M.K. Srikanta Setty vs Commissioner of Income Tax

K.S. Puttaswamy, J.—M.K. Srikanta Setty of Tumkur, who is the petitioner before me, is an assessee under the income tax Act, 1961 in the status of an HUF from about 1954. On 30-12-1975, the petitioner forwarded a declaration accompanied by the necessary proof of tax to the Commissioner by registered post, acknowledgment due, disclosing an income of Rs. 25,000 and for a consequential acceptance of the same under the Voluntary Disclosure of Income and Wealth Act, 1976 (''the Act'') which was received by the latter on 1-1-1976. On 24-3-1980, the Commissioner has rejected the same refusing to condone the delay in making the same (Annexure-G). In this petition under article 226 of the Constitution, the petitioner has challenged the order dated 24-12-1980 of the Commissioner and has sought a mandamus to him to condone the delay and treat the same as a valid declaration under the Act.

The petitioner has asserted that the declaration forwarded by him on 30-12-1975 by registered post, acknowledgment due, though received on 1-1-1976, should be treated as a valid declaration made on the very day it was forwarded by him, treating the Government Postal Department as the agent of the Commissioner and in any event on the very next day, i.e., on 31-12-1975, on which day it should have normally been received by the Commissioner.

The respondent has resisted this writ petition.

Shri G. Sarangan, the Learned Counsel for the petitioner, contends that the words ''make'' and ''made'' occurring in sections 3 and 4 of the Act should be liberally construed and the declaration forwarded by his client on 30-12-1975 should be treated as made on that very day and should be deemed to have been made on 31-12-1975, on which day it should have normally been received by the Commissioner. In support of his contention, Shri Sarangan strongly relied on the two Division Bench rulings of this Court in Esthuri Aswathiah Vs. Commissioner of Income Tax, Mysore, and K.N.K. Reddy Vs. Commissioner of Income Tax, and a ruling rendered by me in Vanivilas Co-operative Sugar Factory Ltd. v. Union of India [1983] ELT 290 (Kar.).

Shri K. Srinivasan, the learned senior standing counsel for the income tax Department, appearing for the respondent, contends that the terms ''make'' and ''made'' occurring in sections 3 and 4 must be strictly construed and the absolute period of limitation prescribed by section 3 cannot be extended on any legal principle.

Section 3 provides for making a declaration in accordance with the provisions of section 4 before 1-1-1976 or on or before 31-12-1975. The time specified in section 3 for making a declaration is an absolute period which cannot be extended or condoned by any one under any circumstance.

In the context, the words ''make'' and ''made'' occurring in sections 3 and 4 mean that a declaration under the Act should be filed or presented on or before 31-12-1975 and not beyond that.

On the object of prescribing a limitation Justice Story in his treatise Conflict of Laws, 8th edn., that has become classical, has stated thus:

... They proceed upon the presumption that claims are extinguished or ought to be held extinguished whenever they are not litigated within the prescribed period. They quicken diligence by making it in some measure equivalent to right. They discourage litigation by burying in some common receptacle all the accumulations of past times which are unexplained and have now from lapse of time become inexplicable. It has been said by John Voet that controversies are limited to a fixed period of time, lest they should be immortal, while men are mortal. (p. 794)

In AIR 1932 165 (Privy Council) the Judical Committee of the Privy Council stated the rule of construction to be followed in interpreting articles of the Act in these words:

... The fixation of periods of limitation must always be to some extent arbitrary, and many frequently result in hardship. But in construing such provisions equitable considerations are out of place and the strict grammatical meaning of the words is, their Lordships think, the only safe guide.... (p. 167)

In more than one case our Supreme Court has restated these principles. On these principles that govern, this Court is bound to place a strict construction on the period of limitation stipulated by section 3. Any hardship to be caused is totally irrelevant and must be ignored by the Court.

In the two cases decided under the income tax Act, 1961, this Court was deciding with the exercise of power by an authority under the income tax Act and not with the exercise of a right conferred on a person as in the Act and the ratio in those cases do not really bear on the point and assist Shri Sarangan.

On any principle, the day on which the declaration was forwarded by post or should have normally been received, if the postal authorities had acted diligently cannot be construed as the days of making or filing before the Commissioner.

Whether a declaration is filed in person or forwarded by post, whichever course is adopted, such a declaration must actually be filed or received by the Commissioner on or before 31-12-1975.

In Vanivilas Co-operative Sugar Factory Ltd.''s case (supra), this Court was not dealing with the exercise of a right conferred by the Act and the ratio in that case does not really bear on the point.

Whatever be the circumstances in which the petitioner''s declaration was received on 1-1-1976, that has hardly any relevance to decide whether that was made before 1-1-1976 or on or before 31-12-1975. In the absence of a provision for condonation of delay, the Commissioner cannot condone the delay whatever be the circumstances in which that delay occurred. If the Commissioner had no power to condone the delay, this Court also cannot exercise that power and extend the period of limitation.

On any view, the impugned order of the Commissioner does not call for my interference. As all the contentions urged for the petitioner fail, this writ petition is liable to the dismissed. I, therefore, dismiss this writ petition and discharge the rule issued in the case. But, in the circumstances of the case, I direct the parties to bear their own costs.