Jaswant Singh Bambha v. Central Board of Direct Taxes & Ors.

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The Tax Publishers2005 TaxPub(DT) 0850 (P&H-HC) : (2005) 002 (I) ITCL 0393 : (2005) 272 ITR 0001 : (2005) 193 CTR 0184 : (2005) 142 TAXMAN 0528 Jaswant Singh Bambha v. Central Board of Direct Taxes & Ors () INCOME TAX --Refund----LIMITATIONCondonation of delay-- Catch Note: The petitioner had filed a refund claim for the assessment year 1995-96 under section 237. Since the claim was made after the period of limitation prescribed in section 239, he moved an application for condonation of delay under section 119(2)(b) which had been rejected by the Central Board of Direct Taxes without assigning any reasons. Held: By virtue of power conferred on the CBDT under section 119(2)(b) it is fully competent to admit an application for refund even after the expiry of the period prescribed under section 239 for avoiding genuine hardship in any case or class of cases. Ratio: Mandatory limitation provisions of section 239 are amenable to relaxation by the CBDT under section 119(2)(b) as section 239 had not expressly excluded the application of section 5 of the Limitation Act. Held: In Azadi Bachao Andolan (2003) 263 ITR 706 (SC), the Apex Court has considered the scope of clause (a) of section 119(2) which empowers the Board to relax the rigours of various provisions of the Act by issuing general or special orders if it considers it necessary or expedient to do so for the purpose of proper and efficient management of the work of assessment. [Para 6] It is true that the observations in that case have been made in the context of clause (a) of section 119(2) but the same shall apply in full force even to clause (b) of the said provision. Clause (a) deals with the power to grant relaxation from the provisions of several sections enumerated therein. Clause (b) deals with power to grant relaxation from the period of limitation to avoid genuine hardship in any case or class of cases. By admitting a belated claim for refund, the Board neither interferes with the course of assessment of any particular assessee nor with the discretion of the CIT (A) which, according to the Supreme Court in Azadi Bachao Andolan (2003) 263 ITR 706 (SC), is the only restriction on the powers of the Board under section 119. The matter can be looked at from another angle as well. Section 5 of the Limitation Act, 1963, permits the admission of an application beyond the period of limitation if the applicant satisfies the court that he had sufficient cause for not making the application within such period. This provision has general application. However, a departure to this general rule is made in section 29(2),of the said Act. The said provision clearly shows that section 5 of the Limitation Act shall apply in cases of special or local laws to the extent to which they are not expressly excluded by such special or local laws. In other words, section 5 of the Limitation Act cannot be resorted to only when it is expressly excluded by a special or local law. Section 239 of the Act has not expressly excluded the application of section 5 of the Limitation Act. In fact, a conjoint reading of sections 239 and 119(2) clearly shows that the application of section 5 of the Limitation Act to the claims of refund has been specifically included in the Act. Thus, the power given to the Board under section 119(2) of the Act to entertain a belated claim is nothing but incorporation of the provisions of section 5 of the Limitation Act, 1963. In view of the above, by virtue of power conferred on the Board under section 119(2) of the Act, it is fully competent to admit an application for refund even after the expiry of the period prescribed under section 239 for avoiding genuine hardship in any case or class of cases. Case Law Analysis: Overruled : Niranjan Dass v. CBDT (2004) 266 ITR 489 (P&H)Applied :Union of India v. Azadi Bachao Andolan (2003) 263 ITR 706 (SC) (2003) 1 RC 742 (SC) Decision: In assessee's favour. Date of Judgment: 1 November 2004 Assessment Year: 1995-96 Cases Referred: Anantharamaiah (H.S.) v. CBDT (1993) 201 ITR 526 (Karn), Associated Electro Ceramics v. Chairman, C1313T (1993) 201 ITR 501 (Karn), CCE v. Dhiren Chemical Industries (2002) 254 ITR 554. Dharampal Singh Pall v. CBDT (2001) 250 ITR 629 (MP), Ellerman Lines Ltd. v. CIT (1971) 82 ITR 913 (SC), Gujarat Electric Co. Ltd. v. CIT (2002) 255 ITR 396 (Guj), John Shalex Paints (P) Ltd. v. CBDT (1993) 201 ITR 523 (Karn), Kusumben M. Parikh v. CBDT (2000) 242 ITR 501 (Guj), Mysore Sales International Ltd. v. Member, CBDT (1998) 233 ITR 663 (Karn), Pallavan Transport Consultancy Services Ltd. v. Union of India (1998) 233 ITR 745 (Mad), Sant Lal v. Union of India (1996) 222 ITR 375 (P&H) and UCO Bank v. CIT (1999) 237 ITR 889 (SC) and K. P. Varghese v. ITO (1981) 131 ITR 597 (SC). SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2005 TaxPub(DT) 0850 (P&H-HC) : (2005) 002 (I) ITCL 0393 : (2005) 272 ITR 0001 : (2005) 193 CTR 0184 : (2005) 142 TAXMAN 0528

Jaswant Singh Bambha v. Central Board of Direct Taxes & Ors ()

INCOME TAX

--Refund----LIMITATIONCondonation of delay--

Catch Note:

The petitioner had filed a refund claim for the assessment year 1995-96 under section 237. Since the claim was made after the period of limitation prescribed in section 239, he moved an application for condonation of delay under section 119(2)(b) which had been rejected by the Central Board of Direct Taxes without assigning any reasons. Held: By virtue of power conferred on the CBDT under section 119(2)(b) it is fully competent to admit an application for refund even after the expiry of the period prescribed under section 239 for avoiding genuine hardship in any case or class of cases.

Ratio:

Mandatory limitation provisions of section 239 are amenable to relaxation by the CBDT under section 119(2)(b) as section 239 had not expressly excluded the application of section 5 of the Limitation Act.

Held:

In Azadi Bachao Andolan (2003) 263 ITR 706 (SC), the Apex Court has considered the scope of clause (a) of section 119(2) which empowers the Board to relax the rigours of various provisions of the Act by issuing general or special orders if it considers it necessary or expedient to do so for the purpose of proper and efficient management of the work of assessment. [Para 6] It is true that the observations in that case have been made in the context of clause (a) of section 119(2) but the same shall apply in full force even to clause (b) of the said provision. Clause (a) deals with the power to grant relaxation from the provisions of several sections enumerated therein. Clause (b) deals with power to grant relaxation from the period of limitation to avoid genuine hardship in any case or class of cases. By admitting a belated claim for refund, the Board neither interferes with the course of assessment of any particular assessee nor with the discretion of the CIT (A) which, according to the Supreme Court in Azadi Bachao Andolan (2003) 263 ITR 706 (SC), is the only restriction on the powers of the Board under section 119. The matter can be looked at from another angle as well. Section 5 of the Limitation Act, 1963, permits the admission of an application beyond the period of limitation if the applicant satisfies the court that he had sufficient cause for not making the application within such period. This provision has general application. However, a departure to this general rule is made in section 29(2),of the said Act. The said provision clearly shows that section 5 of the Limitation Act shall apply in cases of special or local laws to the extent to which they are not expressly excluded by such special or local laws. In other words, section 5 of the Limitation Act cannot be resorted to only when it is expressly excluded by a special or local law. Section 239 of the Act has not expressly excluded the application of section 5 of the Limitation Act. In fact, a conjoint reading of sections 239 and 119(2) clearly shows that the application of section 5 of the Limitation Act to the claims of refund has been specifically included in the Act. Thus, the power given to the Board under section 119(2) of the Act to entertain a belated claim is nothing but incorporation of the provisions of section 5 of the Limitation Act, 1963. In view of the above, by virtue of power conferred on the Board under section 119(2) of the Act, it is fully competent to admit an application for refund even after the expiry of the period prescribed under section 239 for avoiding genuine hardship in any case or class of cases.

Case Law Analysis:

Overruled : Niranjan Dass v. CBDT (2004) 266 ITR 489 (P&H)Applied :Union of India v. Azadi Bachao Andolan (2003) 263 ITR 706 (SC) (2003) 1 RC 742 (SC)

Decision:

In assessee's favour.

Date of Judgment:

1 November 2004

Assessment Year:

1995-96

Cases Referred:

Anantharamaiah (H.S.) v. CBDT (1993) 201 ITR 526 (Karn), Associated Electro Ceramics v. Chairman, C1313T (1993) 201 ITR 501 (Karn), CCE v. Dhiren Chemical Industries (2002) 254 ITR 554. Dharampal Singh Pall v. CBDT (2001) 250 ITR 629 (MP), Ellerman Lines Ltd. v. CIT (1971) 82 ITR 913 (SC), Gujarat Electric Co. Ltd. v. CIT (2002) 255 ITR 396 (Guj), John Shalex Paints (P) Ltd. v. CBDT (1993) 201 ITR 523 (Karn), Kusumben M. Parikh v. CBDT (2000) 242 ITR 501 (Guj), Mysore Sales International Ltd. v. Member, CBDT (1998) 233 ITR 663 (Karn), Pallavan Transport Consultancy Services Ltd. v. Union of India (1998) 233 ITR 745 (Mad), Sant Lal v. Union of India (1996) 222 ITR 375 (P&H) and UCO Bank v. CIT (1999) 237 ITR 889 (SC) and K. P. Varghese v. ITO (1981) 131 ITR 597 (SC).