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2011 DIGILAW 966 (KER)

V. K. Sreenivasan v. Commissioner of Income Tax

2011-09-02

C.N.RAMACHANDRAN NAIR, K.SURENDRA MOHAN

body2011
Judgment C.N. RAMACHANDRAN NAIR, J. 1. These income tax appeals are filed against the orders of the Income Tax Appellate Tribunal declining to entertain the appeals filed on account of inordinate delay in filing the same. Admittedly, two of the appeals were filed with a delay of 1830 days and the third appeal was filed with a delay of 735 days. The appellants’ case is that the Tribunal, without giving a hearing on the delay condonation petitions, proceeded to consider the delay condonation petition, proceeded to consider the delay condonation petition on merit and decided the same against the appellants. Consequently, the Income Tax Appeals got dismissed on account of the delay in filing the same. it is against the orders declining to condone the delay, the appellant has filed these appeals. At the admission stage, the standing counsel for Revenue took notice and we have heard him also. 2. Before proceeding to consider the appellant’s challenge on merits against the orders issued by the Tribunal, we have to first examine whether the appeals are maintainable before the High Court under Section 260A of the Income Tax Act against the orders of the Tribunal declining to condone delay. Since this issue occasionally arises in this Court, we fell the matter requires detailed consideration and decision for guidance to the registry and to the Advocates. Section 260A (1) which provides for filing of appeal to the High Court is as follows: “260A (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal before the date of establishment of the National tax Tribunal if the High Court is satisfied that the case involves a substantial question of law”. 3. What is clear from the above is that the order of the Income Tax Appellate Tribunal that can be appealed against before the High Court, is an order passed in the appeal. Prima facie the order passed on a delay condonation petition is not an order in appeal because unless the delay is condoned, the appeal itself does not get admitted and therefore, the Tribunal has no opportunity to pass orders on the appeal, without admitting it. Prima facie the order passed on a delay condonation petition is not an order in appeal because unless the delay is condoned, the appeal itself does not get admitted and therefore, the Tribunal has no opportunity to pass orders on the appeal, without admitting it. Of course, as a matter of practice, if the delay condonation petitions are dismissed, the Tribunal used to pass orders in the appeals as dismissed which is nothing, but a consequence of orders passed in the delay condonation petitions declining to condone the delay. 4. Section 253 of the Act, which provides for filing of appeal before the Income Tax Appellate Tribunal, states in Sub-clause-(3) of the said section the period within which the appeal has to be filed both by the department as well as by the assessee. What is stated in sub clause-5 of Section 253 which clothes the Tribunal with power to condone the delay is as follows: “253.(5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or subsection (4), if it is satisfied that there was sufficient cause for not presenting it within that period.” 5. It is obvious from the above provision that unless the Tribunal is satisfied about the sufficiency of the ground raised in support of the delay condonation petition, the Tribunal cannot condone the delay and if the delay is not condoned, the appeal does not get admitted. In other words, what Section 253 contemplates is that only an appeal filed in time gets admitted for consideration on merits and a belated appeal gets admitted only condonation petition is filed and the same is rejected by the Tribunal, the appeal does not get admitted and when there is no valid appeal, there is not even a need for Tribunal to pass orders in the appeal. In fact belated appeals need not even be numbered by the Tribunal until Tribunal passes orders allowing delay condonation petitions. However, as a matter of practice, Tribunals number belated appeals also and therefore. Tribunal necessarily has to pass orders dismissing the appeals if the delay condonation petitions filed along with such appeals are dismissed. Section 254(1) provides the procedure for disposal of appeals admitted by the Tribunal, either as filed in time or belated appeals admitted after condonation of delay. However, as a matter of practice, Tribunals number belated appeals also and therefore. Tribunal necessarily has to pass orders dismissing the appeals if the delay condonation petitions filed along with such appeals are dismissed. Section 254(1) provides the procedure for disposal of appeals admitted by the Tribunal, either as filed in time or belated appeals admitted after condonation of delay. Sub clause 1 of Section 254 says as follows: “254.(1) The Appellate Tribunal may after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.” 6. What is stated above is that the Appellate Tribunal, after hearing both parties to the appeal, can pass appropriate orders thereon which they consider fit. Whatever be the order of the Tribunal in the appeal, on order to be treated it as an order under section 254(1), it has to be passed in a valid appeal that is one filed in time, or one admitted by the Tribunal after condoning delay in filing it. Therefore, the orders appealable to the High Court referred to in Section 260A(1) are only orders passed by the Tribunal in the appeal under Section 254(1) of the Act and so much so, the orders passed by the Tribunal in the delay condonation petitions under Section 253(5) of the Act cannot be appealed against to the High Court under the above provision. Consequently, we hold that the above appeals are not maintainable before this Court. We, accordingly, dismiss the appeals as not maintainable under Section 260A of the Income Tax Act. There will be a direction to the Registry to take note of this judgment and not to number the appeals filed against the orders of the Tribunal declining to condone the delay in filing the appeals.7. Even though a statutory appeal under Section 260A is not maintainable against the orders of the Tribunal declining to condone the delay, the aggrieved person can probably invoke the jurisdiction of the High court Articles 226 and 227 of the Constitution and probably, in appropriate cases, the High Court can grant relief. The appeals are dismissed with the above observations.