Chargeability under one tax law does not erase liability under another independent statute; bona fide delay may still be condoned.

Bona fide pursuit of other remedies may constitute sufficient cause for condonation where the taxing statute expressly permits late admission of an appeal, and the appeal may be entertained on that basis. Relief under section 25(3) of the Indian Income-tax Act, 1922, does not by itself exclude liability under the Excess Profits Tax Act, 1940, because the two enactments operate independently unless the statute expressly links them. Chargeability to income-tax under section 4 of the 1922 Act remains the relevant condition for section 5 of the Excess Profits Tax Act, even if the tax was not actually levied or paid. Accordingly, delay may be condoned, but exemption from excess profits tax is not automatic.

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Issues: (i) Whether the Appellate Assistant Commissioner was justified in condoning the delay and entertaining the appeal under the Excess Profits Tax Act; (ii) Whether relief granted under section 25(3) of the Indian Income-tax Act, 1922, automatically excluded liability under the Excess Profits Tax Act.

Issue (i): Whether the Appellate Assistant Commissioner was justified in condoning the delay and entertaining the appeal under the Excess Profits Tax Act.

Analysis: The appeal before the Appellate Assistant Commissioner was treated as an appeal against the refusal of relief consequent on the income-tax proceedings, not merely as a stale challenge to the original assessment. Section 17 of the Excess Profits Tax Act, 1940, permitted an appeal against refusal of relief and also enabled admission beyond time on sufficient cause being shown. The assessee had been pursuing other remedies bona fide before approaching the appellate authority, and that course was relevant to the exercise of discretion on delay.

Conclusion: The delay was validly condoned and the appeal was properly entertained, in favour of the assessee and against the Revenue.

Issue (ii): Whether relief granted under section 25(3) of the Indian Income-tax Act, 1922, automatically excluded liability under the Excess Profits Tax Act.

Analysis: The Income-tax Act and the Excess Profits Tax Act are independent enactments, and the operation of one does not depend on the other unless the statute expressly so provides. Section 5 of the Excess Profits Tax Act, 1940, applies where profits are chargeable to income-tax by virtue of section 4 of the Indian Income-tax Act, 1922; that condition depends on chargeability, not on the actual levy or payment of tax. Relief under section 25(3) was granted to prevent double taxation under the earlier and later income-tax regimes, but it did not alter the character of the profits as chargeable to income-tax for the purpose of the Excess Profits Tax Act.

Conclusion: Relief under section 25(3) did not negate liability under the Excess Profits Tax Act, and the finding of non-liability was incorrect, in favour of the Revenue.

Final Conclusion: The reference was answered partly against the Revenue and partly in its favour, with the appellate authority's condonation on delay sustained but the exemption-based rejection of excess profits tax liability disapproved.

Ratio Decidendi: Where a taxing statute permits condonation on sufficient cause, bona fide pursuit of other remedies may justify delay; and chargeability under one tax enactment does not eliminate liability under another independent enactment unless the latter expressly so provides.

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