ASSISTANT COMMISSIONER OF INCOME vs. SHRI VINOD GOYAL NAYAPARA,RAIPUR

^ HIGH COURT OF CHHATTISGARH ATBILASPUR Tax Case (Income Tax Appeal) No.21 of 2007 APPELLANT: Assistant Commissioner of Income - Tax, Circle 1, Bhilai Versus RESPONDENT: Shri Mahavir Prasad Verma, Prop Durga Jwellers, Jawahar Market, Camp-2, Bhilai .T.A.No.49of2003 <-, APPELLANT: Chandra Shekhar Kastwar, S/o Late Shri Kapoorchand Kastwar, Aged about 43 years, r/o Sadar Bazar, Dhamtari, District Dhamtari (CG) Versus RESPONDENTS: 1. 2. 3. Income Tax Officer, Ward Dhamtari, District Dhamtari (CG) The Commissioner, Income Tax, Raipur(eG) Income Tax Appellate Tribunal, Nagpur Bench, Nagpur. Tax Case (Income Tax Appeal) No.08 of 2006 APPELLANT: Assistant Commissioner of Income Tax, Circle 2 (1), Raipur Versus RESPONDENT: M/s Geedam Cold Storage Pvt. Ltd., Opposite Forest Depot, Geedam Road, Jagdalpur (CG) Tax^asellncome Tax Appeal) No.07 of 2006 APPELLANT: Assistant Commissioner of Income Tax,1(2)Raipur. Versus RESPONDENT: M/s Badger Green Field & Finance Pvt. Ltd., Samta Colony, Raipur Ta>LCase_(lncome Tax_ApDeal) No.7 of 2008 APPELLANT: Assistant Commissioner of Income, Circle2-1,Raipur Versus

RESPONDENT: Shri Vinod Goyal Nayapara Raipur I.T.A. No_,13 of 2005 APPELLANT: RESPONDENT: Income Tax Officer-2, Rajnandgaon, District Rajnandgaon, Chhattisgarh. Versus APPELLANT: Shri Mukul Deshlehara, Proprietor of M/s Deshlehara, Udyog, Village Dewada, Tehsil and District Rajnandgaon, Chhattisgarh Tax Case flncome TaxAppeal) No.20 of 2006 Income Tax Officer, Jagdalpur Versus RESPONDENT: Surendra Kumar Kataria, Proprietor, M/s Gaurav Traders, IVIain Road, Keshkal, District Baster (CG) Tax Case (Income TaxApDeal) No.18 of2006 APPELLANT: Income Tax Officer, Jagdalpur Versus RESPONDENT: Surendra Kumar Kataria, Proprietor, M/s Gaurav Traders, Main Road, Keshkal, District Bastar (CG) APPELLANT: AND TaxCase (IncomeTax Appeal) No.19 of 2006 Income Tax Officer Jagdalpur Versus RESPONDENT: Surendra Kumar Kataria, Proprietor, M/s Gaurav Traders, Main Road, Keshkal, District Bastar(CG) Present: Shri S. Rajeshwar Rao, counsel for the appellants in all the appeals and counsel forthe respondent in I.T.A. No.49/2003. Shri Ashish Surana, counselfor the appellantin I.T.A. No.49/2003. Shri Rajendra Tripathi, eounsel for the respondent in Tax Case (Incdme TaxAppeal)No.21/2007.

^ ^ Shri Neelabh Dubey, counsel for the respondent in Tax Case (Income Tax Appeal) No. 7/2006 and 8/2006. Diylsion BencA: Hon'ble Shri Dhirendra MishraS Hon'ble Shri R.N. Chandrakar, JJ. OR D E R (Passed on |^T''June,2009) The followingorderof the Court was passed by Dhirendra Mishra, J. 1. The appellants herein have preferred these appeals under Section 260-A ofthe Income Tax Act, 1961 (in short 'the Act') along with separate applications under Section 5 of the Indian Limitation Act for condonation of delay, as these appeals have been preferred after the prescribed periodof limitation of 120 days from the date on which the orderappealed againstwas received by the appellants asprovided under Section 260-A sub-section 2 oftheAct. 2. Shri Rajeshwara Rao, learned counsel for the Revenue submitted that the Income Tax Act, 1961 and the provisions of Section 260-A are not complete Code in itself. By virtue of sub-section (7) of section 260-A, provisions of the Code of Civil Procedure relating to appeal are applicable to appeal under Section 260-A. Under Order 41 Rule 3-A of the CPC, application for condonationof delay, for condoning the delay in appeal is maintainable and that procedure is applicable to appeal under section 260-A and, therefore, it cannot besaid that Section 5 of the Limitation Act does not apply to appeals under Section 260-A. Specific provisions have been made for condonation of delay under Section 249 and 253 and application underSection 256(1)0fthe IT Act for condoning the delay authorizing such Authorities/Tribunals to condone the delay only because these Authorities/Tribunals are not courts, however, nosuch provision has been made under section 256 (2) and 260 for condoning the delay in filingapplications/appeals to the High Court, as Section 29(2) ofthe Limitation Act is attracted and, therefore, the Legislature did not

feel it necessaryto expressly provide for condonation ofdelay by the High Court. ;' • • :; '. ; ' '! ' 3. Reliance is placed on Full Bench Judgment of the High Courtof Bombay at Goa in the matter of Commissioner of Income Tax Versus Velingkar Brothers and in thecase of CIT Versus AnandilalPoddar & Sons Ltd.,2. 4. On the other hand, Shri Neelabh Dubey Advocate appearing on behalf of the respondents submitted that the Income Tax Act, 1961 is a complete Code in itself. It providesfor all aspects relating to levy and recovery of Income Tax, procedure therefor, remedies including appeals and revisions and penalti&s and prosecution. Section 260-A provides for an appeal to the High Court on substantial question of law. Sub-section 2(a) of Section 260-A providesin mandatory form that the appeal shall be filed before the Tribunal within 120 days and a longer period of limitation, already provided by the Legislature, impliedly excluded the applicability of Section 5 of the Limitation Act. Learned counsel would submit that collection of revenue cannot brook delay and, therefore, the Legislature by providing the different period of limitation, which is longerthan the period oflimitation providedin Article 116ofthe Limitation Act clearly indicates its intention in excluding application of Section 5of the Limitation Act by necessary implication. He further submitted that the legislature consciously omitted the provision relating to condonation of delay in appeal in the High Court as appeals are preferred in the High Court afterthe question in issue has already been considered by three forums. 5. Reliance is placed on the judgment of the Hon'bleSupreme Court dated27 March, 2009 delivered in the matter of Commissioner of Customs and Central Excise Versus M/s Hongo India (P) Ltd., and another in SLP(C) No. 14467/2007. 1 (2007) 209 CTR (Bom) (FB) 8: (2007) 289 ITR 382 (Bom) (FB): (2007) 161 TAXMAN 26.4 (Bom) ^FBL.. .„„„„.„_,.„„,„„„,„„,„. ^... (2005) 199 CTR (Cal) 539: (2005) 279 ITR 104 (Cal)

y 6. We have heard learned counsel for the parties. 7. Chapter-XX of the Act deals withappeals and revisions. Section 249(1) provides for form of appeal. Sub-section (2) of Section 249 provides for limitation of 30 days in filing the appeal before the Commissioner (Appeals). Sub-section (3) empowers the Commissioner(Appeals) to admit the appeal after expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within the period. Section 253 deals with appeals to the Appellate Tribunal. Sub-section (3) of Section253 provides for limitation of 60 days from the date on which the order soughtto be appealed against is communicated to theassessee or to theCommissioner, as the case may be, for filing appeal before the Appellate Tribunal. Under sub-section (5), the Appellate Tribunal may admit the appeal or permit the filing of memorandum of cross objection after expiry of the relevant period if he is satisfied that there was sufficient cause for not presenting itwithin the period. Section 255 (1) lays down the procedure to be followed by the Appellate Tribunal whereas.Section 260-A deals with appeals to the High Court.which reads asunder:- "260A.(1)An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, [before the date of establishment of the National Tax Tribunal] if the High Court is satisfied that thecase involves a substantial question of law. (2) The Chief Commissioner or the Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal underthis sub-section shall be- (a) filed within one hundred and twenty days from the date on which the order appealed against is received by the assessee or ttie Chief Commissioner or Commissioner; (b) Omitted bythe FinanceAct, 1999, w.e.f. 1-6-1999.

(c) in the form of a memorandum of appeal predsely stating therein the substantial question of law invplved. (3) Whetherthe High Court issatisfied that a substantial question of taw is involved in any case, it shall formulate that question. (4) The appeal shatl be heard onlyon the question so formulated, andthe respondents shall, at the hearing of the appeal, be allowed to argue that thecase does not involve such question: Provided that nothing in this sub-section shall be deemed to take away or abridge ttie power of the court to hear, for reasons to be recorded, the appeal on any other substantial question oflaw not formulated by it, if it is satisfied thatthe case involves such question. (5) The High Courtshall decide the question of law formulated and delivered such judgment thereon containing the grounds on which such decision is founded and may award such costas it deems fit. (6) The High Court may determine any issuewhich - (a) has not been determined by the Appellate Tribunal; or ' • ' : . ; , , ,. . (b) has been wrongly determined by the Appellate Tribunal by reasonof a decisionon such question oflaw as is referredto in sub-section (1). , (7) Save as otherwise provided inthis Act.the provisions i of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, applying the caseofappeals underthis section. 8. Sub-section (1) provides for appeal against the order of the Appellate Tribunal to the High Court provided that the High Court issatisfied fhat the case involvessubstantial question of law. Sub-section (2) provides that the appeal is to be filed within 120 days from the date on which the order appealed against is received by the assessee or the Chief Commissioner or Commissioner, as the case may be. Sub-section (3) stipulatesthatthe High Court,if satisfied, may formutate substantial question of law involvedin any case and the appeal

x t-1 is to be heard and decided only on question so formulated. Sub-seetion (7) makes the provisions of CPC, 1908, relating to appeals to the High Court, applicable in case of appeal under thissection only where it is not otherwise provided in the Act. 9. In view of thespecific provisions oftheAct, as detailed hereinabove, question for our consideration is -whether Section 5 ofthe Limitation Act is applicable in respect of appeal filed under Section 260-A of the Act? 10. Shri Rajeshwara Rao, learned counsel for the appellants, contended that in the absence of any specific prohibition in the Act for condoning the delay, particularly.in Section 260-A of the Act, Section 29(2) of the Limitation Act is applicable. He further argued that sub-section (7) of Section 260-A specifically makes the provisions ofCPC in relation to appeal before the High Court applicable and, therefore, as per the provisions of Order 41 Rule 3-A of the CPC the High Court isempowered to entertain and decide anyapplication for condonation of delay in filing the appeal. 11. In the matter of Velingkar Brothers (Supra), the question 'whether Section 5 ofthe Limitation Act, 1963shall apply in case of an appeal filed under Section 260-A of the IT Act, 1961' was referred by the Division Bench to a Larger Bench for adjudication. Answering the reference in affirmative, the full Bench ofthe Bombay High Court held thus:- "Sec.260A itself providesthatthe provisjons ofthe CPC relating to appeals, as far as possible, are applicable to the appeals under S.260A. It would mean that S.260A is not exhaustive of all the facets, aspects and matters with regard to the appeals unders.260A. Itseems that the legislature did notintend to make the provision ofs.260A watertight. The exclusion ofthe provisions ofss.4 to 24 of the Limitation Act as provided ins.29(2) cannot be lightly inferred. Implied exclusion is not readily inferred. Thatthe legislature has used thewords 'shall be filed' in

fK^^wxvsrwuK.' sub-s.(2) means that the limitation for filing the appeal is as provided therein but that does not makes.29(2) of the Limitatibn Act, 1963 inapplicable. The High Court being the superior Court, the power to condone the delay in filing the appeat must be read to be existent, more so by virtue of s.29(2) of the Limitation Act, unless there is clearindication 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 S.260A is silent about applicability of s.29(2), any justifiable inference can be drawn for inapplicability of that provision. What is obvious need not be stated and, therefore, 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 ofexistence ofs.29(2). When the statute is silent, the presumption is not drawn automatically about the exclusion of s.29(2) or for that matter s.5 of the Limitation Act. There is nothing to indicate thatthe application ofs.29(2) is excluded except providing a special limitation. Sec.260A does not necessarily imply the exclusion of ss.4 to 24 of the Limitation Act. Therefore,s.5 of the Limitation Act is applicable incase of the appeals filed under S.260A." 12. In the matter of Anandilal Poddar & Sons Ltd. (Supra) also, the Calcutta High Court.while considering applicability of Limitation Act in appeal before the High Court under Section 260Aof the IT Act, held thatthough Section 260A of the IT Act expressly provides for a periodof limitation for preferring an appeal to the High Court, the same does not imply that the application of ss.4 to 24ofthe Limitation Act is excluded. In order fo exclude the application of ss.4 to 24 within the meaning of s.29 of the Limitation Act, the necessary exclusion must be express andsuch express exclusion is to be inferred by necessary implication from the statute itself. The Court isnot supposed to presume exclusion on account of thestatute being silent in that aspect. It cannot be

^ 4 held that Section 5 of the Limitation Act has no application in respect of appeal preferred under Section260A. l3.The Supreme Court in the matter of M/s Hongo India (P) Ltd., and another (Supra), while dealing with question 'whether the High Court in the reference application under Section 35hl(1) of the unamended Act, has power under Section 5 of the Limitation Act, 1963 fo condone the delay beyond the period prescribed underthe main statute i.e. Central Excise Act', held that the High Court has no power to condone the delay in filing the "reference application" filed by the Commissioner underunamended Section 35M(1) of the Central Excise Act, 1944 beyond the period of 180 days. 14. ShriNeelabh Dubey, learned counsel appearing forthe respondents submitted that though the judgment in the matter of M/s Hongo India (P) Ltd., and another (Supra) is in relation to reference underSection 35H(1)ofthe Central Excise Act, but the relevant provisions under Chapter XX of the Act is pari materia to the provisions of appeal under Chapter VI-A of the Central Excise Act, 1944, therefore, ratio of law laid down in M/s Hongo India (P) Ltd., and another shall apply to any appeal under Section 260A of the Act also. 15.8efore appreciatingtheaboveargument of learned counsel for the respondents, we propose to examine the provisions relating to appeals under Chapter VI-A of the Central Excise Act. As per Section 35, against any order passed by the Central Excise Officer, appeal lies to the Commissioner of Central Excise (Appeals). The appeal is to be preferred within 60 days from the date of communication of such decision to the aggrieved party. Proviso to sub-section (1) enables the Commissioner (Appeals) to allow it to be representedwithin a further period of 30 days if he is satisfiedthat the appellant was prevented by sufficient causefrom presenting the appeal within the aforesaid period of 60 days. Any person aggrieved by the decisions/orders

(5) enables the Tribunal to condone the delay even beyond the prescribed period provided there was sufficient cause for not presenting it within that period. Under Section 35EE, revisionlies to the Central Govemment. Llnder sub-section (2), application undersub-section (1) isto be made within 3 months from the date of communication. Proviso to sub-section (2) enables the revisional authority to condone the delay for a further period of 90 days. Unamended Section 35-G provides for appeal to the High Court. Sub-section 2(a) enables the aggrieved person to file an appeal to the High Court within 180 days from the date on which the order appealed against is received by the aggrieved party. There is no provision to condone the delay in filing the appeal beyond prescribed period of 180 days. Unamended Section 35H provides for reference application to the High Court. Under sub-section(l), the Commissioner of Central Excise or other party within a period of 180 days of thedateon which he isserved with notice ofan order under Section 35C direct the Tribunal to refer to the High Court any question of lawarising from such order ofthe Tribunal. Application for reference is to be made to the High Court within 180 days and there is no provision to extend the period of limitation for filing application to the High Court beyond the said period and condone the delay. l6.After dose scrutiny of the provisions contained in Chapter VI-Aof the Central Excise Act, 1944, we find substance in submission of learned counsel for the appellants that the provisions contained in Chapter VI-Aof the Central Excise Act, 1944, which deals with appeal, is pari materia to the provisions contained in ChapterXXoftheAct.which alsodealswith appeals and revisions under the ITAct.

^^ 17.1n the matterof Ahmedabad Pvt. Primary Teachers' Assn. Versus Administrative Officer and others , the question before the Hon'ble Supreme Court was interpretation of definition of "Employee" as contained in Section 2(e) of the Payment of Gratuity Act, 1972. Interpreting the definition of 'Employee' with the external aid of statutes in pari materia, the Hon'ble Supreme Court observed thus:- "12. We have critically examined the definition clause in thelight of the arguments advanced on either side and have compared it with the definitions given in other labour enactments. On the doctrine of "pari materia", reference to Qther statutes dealing with the same subject orforming part ofthe samesystem is a permissible aid to the construction of provisions in a statute. See the following observations contained in Principles of Statutory Interpretation by G.P. Singh (8th Edn.), Syn.4, atpp.235 to239: "Statutes in parimateria It hasalready been seen that a statute must be read as a whole as words areto be understood in their context. Extension of this rule of context permits reference to other statutes in pari materia i.e. statutes dealingwith the same subject-matter or forming part of the same system. Viscount Simonds in a passage already noticed conceived it to be a right and duty to construe every word of a statute inits contextand he used the word context in its widestsense including 'other statutes in pari materia'. As stated by Lord Mansfield 'where there are different statutes in pari materia though made at different times, or even expired, and not referring to each other, they shall be taken and construed together, as onesystem and as explanatory of each other'. (2004) 1 Supreme Court Cases 755

12 The apptication of this rule of construction has the merit ofavoiding any apparent contradiction between a series of statutes dealing with the same subject; itallows the use of an earlier statute to throw light on the meaning of a phrase usedin a later statute in the same context;it permits the raisingof a presumption, in the absence of any context indicating a contrary intention, that thesame meaning attaches to the same words in a later statute as in an earlierstatute if the wordsare used in similar connection in the two statutes; and it enables the use of a later statute as parliamentary exposition of the meaning of ambiguous expressions in an earlier statute."" . 18.1n the matter of Sirsilk Ltd. Versus Textiles Committeeand others , the Hon'ble Supreme Court while considering as to what statutes are considered to be in par/ maten'a, referred to "Statutes and Statutory Construetion" by Sutherland thus:- "Statutes are considered to be in pari materia to pertain to the same subject-matter when they relate to thesame person or things, or to the same class of persons or thing, or have the same purposeor object. (Statutes and Statutory Consfrucffon, Vol.2, p.535, 3rd edn.)" 19 In the matter of J.K. Steel Ltd., VersusUnion of India andothers , the Hon'ble Supreme Court, whileconsidering pari materia provisions of Central Excises and Salt Act (1944), Sch.l, Item 26AA - TariffAct (1934), Sch.l entry 63 (36), held in paragraph-29 of the judgment that Acts being in pari materia must be takentogether as forming one code and as interpreting and enforcing each other. In para-26 of the above judgment, referring to its earlier judgment in the matter of C.A. Abraham V. I.T.O., Kottayam {AIR 1961 SC 609}, it was observed that 'ln interpreting a fiscal statute the Court cannot proceed to make 1989 Supp (1) Supreme Court Cases 168 AIR 1970 SUPREME COURT 1173

^ good deflciencies ifthere may be any; the Court must interpretthe statute as it stands and in case of doubt in a manner favourable to the tax payer." 20,The Hon'ble Supreme Court after elaborately dealing with the above provisions ofthe Central ExciseAct in detail has negated the argument based onSection 29(2) of the Limitation Act that in absence of any express exclusion of the provisions of Limitation Act in any special law ss.4 to 24 of the Limitation Act would be applicable. It has been observed thus: "In this regard.we have to see the schemeof the special lawhere in this case is Central ExciseAct. The nature of the remedy provided therein are such that the legislature intended itto be a complete Code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clearthat the provisions of the Limitation Act are necessarily exduded, thenthe benefitsconferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that even ina case where the special lawdoes not excludethe provisions ofSections4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the natureof the subject-matter and scheme of the special law excludetheiroperation. In other words, the applicability of theprovisions of the . Limitation Act, therefore, to be judged not from the terms ofthe Limitation Act but by the provisionsof the Central Excise Act relating to filing of reference application to the High Court. The scheme ofthe Central Excise Act, 1944 support the conclusion that the time limit prescribed underSection 35M(1) to make a reference to High Court is absolute andunextendable bycourtunder Section 5 of the Limitation Act. It is wellsettled law that it is the duty of thecourt to respect the legislative intent and by giving liberal interpretation, limitation cannot be extended by invoking the provisions of Section 5 of the Act."

14 zi.We have already reproduced the relevant provisions of the Income Tax Act contained in ChapterXX, which relates to appeals and revisions. We have also pointed out the salient featuresof the provisions under Chapter VI-A, which deals with appeals under the Central Excise Act. Both the acts have been enactedby the Central Legislature. The Central ExciseAct was enacted to consolidate and amend the law relating to central duties on excise whereas, the Income Tax Act, 1961 was enacted to consolidate and amend the law relating to income tax andsupertax. Both the acts are periodically amended through Finance Act to give effect to the financial proposals of the Centra! Government forthe relevant financial yearsand thus have the same purpose and object. Therefore, on the doctrine of "pari materia", reference to Central ExciseAct is a permissible aidto the construction of provisions ofthe Act. 22.As far as the argumentsadVanced by Shri Rajeshwara Rao, learned counsel for the appellants herein basedon judgment of Full Bench ofthe Bombay High Court that sub-sectipn (7)of Section 260A ofthe Act makes the provisions of CPC applicable in relation to appeal to the High Court and, therefore, the Income Tax Act is not a complete Code is concerned, fromperusal of sub- section (9) of Section 35-G of the Central Excise Act, we find that thesame is- exactly identical assub-section (7) of Section 260A ofthe Act. 23. In the matter of Ravulu Subba Rao and others Versus Commissioner of Income Tax,IVIadras , in paragraph-IOit has been heldthatthe Courts must therefore construethe provisions of the Indian Income Tax Act as forming a code complete in itself and exhaustive of the matters dealt with therein, and ascertain what their true scope is. In paragraph-16, it has been further held thus: "To sum up, the Indian .Income Tax Act is a self contained code exhaustive of the matters dealt with AIR1956SC604

^ a^ therein and its provisions show an intention to depart from the common rule, qui facit peralium facitperse. Its intention again is that a firm should be given benefit of S.23(5)(a), only if it is registered under S.26-A in accordance with the conditionslaid down in that section and the rules framed thereunder. And as those rules require the application to be signed by the partner in person, the signature by an agent on his behalf is invalid." 24.Thus, relying upon principlesof law laid down by the Hon'ble Supreme Court in the matter of M/sHongo India (P) Ltd., and another (Supra), we hold that the Income Tax Act, 1961 isa special law. The nature of the remedy provided therein are such thatthe legislature intendedit to be a complete code by itself which alone should govern the several matters provided by it. The scheme of the Income Tax Act, 1961, support the conclusion that time limit prescribed under Section 260A to file anappeal before the High Court is absolute and unextendable by court under Section 5 of the Limitation Act and the limitation cannot be extended by invoking the provisions of Section 5 of the Limitation Act. : • • . 25. Since all the appeals herein have been preferred beyondthe prescribed period of 120 days under Section 260A of the Act, the same are dismissed onthe ground of limitation. No orders as to costs. Sd/- OWrendra Mishra Judge Sd/- R.N. Chandrakar Judge Barve