessee fails he can prefer an appeal to the High Court and question of condonation of delay may be pendding before the High Court for a long number of years, as indeed, it has been pending in the present case. If such were to be the possibilities of an appeal the whole scheme of the Chapter will become unworkable. We are of the opinion that the proviso to 269 H (1), cannot be interpreted in such a way as to permit the condonation of delay unless an application is preferred before the Tribunal before the expiry of the period of limitation specified. ( 11 ) WE are conscious that the usefulness of the proviso, without a posibility of relaxation by applying S. 5 of the Limitation Act will be very much circumscribed. It can create very great hardships such as, for example where the appellant has an accident while on his way to file an appeal on the last day. All possible causes for delay beyond the prescribed period cannot be anticipated before its expiry and cases where there is justifiable reason for delay may go unprotected. On the other hand, the introduction of the principle of condonation to an application made even after the period may make it impossible to have a time frame within which the appeal should be disposed of and may frustrate, as pointed out earlier, the whole scheme of the acquisition chapter and in particular the purpose S. 2691. In either view, there are bound to be a few hard cases. Both types of difficulties could perhaps have been solved if the section had been so worded as to permit the filing of an application after the expiry of the prescribed period but within a prescribed number of days (say, fifteen) thereafter. But we have to interpret the section as it stands and we think that we should give due effect to the difference in language of the proviso to S. 269 G as compared to the other provisions and its raison detre in the context of the paramount desirability of ensuring expeditious vesting of title to the property in dispute. ( 12 ) FOR these reasons we have come to the conclusion that the Tribunal s view that it was not in a position to condone the delay in the fing of the appeal is correct and should be upheld. ( 12 ) FOR these reasons we have come to the conclusion that the Tribunal s view that it was not in a position to condone the delay in the fing of the appeal is correct and should be upheld. D. K. Kapur J: I agree, but add a few words. The key to the entire question as to whether the limitation period can be extended u/s 5 of the Limitation Act, 1963 rests, in my view, on the language of S. 269-1 (1) of the Income- tax Act, 1961. That Section reads (. . .) ( 13 ) THE most important part of this provision is the date on which property vests in Central Govt. As stated, it vests when the order u/s 269 F (6) becomes final. The Explanation to this Section indicates when it becomes final. This varies with circumstances. It becomes final if no appeal is filed before the Appellate Tribunal u/s 269 G on the expiry of the period during which the appeal could be presented. This means that the vesting of the property is postpond for the period of limitation mentioned in S 269g. When that period is over and no appeal has been filed the property will vest in the Central Government. The period u/s 269g is 45 days from the date of order, or 10 days from the date of service of the copy of the order, wicheveris later. There is a power in the Appellate Tribunal to extend the period of limitation. But, that can be done only by moving an application before the expiry of the prescribed period of 45 days or 30 days, as the case may be. Thus if no application is moved, the property will vest in the Central Government, but if an application is made, the Appellate Tribunal may extend the period and thus the vesting will be postponed. ( 14 ) SIMILARLY, if u/s 269-1, an appeal is presented to the Appellate Tribunal, the vesting is postponed till the appeal is decided. If no further appeal is filed to the High Court u/s 269h, then the vesting will take place. If an appeal is filed to the High Court, then the Explanation shows that the vesting is postponed till the order of acquisition is confirmed by the High Court. If no further appeal is filed to the High Court u/s 269h, then the vesting will take place. If an appeal is filed to the High Court, then the Explanation shows that the vesting is postponed till the order of acquisition is confirmed by the High Court. I completely agree with my learned brother s judgment that these special provisions regarding extension of limitation contained in Ss. 269g and 269h are intended for the purpose of ensuring that the property which is to vest in the Central Government does vest by a particular time. Thus the conclusion is inevitable if no appeal is filed to the Appellate Tribunal within the prescribed period, then the property vests in the Central Govt. If an application for extension of time is made within that time, then the order u/s 269f (6) does not become final till the appeal is heard. If a further appeal is taken to the High Court, the vesting is postponed till the order of acquisition is confirmed by the High Court. If no appeal is filed to the High Court, and here again there is a period of limitation prescribed by S. 269 H, the vesting will take place in accordance with the Appellate order of the Tribunal, which will become final. Thus, the various Provisions in Ss. 269g, 269h and 2691 are inter-related and form a complete Code regarding the date and time when the property vests in the Central Government. The operation of these inter-related provisions shows that the vesting is postponed in accordance with the time stated in the Explanation to S. 269 1 (1 ). I completely agree that this set of provisions has the effect of excluding the operation of S. 5 of the Limitation Act. I also agree that the appeal should he dismissed with no order as to costs.