High Court Of Delhi
J.K. Synthetics Ltd. vs. Income Tax Appellate Tribunal
Sections 254(3), 256(1), 256(2)
B.N. Kirpal & D.K. Jain, JJ.
Civil Writ Petn. No. 78 of 1991
22nd March, 1991
Counsel Appeared
M. S. Syali & Mrs. Mathur, for the Petitioner : Rajendra, R. C. Pandey & R. N. Verma, for the Respondent
B. N. KIRPAL, J.:
The short question which arises for consideration in this writ petition is whether the application under s. 256(1) of the IT Act, 1961, filed by the CIT was within time. By order dt. 25th April, 1989, passed by the Tribunal (hereinafter referred to as. “the Tribunal”), the appeals filed by the Department against the orders of the CIT(A) were dismissed. These appeals had been filed by the ITO before the Tribunal because the CIT(A) had deleted the penalty of Rs. 12 lakhs which had been levied on the petitioner herein by the ITO under s. 271(1) (c) of the Act.Under the provision of s. 254(3), the aforesaid order dt. 21st April, 1989, was served on the Chief CIT, New Delhi, on 28th April, 1989. The Chief CIT, in his turn, served the said order on the CIT, Delhi (Central I), on 14th Aug., 1989. By reckoning the period of 60 days within which the reference application has to be filed, the CIT, Delhi (Central-I), filed an application under s. 256(1) on 12th Oct., 1989.
On the hearing of the application under s. 256(1), an objection was raised by the petitioner herein before the Tribunal to the effect that the application under s. 256(1) was barred by time. By the impugned order dt. 5th Dec., 1989, the Tribunal came to the conclusion that the limitation had to be reckoned from 14th Aug., 1989, when service was effected on the CIT (Central I), New Delhi, and not w.e.f. 28th April, 1989, when service had been effected on the Chief CIT. It is this part of the order of the Tribunal which is sought to be challenged before us in this petition under Art. 226 of the Constitution.
2. Learned counsel for the petitioner has vehemently contended that when the Tribunal decides the appeal and passes an order under s. 254, then a choice is given under sub-s. (3) of s. 254 as to on whom the order should be served. Prior to 1st April, 1988, sub-s. (3) of s. 254 required the Tribunal to send a copy of its order to the assessee and to the CIT. It is only by virtue of the Direct Tax Laws (Amendment) Act, 1987, that, w.e.f. 1st April, 1988, the words “Chief CIT” have also been inserted in s. 254(3). It is submitted by Mr. Syali that the purpose of amending s. 254(3) would be rendered completely redundant if, for the purpose of determining the period of limitation under s. 256(1), the date of service on the Chief CIT is to be ignored. Explaining the historical background, it was submitted that the Tribunal was finding it difficult to serve its orders on the relevant CIT, Due to frequent changes in jurisdiction, which changes were never or seldom intimated to the Tribunal, it was not known as to who was the CIT who had administrative charge over the ITO who had filed the appeal decided by the Tribunal. In order to obviate this difficulty, the legislature amended s. 254(3) and the result of this was that orders could be served either on the CIT or on the Chief CIT. The purpose of amending the said sub-section clearly was to enable the Tribunal to effect valid service. There can be no doubt that s. 254(3) was amended so as to enable the Tribunal to serve a copy of its order either on the Chief CIT or the CIT. But, in the present case, we are not concerned with the service of order under s. 254(3). What we have to consider is whether the reference application under s. 256(1) has been filed within the period of limitation. Unlike s. 254(3), there has been no amendment in s. 256(1) or s. 256(2). Under s. 256(l), it is the assessee or the CIT who may “within 60 days of the date upon which he is served with notice of an order under s. 254” file an application seeking a reference to the High Court. The words “Chief CIT” are conspicuous by their absence in s. 256. In effect, what Mr. Syali wants us to do is to read the words “Chief CIT” in s. 256(1). To put it differently, the amendment which has been made w.e.f. 1st April, 1988, in s. 254(3) is sought to be read into s. 256(1). In our opinion, this cannot be permitted. Even though the purpose of amending s. 254(3) may have been to see that valid service, for the period of limitation, is effected on the Chief CIT, for computing the period of limitation, we are constrained to confine our attention only to s. 256(1). The legislature, by design or by accident, has not provided for service on the Chief CIT to be regarded as a valid service for the purpose of computing the period of limitation under s. 256(1). The said provision is clear and unequivocal and it is only when either the assessee or the CIT is served with the notice of an order under s. 254 that they can, thereafter, file an application under s. 256(1). Similar contention had been raised before us in ITC No. 25 of 1990. CIT vs. Arvind Construction Co. P. Ltd. (1991) 94 CTR (Del) 211 : (1992) 193 ITR 330 (Del) : TC55R.689. In that case, the order under s. 256(1) had been served on the Chief CIT. Thereafter, the CIT had filed an application under s. 256(2) and it was contended by the assessee that the date of service on the Chief CIT would be the starting point of limitation. On a correct interpretation of s. 256(2), which is in pari materia with the provisions of s. 256(1), we came to the conclusion, vide our order dt. 24th Jan., 1991, that what was material was the service on the CIT concerned and not service on the Chief CIT. It is the CIT alone who has the jurisdiction to file an application either under s. 256(1)or under s. 256(2) and, therefore, it is imperative that it is he who should be served with a copy of the order under s. 254 or under s. 256(1), as the case may be, for the purpose of computing the period of limitation.
For the aforesaid reasons, we do not find any merit in this writ petition and the same is, accordingly, dismissed.
[Citation: 193 ITR 333]
