Commissioner of Income Tax I vs Five Star Marine Exports (P) Limited

K. Raviraja Pandian, J.—The appeal is at the instance of the revenue against the order dated 18.9.2008 of the Income Tax Appellate

Tribunal, Madras ''A'' Bench in I.T.A. No. 814/Mds/2005 relating to the assessment year 2001-02 by formulating the following questions of law:

Whether on the facts and circumstances of the case, the Tribunal was right in remitting the matter to the assessing officer to await the outcome of

the writ petition, without deciding whether the delay in filing the first appeal was condonable?

Whether the Tribunal can straightaway go into the merits of the case, where the lower appellate authority has dismissed the appeal on grounds

of delay and not on merits?

The facts of the case are as follows:

The assessee is engaged in the business of export of sea food. The assessing officer has made an addition on account of DEPB expenses and

donations made by the assessee in his assessment order dated 29.1.2004. Aggrieved by the order of the assessing officer, the assessee filed an

appeal before the Commissioner of Income Tax (Appeals) with a delay of 255 days. The Commissioner of Income Tax (Appeals) did not accept

the reason given by the assessee at the time taken in pursuing a rectification petition before the assessing officer, as he found that the assessee had

taken a further period of six months even after the receipt of the rectification order. The appeal was dismissed on the ground of barred by limitation

without going into the merits of the case. Aggrieved by the same, the assessee filed an appeal before the Income Tax Appellate Tribunal, wherein it

was brought to the notice of the Tribunal that the amendment brought about by the Taxation Laws Amendment Act, 2004 in the provisions of

Section 80HHC has been challenged before various High Courts and the jurisdictional High Court has also admitted a writ petition in W.P. No.

9031 of 2006 and pending for consideration. In that view of the matter, the Tribunal set aside the order of the Commissioner (Appeals) and

remitted back the matter to the assessing officer to pass appropriate order after the decision rendered by the High Court in the writ petition. The

correctness of the same is now canvassed in this appeal on the ground that in the appeal before the Tribunal, the correctness of the order of the

Commissioner of Income Tax (Appeals) in rejecting the application to condone the delay was only questioned and it has not been argued on

merits. When such being the position, the Tribunal would not have set aside the order and remitted back the matter to the assessing officer with a

direction to await for the decision of the High Court in the writ petition pending consideration.

We heard the argument of the learned Counsel for the revenue and perused the material on record.

As could be seen from the order of the Tribunal, it could be seen that only the Departmental representative stated that a similar issue has been

set aside by the Tribunal, Chennai Bench directing the assessing officer to decide the issue in dispute after decision of the High Court in the

aforesaid case. It is also further recorded by the Tribunal that the proposition was put up by both the parties and both the parties agreed that the

issue in dispute has been set aside to the file of the assessing officer to decide the same after final order on the issue is decided by the jurisdictional

High Court.

Now learned Counsel for the revenue contended before us that in the appeal before the Tribunal, what was argued is the correctness of the

order of the Commissioner (Appeals) rejecting the application filed to condone the delay in filing the appeal. Hence, the Tribunal would have set

aside the order of assessment.

A similar issue in an appeal before the Tribunal against the Appellate Assistant Commissioner, who refused to condone the delay in presentation

and also against the order refusing the condone the delay in revision was considered by the Division Bench of this Court in a pari materia provision

in the Sales Tax Act in the case of State of Tamil Nadu v. P.M. Madhavan Nair and Ors. (1982) 49 STC 244, wherein it was held by a Division

bench of this Court that refusal to condone delay would tantamount to confirming the order of assessment. Hence, the appeal is maintainable and

the appeal can be decided on merits for which proposition the Division Bench has also taken into consideration of the order of the Supreme Court

in the case of Mela Ram and Sons v. Commissioner of Income Tax, Punjab (1956) 29 ITR 667, wherein the three Judges Bench of the Supreme

Court having regard to Section 30(2) of the old Income Tax Act held that there was no sufficient reason for excusing delay and rejecting the

appeal u/s 32 of the Income Tax Act as time-barred is an order passed u/s 31 and an appeal lies from that order to the Appellate Tribunal and the

Tribunal can well go into the merits of the case as the order of the Commissioner (Appeals) would tantamount to confirming the order of

assessment.

In view of the above said decisions, we do not find that the Tribunal has committed any error in setting aside the matter and remitting it back to

the assessing officer with a direction to pass final order as per the outcome of the decision of the High Court. Further, the learned Departmental

representative has agreed before the Tribunal that the issue similar to the one in dispute has been set aside to the file of the assessing officer to

decide the same after final order on the issue is decided by the jurisdictional High Court. As a matter of fact, the remittal order in a similar issue

was brought to the notice of the Tribunal only by the Departmental representative. In such a situation, we do not find any reason to entertain the

appeal and the appeal is liable to dismissed and accordingly the same is dismissed.