J.K. Synthetics vs Income Tax Appellate Tribunal
1991 Latest Caselaw 250 Del

JUDGMENT

B.N. Kirpal, J.

(1) The short question which arises for consideiation in this writ petition is whether the application under Section 256(1) of the Income-tax Act, 1961 filed by the Commissioner of Income-tax was within time.

(2) By order dated 25th April, 1989 passed by the Income tax Appellate Tribunal (hereinafter referred to as Tribunal) the appeals filed by the department against the orders of the Commissioner of Income-tax (Appeals) wore dismissed. These appeals had been filed by the Income-tax Officer before the Tribunal because the Commissioner Income-tax (Appeals) had deleted the penalty of Rs. 12 lacs which had been levied on the petitioner herein by the Ito under Section 271(l)(c) of the Act.

(3) Under the provision of Section 254(3) the aforesaid order dated 21st April, 1989 was served on the Chief Commissioner of Income-tax, New Delhi on 28th April, 1989. The Chief Commissioner, in his turn, served the said order on the Cit, Delhi (Central 1) on 14th August, 1989. By reckoning the period of 60 days, within which reference application has to be filed, the Cit, Delhi (Central 1) filed an application under Section 256(1) on 12th October, 1989.

(4) On the hearing of the application under Section 256(1) an objection was raised by the petitioner hereinbefore the Tribunal to the effect that the application under Section 256(1) was barred by time. By the impugned order dated 5th December, 1989 the Tribunal came to the conclusion that the limitation had to be reckoned from 14th August, 1989, when service was effected on Commissioner of Income-tax (Central 1), New Delhi a.nd not with effect from 28th April, 1989 when service had been effected on the Chief Commissioner. It is this part of the order of the Tribunal which is sought to be challenged before us in this petition under Article 226 of the Constitution.

(5) The learned counsel for the petitioner has vehemently contended that when the Tribunal decides the appeal and passes an order under Section 254, then a choice is given under subsection (3) of Section 254 as to whom the order should be served. Prior to 1st April, 1988 sub-section (3) of Section 254 required the Tribunal to send a copy of its order to the assessed and to the Commissioner- It is only by virtue of the Taxation Laws (Amendment) Act, 1987 that with effect from 1st April, 1988 the words 'Chief Commissioner' have also been inserted in Section 254(3). It is submitted by Mr. Syali that the purpose of amending Section 254(3) would be rendered completely redundant if, for the purpose of determining the period of limitation under Section 256(1), the date of service on the Chief Commissioner is to be ignored. Explaining the historical background it was submitted that the Tribunal was finding it difficult to serve its orders on the relevant Commissioners of Income-tax. Due to frequent change injurisdiction, which changes were never or seldom intimated to the Tribunal, it was not known as to which was the Commissioner who had administrative charge over the Income-tax Officer who bad filed an appeal decided by the Tribunal. In order to obviate this difficulty the Legislature amended under Section 254(3) and the result of this was that orders could be served cither on the Commissioner of Income-tax or on the Chief Commissioner. The purpose for amending the said sub-section clearly was to enable the Tribunal to effect valid service.

(6) There can be no doubt that Section 254(3) was amended so as to enable the Tribunal to serve a copy of its order either on the Chief Commissioner or the Commissioner. But in the present case we are not concerned with The service of order under Section 254(3). What we have to consider is whether the reference application under Section 256(1) has been filed within the period of limitation.

(7) Unlike Section 254(3) there has been no amendment in Section 256(1) or Section 256(2). Under Section 256(1) it is an assessed or the Commissioner who may "within 60 days of the date upon which he is served with notice of an order under Section 254" file an application seeking reference to High Court. The words 'Chief Commissioner' are conspicuous by their absence in Section 256. In effect what Mr. Syali wants us to do is to read the words 'Chief Commissioner' in Section 256(1). To put it differently the amendment which has been made with effect from 1st April, 1988 in Section 254(3) is sought to be read into Section 256(1). In our opinion this cannot be permitted. Even though the purpose of amending Section 254(3) may have been to sec that valid service, for the period of limitation, is effected on the Chief Commissioner. but for computing the period of limitation we are constrained to confine our attention only to Section 256(1). The Legislature by design or by accident has not provided for service on the Chief Commissioner to be regarded as a valid service for the purpose of computing the period of limitation under Section 256(1). The said provision is clear and unequivocal and it is only when either the assesses or the Commissioner who is served with the notice of an order under Section 254 that they can, thereafter, file an applicatioa under Sectioa 256(1).

(8) Similar contention bad been raised before us in Itc 25/90. In that case the order under Section 256(1) had been served on the Chief Commissioner. Thereafter the Commissioner of Income-tax had filed an application under Section 256(2) aid it was contended by the assesses that the date of service on the Chief Commissioner would be starting point of limitation. On a correct interpretation of Section 256(2), which is in para materia with the provisions of Section 256(1), we came to the conclusion vide our order dated 24th January, 1991 that what was the service on the Commissioner of Income-tax concerned and not service on the Chief Commissioner. It is the Commissioner of Income-tax who alone has the jurisdiction of filing an application either under Section 256(1) or under Section 256(2) and, therefore it is imperative that it is he who should be served with a copy of the order under Section 254 or under Section 256(1). as the case may be, for the purpose of computing the period of limitation.

(9) For the aforesaid reasons, we do not find any merit in this writ petition and the same is accordingly dismissed.