Case: J. B. Advani and Company Private Limited Vs. R. D. Shah, Commissioner of Income Tax, Bombay

The facts which are not in. dispute are that thewas dealing in a large number of commodities like paper, machinery, cotton textiles, tea, etc. In the financial yearrelevant for the, assessment yearthe company started making transactions in jute. The turnover of the export of jute during that year amounted to about Rs. 42 lakhs. As the company was receiving a large number of enquiries, from foreign countries in connection with the supply of jute, it entered into a contract on December 28, 1951, for forward purchase of jute. Similar contracts were entered into in January, 1952, at different rates. The total quantity involved was 30, 00, 000 yds. By the end of January, 1952, jute prices started falling heavily. The transactions were consequently closed by a corresponding loss in March, 1952. Under these settlements the company had to make payments totalling Rs. 4, 71, 375 which was recorded in its books for the year ending March 31, 1953. The company claimed the loss to the extent of the aforesaid amount in its return for the assessment yearax Officer was of the view that it was a speculative loss and could hot be set off against other income. The company preferred an appeal to the Appellate Assistant Commissioner who held that the loss in question was not a speculative loss and it could be set off against the income from the other business of the company. TheOfficer filed an appeal to the Appellate Tribunal and, at the time of the hearing of the appeal for the assessment yearthe departmental representative sought permission to raise a new point, namely, that the loss in jute was not allowable in the assessment yearas the settlement were made in March, 1952. which would be relevant for the assessment yearThe Tribunal permitted the department to raise this point and allowed the departments appeal.

Reasoning: The learned counsel for thes laid a great deal of stress on the hardship involved in the case.It can hardly be gainsaid that the company, even according to the order of the Tribunal, could have claimed aof the loss in question during the assessment yearIt was only for the first time before the Tribunal during the hearing of the appeal relating to the assessment yearthat the question was raised on behalf of the department that this loss was not allowable in the assessment yearThe company had, for good reasons, thought that, since the payment which had been made in settlement of contracts were recorded in the books for the year ending March 31, 1953, the loss was claimable during the assessment yearThe company had a good case for invoking the revisional jurisdiction of the Commissioner under section 33A of the Act. Unfortunately the company did not disclose any ground whatsoever for the delay between July 7, 1964, when the order of the Tribunal was announced and the date of the application, which was August 21, 1964. According to(2) of section 33A the Commissioner may, on an application by an assessee for revision of an order passed by any authority subordinate to him, made within one year from the date of the order or within such further period as the Commissioner may think fit to allow on being satisfied that the assessee was prevented by sufficient cause from making the application within that period, call for the record of the proceedings and make such order as he may think fit subject to certain restrictions which it is unnecessary to mention. The company, in the present case, can be said to have been prevented for sufficient cause from making an application under section 33A within a period of one from the date of the order of theOfficer in respect of the assessment yearbecause of the decision of the Tribunal in respect of the assessment yearin which for the first time the department was allowed to raise a pew point as a result of which it was held that the company was entitled to set off the loss in question during the assessment year54. The serious hurdle in the way of the company is the period between the decision of the Tribunal and the date of the application (from July 7, 1964, to August 21, 1964). The application which was filed under section 33A of the Act is completely barren of any explanation for this delay which had to be properly and satisfactorily explained. In Sitaram Ramcharan v. M. N. Nagarshana, while considering the question of condonation of delay with reference to the second proviso to section 15(2) of the Payment of Wages Act, it was observed by this court" The proviso with which we are concerned has prescribed the limitation of six months for the institutition of the application itself, and so the principle laid down in Lingleys case can have no application to the question which we have to decide. Indeed the present proviso is in substance similar to the provision in section 5 of the Limitation Act and Mr. Phadka has fairly conceded that there is consensus of judicial opinion on the question of the construction of section 5. It cannot be disputed that, in dealing with the question of condoning delay under section 5 of the Limitation Act, the party has to satisfy the court that he had sufficient cause for not preferring the appeal or making the application within the prescribed time, and this has always been understood to mean that the explanation has to cover the whole of the period of delay (vide Ram Narain Joshi v. Parameshwar Narain Mehta ). Therefore, the finding recorded by the authority that the appellants have failed to establish sufficient cause for their inaction between May 2, 1952, and the respective dates on which they filed their present applications is fatal to their claim2. These observations are fully applicable to the facts of the present case.