2007 (1) TMI 112 - HC - Income Tax

Section 5 of Limitation Act Applies to Income Tax Appeals, Permits Delay Condonation u/s 260A.

The Full Bench held that Section 5 of the Limitation Act, 1963, applies to appeals filed under Section 260A of the Income-tax Act, 1961. The court ... Applicability of section 5 of the Limitation Act, 1963 to appeals under section 260A of the Income-tax Act, 1961 - Exclusion by necessary implication - Section 29(2) of the Limitation Act - interplay between special law and the Limitation Act - Application of the Code of Civil Procedure to appeals under section 260AApplicability of section 5 of the Limitation Act, 1963 to appeals under section 260A of the Income-tax Act, 1961 - Exclusion by necessary implication - Section 29(2) of the Limitation Act - interplay between special law and the Limitation Act - Application of the Code of Civil Procedure to appeals under section 260A - Section 5 of the Limitation Act, 1963 applies to appeals filed under section 260A of the Income-tax Act, 1961. - HELD THAT: - The Court held that the existence of a special limitation period in section 260A(2)(a) (120 days) does not, by itself, imply exclusion of section 5 of the Limitation Act. Section 29(2) permits the provisions of the Limitation Act (sections 4 to 24) to apply to matters governed by a special law unless expressly or necessarily impliedly excluded; such exclusion is not to be lightly inferred. Section 260A(7) makes the provisions of the Code of Civil Procedure relating to appeals applicable to appeals under section 260A 'as far as may be', demonstrating that section 260A is not an exhaustive code displacing ancillary procedural provisions. The use of the word 'shall be filed' and the provision of a specific (longer) limitation period do not demonstrate a clear legislative intention to exclude the High Court's power to condone delay under section 5. Fairgrowth Investments Ltd. (concerning a special court with express overriding/non obstante provisions and express condonation power) was distinguished as its rationale does not extend to section 260A, which lacks any overriding provision or express exclusion. The Court relied on established precedent (including Mukri Gopalan) and consistent High Court and other decisions holding that section 5 applies to appeals and references to the High Court under special statutes, concluding that there is no language in section 260A or the Income-tax Act to infer exclusion of section 5 by necessary implication. [Paras 11, 13, 21, 25]Section 5 of the Limitation Act, 1963 applies to appeals under section 260A of the Income-tax Act, 1961; the condonation application may be considered by the appropriate Bench.Final Conclusion: The Full Bench held that section 5 of the Limitation Act, 1963 applies to appeals under section 260A of the Income-tax Act, 1961 and directed the miscellaneous civil application for condonation of delay to be placed before the Bench taking up tax matters. Issues Involved:1. Applicability of Section 5 of the Limitation Act, 1963, to appeals filed under Section 260A of the Income-tax Act, 1961.Detailed Analysis:Issue 1: Applicability of Section 5 of the Limitation Act, 1963, to Appeals Filed Under Section 260A of the Income-tax Act, 19611. Formation of Full Bench:- The Division Bench requested the Chief Justice to constitute a larger Bench to decide whether Section 5 of the Limitation Act, 1963, applies to appeals filed under Section 260A of the Income-tax Act, 1961. Consequently, a Full Bench was constituted.2. Background:- The Revenue filed an appeal under Section 260A against an order by the Income-tax Appellate Tribunal, which was delayed by 11 days. The Revenue sought condonation of the delay, which the assessee opposed, arguing that Section 5 of the Limitation Act is excluded by necessary implication.3. Arguments by Assessee:- The Income-tax Act is a complete code, exhaustive in all respects, including appeals and their limitation periods.- Section 260A provides a specific limitation period of 120 days, implying the exclusion of Section 5 of the Limitation Act.- The collection of revenue should not brook delay, indicating the Legislature's intention to exclude Section 5 by necessary implication.- Senior counsel relied on various Supreme Court judgments to support the proposition that Section 29(2) or Section 5 of the Limitation Act is excluded by necessary implication.4. Arguments by Revenue:- The Income-tax Act is a consolidated and amending Act, not a complete code in itself.- Section 260A(7) incorporates provisions of the Civil Procedure Code relating to appeals, implying that Section 5 of the Limitation Act applies.- Other sections of the Income-tax Act provide for condonation of delay explicitly, but for appeals under Section 260A, Section 29(2) of the Limitation Act applies, making explicit provision unnecessary.- Counsel for the Revenue cited several decisions supporting the applicability of Section 5 of the Limitation Act.5. Legal Provisions and Interpretations:- Section 29(2) of the Limitation Act applies if:1. A special or local law prescribes a different period of limitation.2. The special/local Act does not expressly exclude the application of the Limitation Act.- The Supreme Court in Mukri Gopalan and Fairgrowth Investments Ltd. clarified that exclusion by necessary implication must be clear and unequivocal.6. Analysis of Section 260A:- Section 260A is not exhaustive as it incorporates provisions of the Civil Procedure Code relating to appeals, indicating that it is not a complete code.- The use of 'shall be filed' in Section 260A(2) does not imply the exclusion of Section 5 of the Limitation Act.- The High Court, being a superior court, inherently possesses the power to condone delays unless explicitly excluded.7. Relevant Case Law:- The Supreme Court in State of Goa v. Western Builders held that in the absence of a prohibition, Section 14 of the Limitation Act applies to the Arbitration and Conciliation Act, 1996.- The Calcutta High Court in CIT v. Anandilal Poddar and Sons Ltd. held that Section 5 of the Limitation Act applies to appeals under Section 260A.- The Delhi High Court in Prem Chand Bansal and Sons v. ITO held that Section 5 of the Limitation Act applies to applications under Section 256(2) of the Income-tax Act.8. Conclusion:- Section 5 of the Limitation Act, 1963, applies to appeals filed under Section 260A of the Income-tax Act, 1961.- The application for condonation of delay should be considered by the Bench handling tax matters.This detailed analysis comprehensively covers the legal judgment, preserving the significant phrases and legal terminology from the original text.