MINA FUSADE vs. SHIBAJI DASH COMMISSIONER OF INCOME TAX

IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION

WRIT WRIT WRIT PETITION NO. 1256 OF 1999. PETITION NO. 1256 OF 1999. PETITION NO. 1256 OF 1999.

Ms.Mina Fusade,

legal heir of the late

Prince Sayajirao Gaekwar,

having her address at

C/o.M/s.Y.K.Bhagwagar & Co.,

Ador House, 6th Floor,

6, K.Dubash Marg,

Mumbai- 400 001.

... Petitioner.

V/s.

the Commissioner of Income-tax

Mumbai City-XIII, having his

office at Room No.469,

Aayakar Bhavan, Maharshi Karve

Road, Mumbai- 400 020.

Tribunal, constituted by the

Central Government under

Section 252(1) of the Income

Tax Act, 1961 and having its

office at the old CGO Bldg.,

4th floor, Maharshi Karve Road,

Mumbai- 400 020.

... Respondents.

Nitesh Joshi i/b. Arun Sapkal & Co.

for the petitioner.

Ashok Kotangale for the respondents.

CORAM CORAM CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. : V.C.DAGA AND J.P.DEVADHAR, JJ. : V.C.DAGA AND J.P.DEVADHAR, JJ.

RESERVED RESERVED RESERVED ON : ON : ON : 11th October 2005. 11th October 2005. 11th October 2005.

PRONOUNCED PRONOUNCED PRONOUNCED ON : 25th October 2005. ON : 25th October 2005. ON : 25th October 2005.

JUDGMENT JUDGMENT JUDGMENT : : : (Per V.C.Daga, J.)

-------- -------- --------

The petitioner in this petition seeks to

challenge action of respondent No.1 rejecting the CNR No : HCBM020027621999 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 2 -

declaration

made by the Petitioner under Kar

Vivad

Samadhan

Scheme,

1998 ("KVS Scheme" for short)

respect

tax

arrears of late

Prince

Sayajirao

Gaekwar under Wealth Tax Act, 1957 ("Act" for short)

for

the

assessment

years

1969-70

1978-79;

1981-82;

and 1984-85 to 1986-87 contending that the

order

of rejection suffers from non-application

mind and is contrary to the provisions of KVS

Scheme.

Factual Factual Factual Scenario : Scenario : Scenario :

---------------- ---------------- ----------------

The factual scenario giving rise to the

present petition in nutshell is as under:

The petitioner is a legal heir of deceased

Prince Sayajirao Gaekwar (hereinafter referred to as

"the

deceased" for short), who died in France on or

about

7th

May,

1985.

The

petitioner

non-resident, being a citizen of the United Kingdom,

presently residing in Monaco in the South of France.

The respondent No.1 is the Commissioner of

Income-tax,

who

is the designated authority

under

section

87(b)(i)

of the Finance (No.2)

Act,

1998

("Finance Act" for short), vide order-cum-intimation Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 3 -

dated

10th

March,

1999

rejected

the

applications-cum-declarations made by the petitioner

under

KVS

Scheme enacted under Chapter-IV

the

Finance

Act.

The

deceased

had

suffered

best

assessments

under

the

Act,

inter

alia;

for

assessment

years 1969-70 to 1978-79;

1981-82;

and

1984-85 to 1986-87 along with penalties, inter alia;

under sections 18(1)(a); 18(1)(b) and 18(1)(c) of

the Act.

Being aggrieved by

the

aforesaid

assessment

orders,

advised

the

Chartered

Accountant,

the petitioner filed appeals before the

Commissioner of Wealth Tax (Appeals) against all the

assessment orders suffered by the deceased under the

Act

along with applications seeking condonation

delay

in filing appeals.

All the appeals, filed by

the petitioner, against the orders of assessment and

penalties

passed

against deceased under

the

Act,

were

taken

up for hearing by the

Commissioner

Wealth Tax (Appeals)-III, Mumbai, who was pleased to

dismiss

all

appeals by a common order

dated

29th

December,

1998

holding

them

barred

limitation, the copy of which was received by the

petitioner on 1st January, 1999. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

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That prior to the receipt of copy of the

order

rejecting

appeals, the petitioner,

29th

December, 1998, had filed declarations under the KVS

Scheme

with respect to the aforesaid assessment and

the

penalty

orders suffered by the deceased

under

the

Act.

However, the said declarations came to be

rejected

by respondent No.1 by 14 different orders,

all

dated 15th February, 1999 passed under

section

90(1)

the Finance Act holding that the

appeals

giving

rise

the tax arrears were

not

pending

before

the

appellate

authority

the

date

declarations and the petitioner, therefore, was not

eligible for being admitted under the KVS Scheme.

Being aggrieved by the order passed by the

Commissioner

Wealth

Tax (Appeals)

dated

29th

December,

1998, the petitioner filed appeals to the

Income Tax Appellate Tribunal ("Tribunal" for short)

on 21st and 22nd January, 1999 not only against the

refusal to condone delay but also on merits.

On 28th January, 1999, the petitioner

under the cover of her Chartered Accountant’s letter

dated

27th January, 1999, filed fresh

declarations

under the KVS Scheme to settle tax liability arising

under

the orders of assessment and penalty suffered Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

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the

deceased which were subject matters of

the

appeals filed before the Tribunal on 21st and 22nd

January, 1999 as stated hereinabove.

On 16th February, 1999, petitioner’s

Chartered

Accountant made submission to

respondent

No.1

contending that the fresh declarations made by

the petitioner under the KVS Scheme on 28th January,

1999

were

competent,

legal

and

valid

all

respects,

particularly, when such declarations

had

been

filed

the

petitioner

after

presenting

appeals

before

the

Tribunal

21st

and

22nd

January,

1999.

The

petitioner’s

Chartered

Accountant,

therefore, requested respondent No.1 to

issue

certificate in favour of the petitioner under

section

90(1)

of the Finance Act with

respect

declarations

made

on 28th January, 1999 under

the

KVS

Scheme

for the assessment years The

aforesaid

submission

made on

behalf

the

petitioner did not find favour with respondent No.1,

who

was pleased to reject all the declarations made

the petitioner under KVS Scheme by the

impugned

order-cum-intimation

dated 10th March, 1999 holding

that

the appeals filed by the petitioner before the

Tribunal,

against the order of the Commissioner

Wealth

Tax

(Appeals),

rejecting

plea

the Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 6 -

petitioner

for condonation of delay, did not amount

to appeals "pending" against the orders of

assessment.

10.

The aforesaid order dated 10th March, 1999

rejecting

second

declarations dated 28th

January,

1999

made under the KVS Scheme is a subject

matter

of challenge in this petition filed under Article

226 of the Constitution of India.

Submissions Submissions Submissions : : :

----------- ----------- -----------

11.

Mr.Joshi, learned counsel appearing for

the

petitioner

submits

that respondent

No.1

has

grossly

erred

alleging that

the

petitioner’s

appeals

before the Tribunal against the order dated

29th

December, 1998, passed by the Commissioner

Wealth

Tax (Appeals), were only against the

orders

rejecting petitioner’s plea for condonation of delay

such

those appeals were neither appeals in

the

eye

of law nor could they be said to be pending

the

date of declaration made under the KVS

Scheme.

He,

therefore,

submits

that the reason

given

respondent

No.1

for

rejecting

petitioner’s

declarations under KVS Scheme was apparently

erroneous and contrary to the record. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 7 -

12.

According to Mr.Joshi, disqualification

under

section

95(i)(c) of the Finance Act

applies

only

to the case where no appeal is pending

before

the

appellate

authority.

He submits that

the

assessee

has an appeal pending before any appellate

authority,

then

he is eligible for the benefit

KVS

Scheme

irrespective of the grounds

raised

such

appeal.

He,

therefore,

submits

that

even

assuming,

whilst

denying, that the petitioner

had

challenged

the

orders

the

first

appellate

authority

dated

29th

December, 1998 only

the

ground

that

had

erred in

not

condoning

the

alleged

delay

filing such appeals and

not even

then,

the petitioner

could

not

disqualified

under

the

provisions

section

95(i)(c)

the Finance Act.

his

submission,

there

were

validly

presented because

there

were

subsisting

appeals;

filed by the petitioner before

the

Tribunal.

He further submits that

respondent

No.1

has admitted and acknowledged in the

impugned

order

that the appeals of the petitioner were

very

much

pending before the Tribunal.

In that view

the

matter,

he submits that the impugned order

unsustainable and the same is liable to be quashed

and set aside. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 8 -

13.

Mr.Joshi, relying upon the judgment of the

Apex

Court

the

case of Mela

Ram

Sons

v. Mela

Ram

Sons

v. Mela

Ram

Sons

C.I.T. C.I.T. C.I.T.,

(1956)29

ITR

607

urged

that

appeal

presented

out

of time is the appeal and the

order

dismissing

as time-barred is one passed in

the

appeal.

He further placed reliance on the judgment

Sheodan

Singh

Daryao Kunwar Sheodan

Singh

Daryao Kunwar Sheodan

Singh

Daryao Kunwar, AIR

1966

1332,

rendered

four judge Bench

the

Apex

Court;

wherein

the that

arose

was:

whether the dismissal of appeal from a decree on the

ground that the appeal was barred by limitation was

a decision in appeal. The Apex Court held:

"We

are therefore of opinion that where a

decision

given on the merits

the

trial

court

and the matter is

taken

appeal and the appeal is dismissed on some

preliminary

ground

like

limitation

default

in printing, it must be held that

such

dismissal

when

confirms

the

decision of the trial court on the merits,

itself

amounts to the appeal being

heard

and finally decided on the merits whatever

may

the ground for dismissal

the

appeal."

also relied upon the judgment of the Apex

Court

in the case of Board of Revenue v.

M/s.Raj Brothers Board of Revenue v.

M/s.Raj Brothers Board of Revenue v.

M/s.Raj Brothers

Agencies Agencies Agencies

etc.

etc.

etc., 1973 (3) SCR 492;

wherein the

Apex

Court approved the decision of the Madras High Court

which had applied the principle stated in Mela Ram & Mela Ram & Mela Ram &

Sons Sons Sons case case case (supra). Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 9 -

14.

Mr.Joshi, learned counsel

for the

petitioner

also placed reliance on the judgment

the Apex Court in the case of Essar Constructions v. Essar Constructions v. Essar Constructions v.

N.P.Rama N.P.Rama N.P.Rama

Krishna

Reddy

Krishna

Reddy

Krishna

Reddy, (2000) 6 SCC 94;

wherein

the

Apex

Court

observed

that

suit

which

dismissed

the

ground

limitation

may

appealed against as a decree.

By the same token, it

was held that an application under section 30 of the

Arbitration

Act, which was dismissed on the

ground

of limitation, was nothing but refusal to set aside

the award.

15.

Mr.Joshi pressed into service the judgment

two judge Bench of the Apex Court in the case of

C.I.T. C.I.T. C.I.T.

Shatrushailya Digvijay Jadeja

Shatrushailya Digvijay Jadeja

Shatrushailya Digvijay Jadeja,

(2005)

277

ITR

435

(SC);

wherein the

Apex

Court

has

considered

the

scope

of section 95(i)(c)

the

Finance

Act.

The Apex Court ruled that mere

fact

that

the

revision filed

beyond

the

period

limitation and might be rejected on

the

ground

delay

did not mean that there

were

revision application pending before the Commissioner

(Appeals)

such

the

order

the

designated

authority

rejecting the declaration was held to

bad.

Thus,

Mr.Joshi

submits

that

the

same Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 10 -

principle

the impugned order refusing to accept the

declarations

made

by the petitioner in respect

assessments

of the deceased is liable to be quashed

and set aside and the declarations are liable to be

held as legal and valid.

Per Per Per Contra : Contra : Contra :

---------- ---------- ----------

16.

Mr.Kotangale, learned counsel appearing

for

the Revenue submits that an appeal could not be

said

be pending in absence of

order

condoning

delay

filing

it.

In his

submission,

the

instant

case, delay in filing appeals had not

been

condoned

as no ground for its condonation was

made

out by the petitioner, as such the declarations were

rightly not entertained and rejected.

17.

Learned counsel for the Revenue, relying

upon

the decision of three judges Bench of the Apex

Court

the case of Computwel Systems P.Ltd.

v. Computwel Systems P.Ltd.

v. Computwel Systems P.Ltd.

W.Hasan W.Hasan W.Hasan

& anr.

& anr.

& anr., (2003) 260 ITR 86, submits that

appeal

can

be treated as regular appeal only

when

the

delay

filing appeal is condoned.

the

instant

case, the limitation in preferring

appeals

having

not

been

condoned by the

first

appellate

authority

the

appeals

filed before

were

not Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 11 -

competent, hence, no appeals were pending on the

date when the declarations were made.

18.

Mr.Kotangale submits that the appeals

filed

before

the Tribunal were against the

orders

refusing to condone delay and not against the orders

assessment

giving

rise to

tax

arrears.

He,

therefore,

submits that no fault can be found

with

the

decision

respondent

No.1

rejecting

the

declarations filed by the petitioner under KVS

Scheme.

19.

Mr.Kotangale further submits that the

appeals

filed by the petitioner before the Tribunal

were

never admitted.

Since appeals themselves were

not

admitted, the said appeals could not be treated

admitted

appeals

required

under

section

95(i)(c)

the Finance Act.

He, thus,

tried

support the impugned order and prayed for dismissal

of the petition.

In In In Rejoinder : Rejoinder : Rejoinder :

------------ ------------ ------------

20.

Mr.Joshi, learned counsel

for the

petitioner, submits that in the Tribunal there is no

procedure

admit appeal and then to hear

on Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09 other

words, as per

his

submission,

there

is no stage of admission of appeal under

the

rules of the Tribunal.

He submits that all appeals,

which

are validly presented before the Tribunal, by

implication

are

treated

admitted

appeals

competent for hearing on merits. This factual

position is not in dispute.

21.

The learned counsel for the petitioner,

while

reacting

to the submissions made by

learned

counsel

for the Revenue relying on the judgment

the Apex Court in Computwel Systems P.Ltd. Computwel Systems P.Ltd. Computwel Systems P.Ltd.

(supra),

submits that this judgment was based on the peculiar

facts

of that particular case.

He submits, in that

case,

original

revision petition filed before

the

original

authority itself was barred by limitation.

Ultimately,

rejection of prayer for condonation

delay

resulted

in dismissal of revision such

the revision petition in question

was

revision

petition in the eye of law.

According

him,

the case at hand, the

appeals

themselves

were

against

the order refusing to condone

delay.

The

appeals

were neither barred by limitation

nor

suffered from any defect. Such appeals were

perfectly competent and tenable. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 13 -

22.

Learned counsel for the petitioner further

submits

that

subsequent

the

impugned

order

rejecting

declarations

filed

under

KVS

Scheme,

during

pendency

of the petition, the Tribunal

has

allowed

the

appeals and condoned delay

filing

appeals

before

the first appellate authority.

his submission, this subsequent event is required to

taken into account while deciding this petition.

He,

thus,

submits that the order

condoning

delay

will

always relate back to the date of presentation

the

appeal.

At any rate, the

appellate

order

allowing

appeal will stand substituted with that of

order

rejecting appeal on the ground of condonation

delay.

If that be so, in his

submission,

the

appeals

became very much competent before the first

appellate

authority in view of subsequent order

the

Tribunal.

Consequently, the declarations filed

that

date will have to be treated as legal

and

valid

declarations filed by the petitioner

pending

appeals.

He, thus, submits that the impugned order

rejecting declarations under KVS Scheme is liable to

be quashed and set aside.

23.

Learned counsel for the petitioner,

without

prejudice

his

above

submission

and

without

admitting

that

there is any

conflict

of Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 14 -

views

between

the judgments of the Apex

Court

Computwel Computwel Computwel

Systems P.Ltd.

Systems P.Ltd.

Systems P.Ltd.

(supra) and Shatrushailya Shatrushailya Shatrushailya

Digvijaysingh Digvijaysingh Digvijaysingh

Jadeja

Jadeja

Jadeja

(supra),

submits

that

the

earlier

judgments

of three and four judge

Benches

were

not

brought to the notice of the

Apex

Court

when case of Computwel Systems P.Ltd. Computwel Systems P.Ltd. Computwel Systems P.Ltd.

was heard and

decided,

which can be said to be a cause for taking

little

different

view giving prima

facie

picture

that

runs contrary to the earlier views of

the

Apex Court that appeal barred by limitation is still

an appeal.

He, thus, submits that for any reason if

any

conflict

noticed

this

Court

two

judgments of the Apex Court referred to hereinabove,

that

event, the judgment of the Apex

Court

Computwel Computwel Computwel Systems P.Ltd. Systems P.Ltd. Systems P.Ltd. (supra) should be treated

as per-inquerium.

The The The Issue : Issue : Issue :

--------- --------- ---------

24.

The main issue for determination is:

Whether an appeal against the order

refusing

to condone delay (which is

very

much tenable under the Act) can be said to

a pending appeal as contemplated under

section 95(i)(c)? Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 15 -

Emerging Emerging Emerging Principles : Principles : Principles :

------------------- ------------------- -------------------

25.

Before proceeding to consider the above

issue,

let us first examine the principles emerging

from various judgments of the Apex Court cited at

bar.

26.

The first judgment of the Apex Court cited

line is in the case of Mela Ram & Sons Mela Ram & Sons Mela Ram & Sons

(supra);

wherein

a specific question involved was:

whether

an appeal accompanied by application for condonation

delay in filing appeal was appeal in the eye

law,

when the application for condonation of

delay

in filing appeal was rejected and, consequently, the

appeal

resulted

dismissal as being

barred

limitation.

The

Apex

Court

relying

upon

the

observations

made by the Privy Council in

Nagendra Nagendra Nagendra

Nath Nath Nath

Dey

Suresh Chandra Dey

Dey

Suresh Chandra Dey

Dey

Suresh Chandra Dey (1932) (59

Indian

Appeals

283) held that the appeal presented out

time

an appeal, and an order dismissing

time-barred

one

passed

appeal.

the

observations made by the Privy Council read as

under:

"there

is no definition of appeal in

the

Civil

Procedure Code, but their Lordships

have

doubt that any application by

party

to an appellate Court, asking it to

set

aside

revise

decision

a Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 16 -

subordinate court, is an appeal within the

ordinary

acceptation of the term and that

less

appeal

because

irregular or incompetent."

The

aforesaid observations were also referred to by

the Apex Court with approval in Raja Kulkarni and Raja Kulkarni and Raja Kulkarni and

others others others v. The State of Bombay v. The State of Bombay v. The State of Bombay, 1954 SCR 384.

27.

The Apex Court in the another four judge

Bench

decision

delivered

in the case

Sheodan Sheodan Sheodan

Singh Singh Singh

case

case

case

(supra);

was

confronted

with

the as to whether the dismissal of appeal from

a decree on the ground that the appeal was barred by

limitation

was a decision in the appeal.

As stated

earlier,

the Apex Court held that where a

decision

given

on the merits by the trial court and

the

matter

taken

appeal

and

the

appeal

dismissed

some

preliminary

ground

like

limitation,

must be held that

such

dismissal,

when

it confirms the decision of the trial court on

the merits, itself amounts to the appeal being heard

and finally decided on the merits, whatever may be

the ground for dismissal of the appeal.

28.

The Apex Court in the case of Shyam Sundar Shyam Sundar Shyam Sundar

Sarma Sarma Sarma

(supra),

while referring to the decision

the

case

of Ratansingh v.

Vijaysingh and

others Ratansingh v.

Vijaysingh and

others Ratansingh v.

Vijaysingh and

others, Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 17 -

(2001)

SCC 469 rendered by its two judge

Bench;

wherein it was held that dismissal of an application

for delay would not

amount

decree

and,

therefore, dismissal of an

appeal

time barred was also not a decree, observed that the

earlier

judgments

of the Apex Court in Mela Ram

& Mela Ram

& Mela Ram

Sons Sons Sons

(supra)

and

Sheodan Singh Sheodan Singh Sheodan Singh (supra)

were

not

brought

the notice of the two judge

Bench

and

further went on to hold that dismissal of appeal for

default

along

with application for condonation

delay

its filing was a decision in appeal

and,

thereafter,

the application for setting aside

that

decision

under

order

9 rule 13 of Code

Civil

Procedure,

1908

was

not

maintainable.

The

submissions

that the appeal filed with for

condonation of delay was not an appeal and that

such case should be treated as non-filing of appeal

did not find favour with the Apex Court

29.

In the case of Essar Constructions Essar Constructions Essar Constructions

(supra),

the Apex Court ruled that a suit which

dismissed

the

ground

limitation

may

appealed

against

as a decree.

By the

same

token

dismissal

application made under section 30

the

Arbitration Act on the ground of limitation was

held

refusal to set aside the award.

The

Apex Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 18 -

Court

further

went on to observe that

section

39(1)(vi)

and section 17 of the Arbitration Act are

read

together, it would follow that application for

setting

aside

the award which was rejected on

the

ground

that

it was delayed and that no

sufficient

cause had been made out under section 5 of the

Limitation Act would be an appealable order.

30.

In the case of Shatrushailya Digvijaysingh Shatrushailya Digvijaysingh Shatrushailya Digvijaysingh

Jadeja Jadeja Jadeja

(supra), the Apex Court was dealing with the

KVS Scheme;

wherein, in respect of assessment years

1984-85

to 1991-92, the assessee was held liable to

pay tax under assessment orders passed under section

143(3)

the Income-tax Act, 1961 and also

under

the

assessment

orders passed under the

Wealth-tax

Act,

1957.

Being

aggrieved

the

assessment

orders,

the assessee therein, had preferred appeals

the

Commissioner (Appeals).

The appeals

were,

however,

dismissed

the

year

1992-93

the

appellants

did

not make pre-deposit and failed

pay

self-assessed tax.

The Finance Act

introduced

KVS

Scheme.

The

appellants

filed

appeals

and

revisions

28/29th

December,

1998

along

with

applications

for

condonation of delay and

applied

for

settlement of tax dues under the KVS Scheme

making

requisite

declarations.

The

designated Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 19 -

authority rejected declarations made by the assessee

in relation to the revision applications.

On a writ preferred

by the assessee the High

Court

held

that

the word "pending" appearing in

section

95(i)(c) of the Finance Act, in relation to revision

proceedings

meant "factually pending" and the

fact

that

the

revision petitions were not filed

within

the

period

of limitation did not detract from

the

fact

that

the

proceedings were

pending

and

the

designated

authority

was

directed to

accept

the

declarations.

The

Apex

Court, on appeal

the

department, confirmed the decision of the High Court

this count observing that the mere fact that the

revision

applications were filed beyond the

period

limitation and might result in rejection on

the

ground

delay did not follow that there were

revision

applications

pending

before

the

Commissioner

(Appeals).

The

orders

the

designated authority rejecting declarations were

held to be bad and illegal.

31.

The Apex Court, while taking survey of

previous

judgments, relied upon its own judgment in

the

case of Dr.Mrs.Renuka Datla v.

C.I.T. Dr.Mrs.Renuka Datla v.

C.I.T. Dr.Mrs.Renuka Datla v.

C.I.T.,

(2003)

259

ITR

258

(SC);

wherein the

Apex

Court

had

interpreted

section

95(i)(c)

of the

KVS

Scheme; Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 20 -

wherein

it was held that if the appeal or

revision

pending on the date of filing of the declaration

under

section 88 of the Scheme, it was not open

the

designated

authority

hold

that

the

appeal/revision

was

sham,

ineffective

infructuous.

The

Apex Court has also relied

upon

its

other

judgments delivered in the case of

Raja Raja Raja

Kulkarni Kulkarni Kulkarni

(supra) and Tirupati Balaji Developers (P) Tirupati Balaji Developers (P) Tirupati Balaji Developers (P)

Ltd. Ltd. Ltd.

State of Bihar

State of Bihar

State of Bihar, (2004) 5 SCC 1;

wherein

it was held that the an appeal does not cease to be

an appeal though irregular and incompetent.

32.

In the judgment of three judge Bench of

the

Apex

Court

in the case of

Computwel

Systems Computwel

Systems Computwel

Systems

P.Ltd. P.Ltd. P.Ltd.

(supra), the factual scenario depicts that a

delayed revision petition filed under section 264 of

the

Income-tax Act came to be dismissed for want of of delay.

The Commissioner, thus,

did

not entertain the declaration made by the petitioner

under

the

KVS Scheme.

The writ petition filed

the

High Court came to be dismissed.

On a petition

for

special

leave to appeal the Apex

Court

while

affirming

the

decision

the

Commissioner

and

dismissing

the petition for special leave held that

the

revision

petition could be said to be

pending

only

if the delay had been condoned and, since

the Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

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delay

was

not condoned, the revision petition

was

not pending on the date of the declaration and the

declaration could not be entertained.

33.

One more judgment of the Apex Court in the

case of Commr.

of C.Ex.

Smithkline Beecham Co. Commr.

of C.Ex.

Smithkline Beecham Co. Commr.

of C.Ex.

Smithkline Beecham Co.

Health Health Health

C.Ltd.

C.Ltd.

C.Ltd.,

2003

(157)

ELT

497

(SC)

needs

reference;

wherein

two

judge Bench of

the

Apex

Court

in its short order held that in the event

dismissal

appeal by the Commissioner

(Appeals)

for

failure

to comply with pre-deposit

direction,

the

Tribunal on appeal cannot go into merits of the

case and has to confine itself only to issue whether

pre-deposit

was required or not.

Consequently, the

observations

made

by the Tribunal in its order were

set

aside and

the

proceedings

were

remitted

back

the Commissioner

(Appeals)

for

consideration In other

words,

appeal

though restricted in its scope was held to be

tenable.

34.

In the case of Raja Mechanical Company Raja Mechanical Company Raja Mechanical Company

Pvt.Ltd. Pvt.Ltd. Pvt.Ltd.

Commissioner of Central Excise

Commissioner of Central Excise

Commissioner of Central Excise,

2002

(144)

ELT

(Del.),

the Delhi

High

Court

was

pleased

hold

that

the for delay is dismissed then appeal

may Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09 lie against such order to the Tribunal, but the only which

can be raised in appeal

would

be:

whether

the Commissioner (Appeals) was justified in

refusing

to condone delay.

No other question, much

less

any question on merits of the matter, could be

gone

into by the second appellate authority.

This

judgment

of the Delhi High Court finds approval

the Apex Court in Chandi Prasad & others v.

Jagdish Chandi Prasad & others v.

Jagdish Chandi Prasad & others v.

Jagdish

Prasad Prasad Prasad &

& others

others

others, (2004) 8 SCC 724.

This view of the

Delhi High Court is also in consonance with the view

taken by the Apex Court in the case of Smithkline Smithkline Smithkline

Beecham Beecham Beecham Co. Health C.Ltd. Co. Health C.Ltd. Co. Health C.Ltd. (supra).

35.

The aforesaid principles emerging from

various

judgments

the Apex Court

need

applied

to the case at hand, though it give rise to

certain additional issues, which need consideration

independent of the above judgments.

Consideration Consideration Consideration : : :

------------- ------------- -------------

36.

Having heard rival parties, the learned

counsel for the Revenue has placed heavy reliance on

the

judgment

the

Apex Court in

the

case

Computwel Computwel Computwel

Systems P.Ltd.

Systems P.Ltd.

Systems P.Ltd.

(supra) in support of his

submissions

and

tried

justify

the

impugned Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

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action.

Let us, therefore, examine to what

extent

this

case

helps

the Revenue.

In that

case,

the

revision

petition itself was barred by

limitation.

Since

the

delay

was not

condoned,

the

revision was

held

as not pending on the

date

declaration; as such it was held that declaration

was not maintainable.

37.

In Shatrushailya Digvijaysingh Jadeja Shatrushailya Digvijaysingh Jadeja Shatrushailya Digvijaysingh Jadeja

(supra),

appeal

was pending for

consideration

prayer

seeking delay.

other

words,

the

prayer

for condonation

delay

was

neither

granted nor rejected.

In that view of

the

matter, the Apex Court held that the appeal was very

much pending though it was delayed.

38.

We do not see any conflict of views in

three

judge

Bench

decision of the Apex

Court

Computwel Computwel Computwel

Systems

P.Ltd.

Systems

P.Ltd.

Systems

P.Ltd.

(supra) and

two

judge

Bench decision in Shatrushailya Digvijaysingh Jadeja Shatrushailya Digvijaysingh Jadeja Shatrushailya Digvijaysingh Jadeja

(supra).

matter

of fact, in

the

case

Shatrushailya Shatrushailya Shatrushailya Digvijaysingh

Digvijaysingh

Digvijaysingh Jadeja

Jadeja

Jadeja, earlier judgment

the case of Computwel Systems P.Ltd. Computwel Systems P.Ltd. Computwel Systems P.Ltd.

has

been,

specifically, referred by the Apex Court but no such

conflict was noticed by it. 39.

In the case at

hand,

the

very appeals, which were pending

before Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 24 -

the

Tribunal,

were well within

limitation

though

they

were

against

the order refusing

condone

delay.

Such appeals were competent appeals, in view

the

judgments of the Apex Court in the case

Essar Essar Essar

Constructions

Constructions

Constructions (supra) and Smithkline

Beecham Smithkline

Beecham Smithkline

Beecham

Co. Co. Co. Health C.Ltd. Health C.Ltd. Health C.Ltd. (supra), though the scope of the

appeal was restricted.

40.

The appeals filed before the Tribunal were

very

much

competent and tenable.

Ultimately,

the

appeals

have

been

allowed.

The delay

filing

appeals before the first appellate authority came to

condoned.

As such presentation of appeals filed

before

the

first appellate authority

against

the

orders

giving rise to tax arrears became competent.

Had

there

been a refusal to condone delay

the

Tribunal, the orders rejecting declarations filed by

the

petitioner

under

KVS Scheme would

have

been

justified

in view of the decision of the Apex Court

the

case of Computwel Systems P.Ltd. Computwel Systems P.Ltd. Computwel Systems P.Ltd.

(supra).

The factual scenario of the presence case at hand is

altogether

different

than what was noticed by

the

Apex Court in the case of Computwel Systems P.Ltd. Computwel Systems P.Ltd. Computwel Systems P.Ltd.

(supra) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 25 -

41.

Considered from another angle, as pointed

out

hereinabove, the appeals challenging the orders

refusing

to condone delay, were pending before

the

Tribunal.

Such appeals were perfectly maintainable

under

the

provisions of the Act under

which

they

were

preferred.

The case at hand stands on

little

better

footing

than

that

Shatrushailya Shatrushailya Shatrushailya

Digvijaysingh Digvijaysingh Digvijaysingh

Jadeja

Jadeja

Jadeja

(supra) decided by

the

Apex

Court;

wherein

the Apex Court held that

revision which

was

filed

beyond

the

period

limitation

along

with

prayer for delay

was perfectly maintainable in the eye of law.

this

view of the matter, applying the ratio

the

said

judgment, in our considered view, on

the

date

on which second declarations were filed by the

petitioner,

the

appeals before the

Tribunal

were

very

much

pending and the declarations

under

KVS

Scheme were very much in accordance with the Scheme.

42.

The four judge Bench in Sheodan Singh v. Sheodan Singh v. Sheodan Singh v.

Daryao Daryao Daryao

Kumar

Kumar

Kumar (supra), had an occasion to consider a

similar "whether dismissal of

appeal

from

decree

on the ground that the

appeal

was

barred

by limitation was a decision in the appeal".

While

considering

this question, it was held

that

such

appeal was very much competent.

Same view has Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 26 -

been followed by three judge Bench of the Apex Court

in Shyam Sundar Sarma’s case Shyam Sundar Sarma’s case Shyam Sundar Sarma’s case (supra)

43.

Having taken survey of the judicial

pronouncements

the

Apex Court right

from

the

judgment

the

case of Mela Ram &

Sons Mela Ram &

Sons Mela Ram &

Sons

(supra)

based

on the view taken by the Privy Council in the

case

Nagendra Nath Dey v.

Suresh

Chandra

Dey Nagendra Nath Dey v.

Suresh

Chandra

Dey Nagendra Nath Dey v.

Suresh

Chandra

Dey

(supra)

till the judgment in case of

Shatrushailya Shatrushailya Shatrushailya

Digvijaysingh Digvijaysingh Digvijaysingh

Jadeja

Jadeja

Jadeja

(supra), with respect to

the "whether

appeal

accompanied for delay

filing

appeal

could be said to be an appeal in the eye

law"; the impugned action is liable to be set aside

and this petition is liable to be allowed.

44.

Considered from third angle based on the

settled position of law in P.Venkateswarlu v.

Motor P.Venkateswarlu v.

Motor P.Venkateswarlu v.

Motor

General Traders

General Traders

General Traders, AIR 1975 SC 1409 and M/s.Variety M/s.Variety M/s.Variety

Emporium Emporium Emporium

R.M.Mohd.Ibrahim

R.M.Mohd.Ibrahim

R.M.Mohd.Ibrahim, AIR 1985 SC 207, the

subsequent

events taking place during the

pendency

the

litigation

can

very well

taken

into

consideration

and

the Court is competent to

mould

the relief accordingly.

In the case at hand, during

pendency

of this petition, the Tribunal entertained

and

allowed

appeals

filed

the

petitioner Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 27 -

challenging

the orders refusing to condone delay in

filing

first appeals.

Delay in filing appeals came

be condoned.

The matters were remitted back

the

first appellate authority for consideration Thus, the order of the Tribunal

condoning

delay

will now relate back to the original date

presentation of appeals.

If that be so, on the date

when

declarations were filed, all appeals will have

treated

pending

the

eye

law.

Consequently, the order rejecting declarations filed

by the petitioner will become unsustainable in view

of subsequent events.

45.

At the end of the day, taking over all

view

the matter, the impugned

order

rejecting

declarations filed by the petitioner is liable to be

quashed and set aside.

The declarations so made are

liable

be held as legal and valid.

far

payment

tax

liability

as per

KVS

Scheme

concerned,

the petitioner will have to make payment

thereof, if not made within the time-frame fixed

herein.

46.

In the result, impugned action is set

aside.

Petition is allowed.

Petitioner is granted

15 days time to make payment of tax liability as per Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09

- 28 -

the

KVS

Scheme

after

getting

intimation

from

respondent

No.1,

who

shall communicate

the

same

within 30 days from the date of receipt of copy of

this order.

Rule is made absolute in terms of this

order with no order as to costs.

(J.P.DEVADHAR, (J.P.DEVADHAR, (J.P.DEVADHAR, J.) J.) J.)

(V.C.DAGA, (V.C.DAGA, (V.C.DAGA, J.) J.) J.) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:24:09 Powered by TCPDF (www.tcpdf.org)