1992 (11) TMI 146 - AT - Income Tax

Appeals Dismissed Due to Delay: Firm's Representative Authorized to Appeal

Jyothi Tin And Allied Industries. Versus Income-Tax Officer.

Jyothi Tin And Allied Industries. Versus Income-Tax Officer. - ITD 044, 743, Issues Involved:1. Validity of assessment orders due to inordinate delay in communication.2. Maintainability of the appeal filed by an unauthorized person.Detailed Analysis:Issue 1: Validity of Assessment Orders Due to Inordinate Delay in CommunicationThe primary contention raised by the assessee was that the assessment orders for the years 1966-67, 1967-68, 1970-71, and 1971-72 were communicated after an inordinate delay of 14 to 17 years, rendering them invalid and unenforceable. The assessee cited two decisions from the Andhra Pradesh High Court, namely Khetmal Parekh & Co. v. State of A.P. [1976] 38 STC 531 (AP) and M. Ramakrishnaiah & Co. v. State of A.P. [1976] 38 STC 537 (AP), to support their argument. However, these decisions were distinguished on the grounds that they pertained to the Andhra Pradesh General Sales Tax Act and were specific to executive authorities, not quasi-judicial authorities like the Income-tax Officer.The Tribunal referenced multiple decisions under the Indian Income-tax Act, 1922 and 1961, which held that delays in serving assessment orders do not affect their validity. The Tribunal cited N. Subba Rao v. Third ITO [1963] 48 ITR 808 (Mysore High Court), which stated that the absence of a statutory limitation period for issuing a notice of demand under section 29 means that delays do not invalidate the assessment order. Similarly, the Calcutta High Court in CIT v. Kamani Industrial Bank Ltd. [1978] 113 ITR 380 held that there is no statutory limit for issuing a notice of demand, and delays do not invalidate the assessment.The Tribunal found tangible evidence showing that assessment orders for the years 1966-67, 1970-71, and 1971-72 were dispatched to the assessee within a reasonable time. For the year 1967-68, although there was no evidence of timely service, the Tribunal held that delays do not invalidate the assessment order based on the cited legal precedents.Issue 2: Maintainability of the Appeal Filed by an Unauthorized PersonThe Departmental Representative challenged the maintainability of the appeals on the grounds that Shri Poonamchand Toshniwal, who filed the appeals, was not a partner in the firm and thus had no authority to file appeals on behalf of the assessee firm. According to section 140(cc) of the Income-tax Act and Rule 45(2)(cc) of the Income-tax Rules, an appeal for a firm must be signed by the managing partner or, in his absence, by any partner not being a minor.The Tribunal examined whether a guardian of a minor partner could file an appeal. Shri Poonamchand Toshniwal argued that minors admitted to the benefits of a partnership have a right to challenge assessments affecting their interests, and their guardian could sign the appeal on their behalf. The Tribunal considered the Calcutta High Court decision in CIT v. Southern Bank Ltd. [1979] 120 ITR 92, which allowed a successor in interest to continue appeals.Given that Shri Poonamchand Toshniwal had undertaken to pay the income-tax arrears on behalf of the minors and other partners as per the dissolution deed, the Tribunal concluded that he stepped into the shoes of the partners. Thus, he was competent to file the appeals. The Tribunal distinguished the Calcutta High Court decision in CEPT v. Ramnath Bajoria [1951] 19 ITR 79, which was relied upon by the Departmental Representative, as not applicable in this context.Conclusion:The Tribunal dismissed the appeals on merits, holding that the delay in serving the assessment orders and demand notices did not invalidate the assessments. However, it recognized the competence of Shri Poonamchand Toshniwal to file the appeals on behalf of the firm due to his obligations under the dissolution deed.