1980 (11) TMI 12 - HC - Income Tax

Court Applies Limitation Act to Tax Appeal Rule, Orders Review

The court held that Section 5 of the Limitation Act, 1963, applies to appeals filed under Rule 86 of the Second Schedule to the Income Tax Act, 1961, even ... Power To Condone Delay In Appeal Issues Involved:1. Applicability of Section 5 of the Limitation Act, 1963, to appeals filed under Rule 86 of the Second Schedule to the Income Tax Act, 1961.2. Validity of the sale of agricultural lands conducted by the Tax Recovery Officer (TRO).3. Power of the Tax Recovery Commissioner to condone the delay in filing an appeal.Issue-wise Detailed Analysis:1. Applicability of Section 5 of the Limitation Act, 1963:The core issue in this writ petition is whether Section 5 of the Limitation Act, 1963, applies to appeals filed under Rule 86 of the Second Schedule to the Income Tax Act, 1961. The petitioner contended that Section 29(2) of the Limitation Act applies Sections 4 to 24 of the Limitation Act to all cases where a period of limitation is prescribed by a special or local law, unless expressly excluded. The Tax Recovery Commissioner rejected this argument, stating that the Limitation Act applies to courts, not to authorities like the Tax Recovery Commissioner. The court, however, disagreed with the Tax Recovery Commissioner, relying on precedents such as Vasanji Ghela & Co. v. State of Maharashtra and Radheshyam v. Maharashtra Revenue Tribunal, which held that Section 5 of the Limitation Act could apply to proceedings before authorities that are not courts, provided the special or local law does not expressly exclude its application.2. Validity of the Sale of Agricultural Lands:The petitioner argued that the sale of agricultural lands was invalid due to material irregularities and illegalities. Specifically, the sale was conducted within 30 days from the date of proclamation, violating Rule 55, and a larger property was sold to recover a meager amount, violating Rule 52. The TRO rejected the application for setting aside the sale, stating that the petitioner did not prove substantial injury due to irregularity and did not deposit the recoverable amount in time. The court did not delve into the validity of the sale, as it resolved the case on the applicability of Section 5 of the Limitation Act.3. Power of the Tax Recovery Commissioner to Condon the Delay:The Tax Recovery Commissioner held that he had no power to condone the delay in filing the appeal, as Rule 86 did not grant such power, and Section 5 of the Limitation Act was inapplicable. The court found this view incorrect, citing judicial consensus that Section 29(2) of the Limitation Act makes Sections 4 to 24 applicable to special or local laws unless expressly excluded. The court referenced multiple judgments, including Raghunath Agarwalla v. State of Orissa, which supported the applicability of Section 5 to authorities other than courts.Conclusion:The court concluded that the Tax Recovery Commissioner erred in not considering the application for condonation of delay on its merits. The writ petition was allowed, quashing the Commissioner's order, and directing him to dispose of the application on its merits. The court did not address the validity of the sale due to its resolution on the primary issue of the Limitation Act's applicability. No order as to costs was made.