2007 (1) TMI 112 - HC - Income Tax

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

Commissioner of Income-Tax Versus Velingkar Brothers.

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 ... Application for the condonation of delay - delay of 11 days - Whether section 5 of the Limitation Act, 1963, shall apply in case of an appeal filed u/s 260A of the Income-tax Act, 1961 - HELD THAT:- That the Legislature has used the words 'shall be filed' in sub-section (2) means that the limitation for filing the appeal is as provided therein but that does not make section 29(2) of the Limitation Act, 1963, inapplicable. The High Court being the superior court, the power to condone the delay in filing the appeal must be read to be existent, more so by virtue of section 29(2) of the Limitation Act, unless there is clear indication of its exclusion by implication. The use of the word 'shall' and the longer period of limitation (120 days) are not indicators of such exclusion. Nor from the position that section 260A is silent about the applicability of section 29(2), can any justifiable inference be drawn for inapplicability of that provision. What is obvious need not be stated and, therefore, the Legislature may have thought fit that it was not necessary to express specifically about the power of the High Court to condone the delay in view of existence of section 29(2). When the statute is silent, the presumption is not drawn automatically about the exclusion of section 29(2) or for that matter section 5 of the Limitation Act. In our thoughtful consideration of the whole matter there is nothing to indicate that the application of section 29(2) is excluded except providing a special limitation. Section 260A does not necessarily imply the exclusion of sections 4 to 24 of the Limitation Act. Thus, there is an overwhelming line of cases holding section 5 of the Limitation Act applicable to the matters in appeal and reference applications to the High Court under the Indian Income-tax Act, the Customs Act and the Bombay Sales Tax Act. Our conclusion in this regard is in line with these cases. We shall finally conclude thus: Section 5 of the Limitation Act shall apply in case of the appeals filed u/s 260A of the Income-tax Act, 1961. 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.