High Court Of Calcutta
CIT vs. Agarwal Hardware Works (P)Ltd.
Sections 253(5) & 260A
18th September, 2000
Ajoy Nath Ray & Ranjan Kumar Mazumder, JJ.
IT Appeal No. 305 of 2000
Mullick, for the Revenue : Bajoria, for the Assessee
BY THE COURT :
This is an application for leave to appeal under s. 260A(1) of the IT Act, 1961, made by the Department against an order of the Tribunal dt. 17th Jan., 2000, refusing to condone the delay of some 8 days made by the Department in preferring the appeal. Mr. Mullick appearing in support of the application sought to raise a point that in fact, there was no delay because service of the order on the appropriate CIT was not made at all as required by s. 253 sub-s. (3) of the said Act.
2. We do not decide the case on this point, and we do not even permit it to be argued, because the Tribunal had no chance even to consider this argument. Sec. 260A(1) reads as follows : “An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law.”
3. We were in some doubt about the order of the Tribunal being at all an order in appeal.
4. Mr. Bajoria appearing for the assessee, however, punctiliously fair as he always is, showed us from the case of Melaram & Sons vs. CIT (1956) 29 ITR 607 (SC) : TC 8R.213 that on the authority of that case it is to be taken to be an order in appeal, on the ratio that a refusal to condone has the effect of confirming in substance the order of the CIT(A).
5. Mr. Bajoria also argued that the present appeal section has been drafted on the basis of s. 100 of the CPC, dealing with second appeals. He pointed out the patent similarities between the several sub-sections of the two sections in the two enactments. He gave us several Supreme Court cases for the proposition that, if the law of condonation of delay is properly appreciated by the Tribunal, then even if it fails to apply such law correctly to the facts of the case, its decision does not become appealable by giving birth to a different question of law. We make reference, amongst all his cases, to the one of Kondiba Dagadu, 1993 (3) SCC 722.
6. Mr. Mullick emphasised on the current legal trend of viewing Departmental delays leniently. He gave us the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 62 CTR (SC) (Allied laws) 23 : (1987) 167 ITR 471 (SC) : TC 8R.375 which was noticed by the Tribunal and also the case of Chandramaniâs, case AIR 1996 SC 1623.
7. Of the questions sought to be agitated in appeal we set out the second one from para 8 of the petition : “(ii) Whether, on the facts and in the circumstances of the case order of the Tribunal refusing to condone the delay of eight days in filing the appeal by the Revenue is perverse ?”
8. In interpreting s. 260A(1) in the case of the West Bengal State Electricity Board vs. Dy. CIT (ITA No. 344 of 2000) [reported at (2001) 165 CTR (Cal) 502] we have already opined that the words “substantial question of law” mean a question of law which affects the substance of the case, e.g. money liability, and not merely those questions which the Court thinks to be somehow specially serious. On this ratio an order refusing to condone delay under s. 253(5), (but not one condoning it) is a substantial question of law, because if the point is decided differently, a confirmed order becomes unsettled and still subject to appeal.
9. The sub-s. 253(5) of the IT Act reads as follows : “253(5). The 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-s. (3) or subs. (4), if it is satisfied that there was sufficient cause for not presenting it within that period.” The satisfaction must be of the Tribunal, and not of the High Court, if the appeal is to be entertained out of time.
10. If on the law stated or applied, and the facts appreciated, as apparent from the order of the Tribunal, it appears that its satisfaction, or the lack of it, has been reached under s. 253(5), then the High Court cannot interfere with it. If, however, the appreciation of facts or the application of the law to such facts is so patently unsupportible as to be called perverse, then there is no finding in reality by the Tribunal under s. 253(5), and in that event the High Court has to interfere. As a matter of law, and of policy decision too, we decide that this point of perversity can and should be taken in a s. 260A(1) application and not in a separate writ. Points of perversity have been entertained by the reference Bench for along time past, to which the appellate Bench is a successor.
11. We are of the opinion that although the Tribunal set out the correct law that each dayâs delay is no longer to be explained, strictly by the Department, it failed to apply such law. It also failed, really to notice, the existence of some explanation, given by the Department, being the time taken for preparation of appeal papers. The Tribunal also sought to distinguish the Katiji case (supra) saying that the Supreme Court condoned “the delay as on the facts”. These are all points of perversity in law. We, therefore, pass an order in terms of prayer (a). We entertain the appeal on the question set out above. We have heard both the sides at length on facts and law, on two days. We treat the appeal as on the dayâs list dispensing with all formalities. We answer the question in favour of the Department. The Tribunal shall now deal with the Departmentâs appeal in accordance with law.
[Citation : 248 ITR 155]