Commissioner Of Income Tax vs Taylor Instrument Co. India Ltd.
1992 Latest Caselaw 317 Del

JUDGMENT

B.N. Kirpal, J.

1. The petitioner had filed an application before the Income-tax Tribunal under s. 256(1) of the IT Act seeking reference of the following two questions to this Court :

"(1) Whether on the facts and in the circumstances of the case, the ITAT was correct in law in holding that 2/3rd of the expenditure of Rs. 20,94,923 incurred in accordance with the collaboration agreement for technical know-how was allowable as revenue expenditure ?

(2) Whether on the facts and in the circumstances of the case, the ITAT was correct in law in holding that deduction was allowable for the payment of Rs. 1 lakh by the assessed to the association of Indian Engg. Industries as business expenditure ?"

2. When the above questions were not referred, the present application under s. 256(2) was filed.

The last date for filing of the application expired on 15th October, 1991. As the Court was closed during Dussehra holidays, the application was not filed on that date. It is only on Monday, the 21st October, 1991 that the application was filed. It was thereupon brought to the notice of the counsel for the petitioner that there was a delay in filing of the application because the Registry of the Court had in fact opened on 19th October, 1991. Because of the delay in filing the application, the petitioner has filed an application under s. 5 of the Limitation Act in which it is, inter alia, stated that it was due to a genuine and an inadvertent mistake that the petitioner bona fide believed that the Court would open only on 21st October, 1991. The prayer is that the delay in filing the petition by one day should be condoned.

3. On behalf of the respondents it is contended that under s. 256(2) a period of limitation is specified and this Court has no power to condone the delay.

4. In our opinion the contention of the learned counsel that this Court lacks the power to condone the delay in an application filed under s. 256(2) is not correct.

There is no doubt that special provision has been made in the IT Act specifying the period of limitation within which application under s. 256(1) and 256(2) can be filed. Whereas under sub-s. (1) of s. 256 the power which is given to the Tribunal to condone the delay is only up to the extent of 30 days, there is no such provision incorporated in sub-s. (2) of s. 256. A petitioner is required to file an application under s. 256(2) within a period of six months. The question which arises is whether the provisions of s. 5 of the Limitation Act are applicable or not.

5. Under the provisions of Limitation Act of 1908 s. 5 was not applicable to every application filed under the said Act. Furthermore, s. 29(2) of the Limitation Act, 1908, inter alia, made the provisions of s. 3 of the Limitation Act applicable to special or local law. It further provided that the provisions contained in s. 4, ss. 9 to 18 and s. 22 shall also apply only in so far as, and to the extent to which they are not expressly excluded by such special or local law. Sec. 29, therefore, did not make the provisions of s. 5 of the Limitation Act, 1908 applicable to every special or local law.

6. Under the provisions of the 1963 Limitation Act, with which we are concerned, the position is different. Firstly s. 2(b) defines an application to include a petitioner. Secondly, the wording of s. 1963 Act is radically different from that of s. 5 of 1908 Act, inasmuch as, under the present s. 5 delay can be condoned even in respect of an application which is required to be filed in Court. What is more important is the provision of s. 29(2) which reads as follows :

"29(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of s. 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in ss. 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law."

7. In our opinion the reading of the aforesaid provision leaves no manner of doubt that the Court does have power to exercise jurisdiction under s. 5 of the Limitation Act, 1963. To the same effect is the decision of the Gauhati High Court in the case of A. Gupta Trust Estate vs. CWT (1984) 148 ITR 366 (Gau) with which we are in respectful agreement. The case of Lala Ganesh Prasad In re (1942) 10 ITR (All) referred to by Shri Bishamber Lal is of little assistance because that refers to the provisions of the Limitation Act, 1908.

8. On merits of the application for condensation of delay, Mr. Bishamber Lal states that he does not wish to oppose the application. We, therefore, allow the application and condone the delay.

9. Coming to the merits of the petition under s. 256(2), a question similar to question No. 1 has been directed to be referred by this Court earlier.

10. As regards question No. 2, we find that because of the ratio of the decision of this Court in ITC 267/78 (CIT vs. The Delhi Cloth & General Mills Co. Ltd), the reference of the said question is not called for. In that case contribution was made by the assessed to the Rajasthan Chamber of Commerce towards construction of a building. Following the ratio of the decisions of the Supreme Court in the case of Lakshmi Ji Sugar Mills Co. Pvt. Ltd. vs. CIT and the case of L. H. Sugar Factory & Oil Mills vs. CIT it was held by this Court that though a question of law did arise as to whether the expenditure was revenue or capital in nature, nevertheless the answer to the same was self-evident as it was covered by the aforesaid two decisions of the Supreme Court. In DCM's case (supra) this Court, therefore, did not call for a reference.

11. In the present case, a sum of Rs. 1 lakh was contributed to the Association of Indian Engg. Industries. This contribution was made for the purpose of constructing a building just as in DCM's case (supra) contribution was made for the construction of building of Rajasthan Chamber of Commerce. We find that the principle involved in this case is identical to that which was involved in the case of DCM.

12. Following the decision dt. 17th February, 1981 of this Court in DCM's case we are of the opinion that the answer to the second question is self-evident as the ration of the decision of the Supreme Court in Lakshmi Ji Sugar Mills' case (supra) and L. H. Sugar Factory & Oil Mills' case (supra) is clearly applicable.

13. For the aforesaid reasons we direct the Tribunal to state the case and refer the aforesaid question No. 1 only to this Court.

14. There will be no order as to costs.