An appeal presented out of time is an appeal, and an order dismissing it as time-barred is one passed in appeal

HIGH COURT OF KERALA

K.H. Traders

Versus

Commissioner of Income-tax

WP(C) No. 21307 of 2010(K)

Date of Pronouncement:  January 9, 2013

JUDGMENT

1. Petitioner is an assessee under the Income-tax Act. By Ext.Pl, assessment for the year 2000-2001 was completed. Against that order, the petitioner filed an appeal with an application to condone delay of 2 years, 10 months and 8 days. It appears that petition to condone delay was posted on three occasions and despite notice, the petitioner did not appear before the appellate authority. By order dated 28.03.2007, the appellate authority declined to condone delay and dismissed the appeal.

2. Subsequently, the petitioner filed Ext.P2 revision under Section 264 of the Income-tax Act. Along with the revision, the petitioner also filed an application to condone delay of 4 years, 9 months and 29 days. The revisional authority rejected the revision by Ext.P6 order. In this order, the revisional authority has dealt with the maintainability of the revision, the tenability of the request for condonation of delay and also the merits of the revision itself. On all these grounds, it has been decided against the petitioner. It is challenging this order, the writ petition is filed.

3. I heard the learned counsel for the petitioner and the learned standing counsel appearing for respondents.

4. In my view, if the maintainability of the revision is to be upheld, it is unnecessary to examine the correctness of the findings of the revisional authority on the other two issues.

5. Insofar as the finding on the maintainability of the revision is concerned, the finding has been arrived at on the basis of Section 264(4) of the Income-tax Act.

6. Section 264(4) of the Income-tax Act reads thus:

The Commissioner shall not revise any order under this section in the following cases:

(a)  Where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired or, in the case of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal; or

(b)  where the order is pending on an appeal before the Deputy Commissioner (Appeals); or

(c)  where the order has been made the subject of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal.

7. Reading of this provision shows that the power of revision can be exercised by the revisional authority only if the conditions specified in the section are satisfied.

8. Clause(c) states that where an order has been made the subject of an appeal, the Commissioner shall not revise the order. The question is whether Ext.Pl order has been subject to an appeal to the Commissioner (Appeals). As already stated, the petitioner had filed an appeal to the Commissioner (Appeals) with an application to condone delay of 2 years, 10 months and 8 days. The Commissioner declined to condone delay and on that basis, dismissed the appeal on 28.03.2007. Contention raised by the petitioner is dismissal of an appeal without condoning delay is not dismissal of the appeal and therefore, Clause(c) does not stand in their way.

9. On the other hand, relying on the judgment of the Apex Court in Mela Ram & Sons v. CIT [1956] 29 ITR 607, the counsel for the Revenue contended that the petitioner had not waived their right to file an appeal and the order dated 28.03.2007 dismissing the appeal without condoning the delay is an order in the appeal. Therefore, according to him, the remedy of revision was not available to the petitioner.

10. In the judgment in Mela Ram & Sons’ case (supra) relied on by the Revenue, an appeal was dismissed without condoning delay and the question was considered whether such an order is an order in the appeal. In this judgment, after referring to the conflicting judgments of various High Courts and the previous judgment of the Apex Court, the Apex Court finally concluded thus:

“On the principles laid down in these decisions, it must be held that an appeal presented out of time is an appeal, and an order dismissing it as time-barred is one passed in appeal.”

In the light of this binding precedent, there is no escape from the conclusion that the order dated 28.03.2007 dismissing the appeal filed by the petitioner is an order in the appeal filed by the petitioner. Once, it is so held as a necessary consequence, I must also hold that the petitioner has not waived his appellate right, to maintain an application for revision under section 264 of the Act. If that be so, the finding of the revisional authority that in view of section 264(4), the revision filed by the petitioner was not maintainable, has to be upheld. If that be so, it is unnecessary to enter into the correctness of the other findings of the revisional authority, the writ petition therefore, fails and it is dismissed.

NF