COMMISSIONER OF INCOME TAX Vs. KERALA TRANSPORT CO

JUDGEMENT

(1.) THOUGH in IT Reference No. III of 1998, a question of vital importance has been raised about jurisdiction of the Tribunal to rceconsider a question of limitation, while exercising powers under section 250 of the Income Tax Act, 1961 Income Tax Act, we do not think it nececssary to go into that conclusion in detail in view of the position as emerges in connected IT Reference No. 174 of 1997. Reference to the factual aspects is nceessary for adjudication of the question raised in that I.T.R., which we shall quote a little later.

(2.) THE assessee filed its returns for the assessment year 1986-87 oil 9-2-1989, declaring a total income of Rs. 83,54,950. In response to the notice under section 143(2) of the Act, books of account were produced and finally the income was assessed at Rs. 1,45,06,670. THE demand after adjustment of advance tax and taking into account interest payable under sections 139(8), 215 and 216 came to Rs. 52,91,476. THE matter was challenged in appeal before the Commissioner (Appeals), Calicut. THE assessment was completed on 30-3-1989 and the appeal was filed on 26-4-1989. Before going into merits, the Cornmissioner (Appeals) thought it necessary to adjudicate the question whether the appeal filed by the assessee was to be entertained. When the assessee filed a return of income, tax to be paid under section 140A of the Act was Rs. 13,68,006. When the appeal was preferred on 26-4-1989 also, admitted tax was not paid. An application for condonation of delay along with another set of appellate papers was filed on 22-6-1989. Prior to that on 20-6-1989, the admitted tax had been paid, In the application for condonation of delay in filing the appeal, it was indicated that due to liquidity cash problems tile payment could not be made earlier. In between the date of completion of assessment and the date on which appeal was filed on 1-4-1989, there was a change in law regarding the admissibility of appeals, with effect from 1-4-1989. As per the amended provisions, the powers of the Commissioner (Appeals) and the Deputy Commissioner (Appeals) to condone the lapse of non-payment of admitted tax has been withdrawn. THErefore, according to the assessee, it had paid the tax due and another set of appellate papers were filed. Though in the application that was filed subsequently, plea of cash crunch had been raised, subsequently at the time of hearing it was contended that original appeal filed on 26-4-1989 should be taken as valiid appeal. THE Commissioner (Appeals) was of the view that it was a fit case for condoning lapse in the payment of admitted tax at the time of thing the appeal and, accordingly, admitted the appeal. THE appeal was heard on merits and was partly allowed. THE revenue preferred second appeal before the Tribunal, Cochin Bench, Cochin. THE first ground of challenge was the conclusion of the Commissioner (Appeals) regarding condonation of delay and admissiblity of appeal. THE Tribunal affirmed the conclusion of the Commissioner (Appeals) though it indicated different reasons also.

(3.) COMING back to the reference filed by the revenue, it is to be noted that the position of section 249 of the Act before amendment and after amendment with effect from 1-4-1989 is as follows :