- (1.) THIS is a reference under section 21 of the Excess Profits Tax Act (read with section 66 (2) of the Income-tax Act) relating to the chargeable accounting periods ending on 31st of March, 1944, 31st of March, 1945 and 31st of March, 1946. The assessee had preferred appeals under the Excess Profits Tax Act from assessments made in respect of the three chargeable accounting periods mentioned above, and the 11th September, 1947, was fixed for hearing of these appeals by the Appellate Assistant Commissioner of Excess Profits Tax at his camp at Bareilly. Arguments were heard and it appears that the Assistant Commissioner passed orders on the same date, for the appellate orders are dated the 11th September, 1947. Copies of these orders were sent to the assessee presumably to communicate to him the orders passed in the appeals and these were received on the 20th September, 1947. The assessee was not satisfied with the decision of the Appellate Assistant Commissioner and preferred appeals to the Income-tax Appellate Tribunal. The appeals were sent on the 11th November, 1947, and were received by the Tribunals office at Bombay on the 18th November, 1947. The Assistant Registrar of the Tribunal made a note that these appeals were not in order as copies of the Excess Profits Tax Officers orders were not furnished. On the 22nd November, these appeals were sent to the Allahabad Bench of the Tribunal for disposal. Notices were sent to the parties for the hearing of the appeals fixing the 2nd June, 1948, as the date for hearing. On this date these appeals were heard by the Tribunal and were dismissed on the following date, the 3rd June, 1948. Against these orders of the Tribunal, the assessee filed three applications supporting to be under section 21 of the Excess Profits Tax Act read with section 66 (1) of the Income-tax Act requesting the Tribunal to refer to this Court certain question of law alleged to arise out of the appellate orders of the Tribunal. These applications were dismissed on the 4th November, 1948, on the ground that the orders of the Tribunal passed on the 3rd June, 1948, were passed under section 33 (2A) of the Income-tax Act and that no question of law arising therefrom could legally be referred to this Court. In the Tribunals opinion questions of law arising out of the orders passed under section 33 (4) of the Income-tax Act alone may be referred to the High Court.
(2.) THE assessees contention before the Tribunal appears to have been, inter alia : (1) that in computing the period of limitation the date of the order from which the prescribed period of time is to run means the date of the knowledge of the order as the assessee became aware of the order only on the 20th September, 1947; (2) that rule 17A of the Excess Profits Tax Rules had been amended by a notification dated the 21st February, 1948, by inserting the words of receipt after the word date" and it is the amended rule as existing on the date of the order passed by the Tribunal that should have been applied in the case; and (3) that in the alternative, section 67 of the Income-tax Act having been made applicable by section 21 of the Excess Profits Tax Act, the period between the date of the order (11th September, 1947) and the date on which the copies were received by the assessee (20th September, 1947) should be excluded in computing copies of the Appellate Assistant Commissioners orders. These contention did not find favour with the Tribunal which dismissed the appeals as mentioned above. The reference application under section 66 (1) were also dismissed as the Tribunal took the view that the orders passed by the Tribunal dismissing the appeals as barred by time were orders under section 33 (2A), and not under 33 (4) and as such the application for reference were incompetent. On a petition being made to this Court, a Bench of this Court passed an order under section 66 (2) on the 5th October, 1950, directing the Tribunal to state the case and to refer such questions of law as arose in the case. Accordingly the Tribunal has referred the following questions of law. 1. Whether in view of the language of rule 17A of the Excess Profits Tax Act from the date of the order the limitation of 60 days is to be computed from the 11th September, 1947, or from 20th September, 1947, the date on which assessee received the orders ? 2. Whether rule 17A as amended by Notification 2, Camp, dated 21st February, 1948, is retrospective in character and applies to the appeals filed before the Tribunal ? 3. Whether on the facts and in the circumstances of the case, the period of 9 days reckoned from 11th September, 1947, to 20th September, 1947, both days inclusive is the period requisite for obtaining copies of the Appellate Assistant Commissioners orders appealed against ? 4. Whether section 67A, Income-tax Act, applies to the excess profits tax appeals ? 5. Whether on the facts and in the circumstances of this case the dismissal of the assessees appeals as barred by limitation after the issue of notices to the parties fixing the date and place of hearing is an order passed under section 33 (2A) of the Income-tax Act or is an order passed under 33 (4) of the Income-tax Act ? 3. The first two question relate to the applicability of rule 17A of the Excess Profits Tax Act. Under section 19 (2) of the Excess Profits Tax Act appeals to the Income-tax Appellate Tribunal may be filed within the prescribed time and in the prescribed manner. Section 27 of the Act empowers the Central Board of Revenue to make rules for carrying out the purposes of this Act, and the time and the manner required to be prescribed under section 19 (2) have been provided for by some of the rules. Among the Excess Profits Tax Rules, 1940, rule 17A, as it stood at the time when the appeal to the Tribunal was preferred, reads as follows : An appeal to the Appellate Tribunal under sub-section (2) of section 19 of the Act against an order of the Appellate Assistant commissioner of Excess Profits Tax under section 16 or 17 of the Act shall be made at any time before the expiry of 60 days from the date of such order. The period of sixty days which is prescribed under this rule was thus to commence running from the date of the order of the Appellate Assistant Commissioner. By a notification dated the 21st February, 1948, the Central Board of Revenue amended this rule by inserting therein after the word date" the words of the receipt. The rule, therefore, as amended, provided that the period prescribed should start running from the date of the receipt of the order of the Appellate Assistant Commissioner. If the rule as it originally stood was applicable the appeal, subject to other considerations, would be beyond time. If the amended rule was applicable the appeal would be obviously within time. Learned counsel for the appellant urged that on the 3rd June, 1948, when the appeals came up before the Tribunal and were dismissed rule 17A stood in its amended form. The Tribunal was not right, it is contended, in applying the provisions which no longer existed. Learned counsel contends that the rule was a rule of procedure and, therefore the law of procedure as existing at the time when the Tribunal had to decide the question was applicable.
(3.) WE are unable to accept this contention. The question to be decided is as to whether the appeals when filed were or were not within time. The date on which the matter came up for decision before the Tribunal is hardly relevant for the decision of the question. On the date when the appeals were governed was rule 17A in its unamended form. A right of appeal is a statutory right and the statutory provision conferring the right of appeal has to be consulted to determine the nature and extent of that right. Reading section 19 (2) of the Excess Profits Tax Act with rule 17A as it existed on the date when the appeal was filed, it is clear that the appeals were not within time unless the period is enlarged under other provision of the law. Rule 17A was amended on the 21st February, 1948. If the applicants contention be accepted the appeal to the Tribunal was within time if it came up for consideration before the Tribunal on any date subsequent to the 21st February, 1948. If, on the other hand, the Tribunal had to decide the matter on the 20th February, 1948, or on an earlier date, the appeal would have been found to be beyond time because the question would have had to be decided with reference to the original rule 17A. Thus the appeals filed by the applicant would be barred by time or within time according as the Tribunal had to consider the matter before of after the amendment to rule 17A. What has to be decided is whether the appeals as filed on the 18th November, 1947, were on that date within time or beyond time. In our opinion, the question whether the appeals were or were not within time should be answered with reference to the rule or law prevailing at the time when the appeals were filed. In rule 17A of the Excess Profits Tax Rules the date of the order is the starting point for the period prescribed within which the appeal had to be filed. The phrase from the date of the order came up for consideration before a Bench of the Madras High Court in A.M. Muthiah Chettiar v. Commissioner of Income-tax Madras. In that case the applicant was assessed to income-tax by an order dated the 4th February, 1948. He had received the order on the 24th February, 1948, and on the 18th February, 1949, he moved a revision application to the commissioner of Income-tax under section 33A (2) of the Income-tax Act. That section reads as follows : The Commissioner may, on application by an assessee for revision of an order under this Act passed by any authority subordinate to the Commissioner made within one year from the date of the order...... call for the record of the proceeding in which such order was passed........... may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit.;