2004 (11) TMI 20

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....he mandatory provisions of section 239 of the Act were not amenable to relaxation by the Board through instructions under section 119 of the Act. Interestingly, learned counsel for the assessee as well as the Revenue contended that section 119(2)(b) of the Act specifically conferred such powers on the Board which had not been specifically noticed in Niranjan Dass [2004] 266 ITR 489 (P&H). Learned counsel for the Revenue also pointed out that even the Revenue had not accepted the judgment of this court in Niranjan Dass [2004] 266 ITR 489 and had filed a special leave petition before the Supreme Court. The Division Bench also entertained its doubt about the correctness of the view expressed in Niranjan Dass [2004] 266 ITR 489 (P & H) and referred the following question of law for consideration by a Full Bench: "Whether the conditions prescribed in section 239 of the Income-tax Act, 1961, are amenable to relaxation at the hands of the Central Board of Direct Taxes through instructions under section 119 of the Act?" Mr. P.C. Jain, learned counsel for the assessee, contended as under: Article 245 of the Constitution of India permits the Legislature to delegate various powers....

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....n of India v. Azadi Bachao Andolan [2003] 263 ITR 706 and UCO Bank v. CIT [1999] 237 ITR 889. He also placed reliance on the decision of the Karnataka High Court in Associated Electro Ceramics v. Chairman, CBDT [1993] 201 ITR 501, wherein the contention of the Revenue that if no power had been granted to an Income-tax Officer or any other officer to condone the delay in making a claim, the Board also cannot extend the time, was rejected in view of the provisions of section 119(2)(b) of the Act. He also placed reliance on the following case laws wherein the claim of the assessees for condonation of delay in making the claim of refund under section 119(2)(b) of the Act was considered and not rejected on the ground that no power existed with the Board for condonation of delay: (i) Gujarat Electric Co. Ltd. v. CIT [2002] 255 ITR 396 (Guj); (ii) Dharampal Singh Pall v. CBDT [2001] 250 ITR 629 (MP); (iii) Kusumben M. Parikh v. CBDT [2000] 242 ITR 501 (Guj); (iv) Mysore Sales International Ltd. v. Member, CBDT [1998] 233 ITR 663 (Karn); and (v) Sant Lal v. Union of India [1996] 222 ITR 375 (P&H). Section 237 of the Act reads as under: "237. If any person satisfied the....

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....articular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Commissioner (Appeals) in the exercise of his appellate functions. (2) Without prejudice to the generality of the foregoing power,- (a) the Board may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of the work of assessment and collection of revenue, issue, from time to time (whether by way of relaxation of any of the provisions of sections 139, 143, 144, 147, 148, 154, 155, 158BFA sub-section (1A) of section 201, sections 210, 211, 234A, 234B, 234C, 271 and 273 or otherwise), general or special orders in respect of any class of incomes or class of cases, setting forth directions or instructions (not being prejudicial to assessees) as to the guidelines, principles or procedures to be followed by other income-tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of opinion that it is necessary in the public interest so to do, be published and circulated in the pre....

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....nstructions and directions of the Central Board of Direct Taxes. The proviso to sub-section (1) of section 119 recognises two exceptions to this power. The first, that the Central Board of Direct Taxes cannot require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner. The second, is with regard to interference with the (discretion of the Commissioner (Appeals) in exercise of his appellate functions. Sub-section (2) of section 119 provides for the exercise of power in certain special cases and enables the Central Board of Direct Taxes, if it considers it necessary or expedient so to do for the purpose of proper and efficient management of the work of assessment and collection of revenue, to issue general or special orders in respect of any class of incomes or class of cases, setting forth directions or instructions as to the guidelines, principles or procedures to be followed by other income-tax authorities in the discharge of their work relating to assessment or initiating proceedings for imposition of penalties. The powers of the Central Board of Direct Taxes are wide enough to enable it to grant relaxation from the p....

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....r in other permissible manners as laid down in section 119. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Hard cases which can be properly categorised as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities." The Supreme Court, ultimately held that the only restriction on the power of the Board under section 119 of the Act "is to prevent it from interfering during the course of assessment of any particular assessee or the discretion of the Commissioner of Income-tax (Appeals)". It is true that the aforementioned observations have been made in the context of clause (a) of section 119(2) of the Act but we are of the view that the same shall apply in full force even to clause (b) of the said provision. Clause (a) deals with the power to grant relaxation from the provisions of several sections enumerated therein. Clause (b) deals with power to ....

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....t, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law." The above provision clearly shows that section 5 of the Limitation Act shall apply in cases of special or local laws to the extent to which they are not expressly excluded by such special or local laws. In other words, section 5 of the Limitation Act cannot be resorted to only when it is expressly excluded by a special or local law. Section 239 of the Act has not expressly excluded the application of section 5 of the Limitation Act. In fact, a conjoint reading of sections 239 and 119(2) of the Act clearly shows that the application of section 5 of the Limitation Act to the claims of refund has been specifically included in the Act. Thus, in our view, the power give....