Case: Messrs Mela Ram &amp; Sons Vs. The Commissioner Of Income-Tax,Punjab

30 (2). Now, those observations came to be made by way of answer to a new contention put forward by the learned Attorney-General in support of the appeal. That contention was that the miscellaneous application presented to the Tribunal might be treated as an appeal against the order dated 19-11-1945, in which case the order passed thereon on 20-2-1946 would fall under S. 33 (4) and the reference would be competent. In disagreeing with this contention, this Court observed that the appeal to the Appellate Assistant Commissioner was incompetent under S. 30 (1), that even if it was competent, the order dated 19-11-1945 was not contemplated by S. 31 and there could be no appeal against such an order under S. 33(1). Now it should be noticed that the question actually referred under S. 66 (1) was the correctness and legality of the order passed in a miscellaneous application and not of any order made in an appeal preferred under S. 33 (1). In this context, the point sought to be raised by the learned Attorney-General did not arise at all for decision, and the observations in answer thereto cannot be read as a pronouncement on the question of the maintainability of the appeal, much less as a decision that an order dismissing an appeal as barred by limitation is one under S. 30(2). Accordingly, the question whether an order dismissing an appeal as barred by limitation falls under S. 30 (2) or S. 31 remains unaffected by the observations in 1953 SC 118 (AIR V 40) (P).13. Then against, under the provisions of the Act, limitation is not the only preliminary ground on which an appeal could be disposed of without a consideration of the merits. Section 30(3) provides that an "appeal shall be in the prescribed form and shall be verified in the prescribed manner". If that Appellate Assistant Commissioner holds that the appeal does not comply with the requirements of this enactment and rejects it on that ground, the order must be one made under S. 31, since S. 30(3) makes no provision for such an order, as does S. 30 (2) in the case of limitation. All the orders under S. 31 being appealable under S. 33, the order of dismissal for non-compliance with S. 30(3) must also be appealable and it was so decided in - Gyan Manjari Kuari v. Commr. of Income-tax, 1944 Pat 112 (AIR V 31) (Q). How is this view to be reconciled with the contention that S. 31 contemplates only orders on the merits of the assessment and not on preliminary issues? Vide also the decision in - Ananda v. Commr. of Income-tax, 1931 Pat 306 (AIR V 18) (FB) (R), which was followed in 1944 Pat 112 (AIR V 31) (Q) and in - Ramnarayana Das v. Commr. of Income-tax, 1950 Orissa 205 (AIR V 37) (S). There is thus abundant authority for the position that S. 31 should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders which dispose of the appeal on preliminary issues, such as limitation and the like.14. The learned Solicitor-General sought to get over these decisions by taking up the position that S. 31 (3) (a) construed in its literal and ordinary sense conferred jurisdiction on the Appellate Assistant Commissioner only to pass orders on the merits of the assessment, that it was not therefore open to him to entertain any question which did not directly relate to such merits, and that accordingly he could not hear or decide any issue of a preliminary nature such as limitation and dispose of the appeal on the basis of the finding on that issue. He conceded that this contention would run counter to numerous authorities, but argued that they were all wrong. Having given due consideration to this contention we are of opinion that it is not well founded.15. Taking the plea of limitation - which is what we are concerned with in this appeal - when there is a judgment or order against which the statute provides a right of appeal but none is preferred within the time prescribed therefor, the respondent acquires a valuable right, of which he cannot be deprived by an order condoning delay and admitting the appeal behind his back. And when such an order is passed exparte, he has aright to challenge its correctness at the hearing of the appeal. That is the position under the general law (vide - Krishnasami v. Ramasami, 1917 PC 179 (AIR V 4) (T), and there is nothing in the provisions of the Income-tax Act, which enacts a different principle. Therefore, if an appeal is admitted without the fact of delay in presentation having been noticed, clearly it must be open to the Department to raise the objection at the time of the hearing of the appeal. That would also appear to be the practice obtaining before the Income-tax Tribunal as appear from the decisions cited before us, and that, in our opinion, is right.Similar considerations would apply to other objections of a preliminary character, such as one based on S. 30, sub-s (3). We should be slow to adopt a construction which deprives parties of valuable rights. We are therefore of opinion that contentions relating to preliminary issues are open to consideration at the time of the hearing of the appeal, and that the jurisdiction of the Appellate Assistant Commissioner is not limited to the hearing of the appeal on the merits of the assessment only. In this view, the orders of the Appellate Assistant Commissioner holding that there were no sufficient reasons for excusing the delay and rejecting the appeals as time-barred would be orders passed under S. 31 and would be open to appeal, and it would make no difference in the position whether the order of dismissal is made before or after the appeal is admitted.16. The question referred must accordingly be answered in the affirmative.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In this context, the point sought to be raised by the learned Attorney-General did not arise at all for decision, and the observations in answer thereto cannot be read as a pronouncement on the question of the maintainability of the appeal, much less as a decision that an order dismissing an appeal as barred by limitation is one under S. 30(2). Accordingly, the question whether an order dismissing an appeal as barred by limitation falls under S. 30 (2) or S. 31 remains unaffected by the observations in 1953 SC 118 (AIR V 40) (P).13. Then against, under the provisions of the Act, limitation is not the only preliminary ground on which an appeal could be disposed of without a consideration of the merits. Section 30(3) provides that an "appeal shall be in the prescribed form and shall be verified in the prescribed manner". If that Appellate Assistant Commissioner holds that the appeal does not comply with the requirements of this enactment and rejects it on that ground, the order must be one made under S. 31, since S. 30(3) makes no provision for such an order, as does S. 30 (2) in the case ofis thus abundant authority for the position that S. 31 should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders which dispose of the appeal on preliminary issues, such as limitation and the like.14. The learned Solicitor-General sought to get over these decisions by taking up the position that S. 31 (3) (a) construed in its literal and ordinary sense conferred jurisdiction on the Appellate Assistant Commissioner only to pass orders on the merits of the assessment, that it was not therefore open to him to entertain any question which did not directly relate to such merits, and that accordingly he could not hear or decide any issue of a preliminary nature such as limitation and dispose of the appeal on the basis of the finding on thatconceded that this contention would run counter to numerous authorities, but argued that they were all wrong. Having given due consideration to this contention we are of opinion that it is not well founded.15. Taking the plea of limitation - which is what we are concerned with in this appeal - when there is a judgment or order against which the statute provides a right of appeal but none is preferred within the time prescribed therefor, the respondent acquires a valuable right, of which he cannot be deprived by an order condoning delay and admitting the appeal behind hiswhen such an order is passed exparte, he has aright to challenge its correctness at the hearing of the appeal. That is the position under the general law (vide - Krishnasami v. Ramasami, 1917 PC 179 (AIR V 4) (T), and there is nothing in the provisions of the Income-tax Act, which enacts a differentif an appeal is admitted without the fact of delay in presentation having been noticed, clearly it must be open to the Department to raise the objection at the time of the hearing of the appeal. That would also appear to be the practice obtaining before the Income-tax Tribunal as appear from the decisions cited before us, and that, in our opinion, is right.Similar considerations would apply to other objections of a preliminary character, such as one based on S. 30, sub-s (3). We should be slow to adopt a construction which deprives parties of valuable rights. We are therefore of opinion that contentions relating to preliminary issues are open to consideration at the time of the hearing of the appeal, and that the jurisdiction of the Appellate Assistant Commissioner is not limited to the hearing of the appeal on the merits of the assessmentthis view, the orders of the Appellate Assistant Commissioner holding that there were no sufficient reasons for excusing the delay and rejecting the appeals as time-barred would be orders passed under S. 31 and would be open to appeal, and it would make no difference in the position whether the order of dismissal is made before or after the appeal is admitted.16. The question referred must accordingly be answered in the affirmative.