Commissioner of Income-tax Vs. Senapati and Partners - Court Judgment

Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot be entertained i.e. cannot be admitted for consideration unless the statutory deposit is made and for this purpose the court has the discretion either to grant time to make the deposit or not. no formal order condoning the delay is necessary, an order of adjournment would suffice. the provisions of limitation embodied in the substantive provision of the sub-section (1) of section 173 of the act does not extend to the provision relating to the deposit of statutory amount as embodies in the first proviso. therefore an appeal filed within the period of limitation or within the extended period of limitation, cannot be admitted for hearing on merit unless the statutory deposit is made either with the memo of appeal or on such date as may be permitted by the court. no specific order condoning any delay for the purpose of deposit under first proviso to sub-section (1) of section 173 is necessary. [new india assurance co. ltd. v md. makubur rahman, 1993 (2) glr 430 and new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. a. pasayat, j.1. the following questions have been referred to this court under section 256(1) of the income-tax act, 1961 (in short 'the act '), by the income-tax appellate tribunal, cuttack bench (in short ' the tribunal ') :' (1) whether, on the facts and in the circumstances of the case, the income-tax appellate tribunal was justified in holding that the interest amount of rs. 51,317 was not liable to tax?(2) whether, on the facts and in the circumstances of the case, the tribunal was justified in holding that a sum of rs. 1,12,124 out of the award amount for execution of work of rs. 1,46,101 was liable to tax during the assessment year under consideration ?'2. the controversy centres round the taxability of certain amounts received by messrs. senapati and partners (hereinafter referred to as the 'assessee') for execution of contract works executed by it and the interest received on the basis of an arbitration award.3. the background facts as revealed from the statement of the case drawn up by the tribunal are as follows :the assessee is a partnership firm deriving income from the business in executing contract works. for the assessment year 1980-81, the assessee did not execute any contract work but received certain amounts as a result of an arbitration award relating to the contract work executed in the earlier years. the following amounts were awarded by the arbitrator : rs.(i)towards execution of work1,46,101(ii)interest for the period from june 1, 1973, to july 31, 1977 51,317 1,97,4184. the award was upheld by this court in miscellaneous appeal no. 68 of 1978 by judgment dated february 23, 1979. the amount was received by the assessee on june 4, 1979. the assessee filed a return calculating the income at 12.5 per cent. on rs. 1,46,101. the assessing officer was of the opinion that no expenses for the execution of the contract were incurred during the previous year under consideration and so the profit could not be estimated at 12.5 per cent. as was shown in the assessee's case for the previous years. the income-tax officer deducted the expenses debited to the trading and profit and loss account and another sum of rs. 25,600 as directed by the inspecting assistant commissioner of income-tax to arrive at a net profit of rs. 1,12,124 from the gross receipt of rs. 1,46,101. so far as the interest of rs. 51,317 is concerned, the assessing officer observed that, in view of this court's decision in govinda choudhury and sons v. cit : [1977]109itr497(orissa) , the interest was not taxable, but assessed the entire amount of interest as income of the assessee since, according to him, the matter was under challenge before the supreme court. in appeal, the commissioner of income-tax (appeals) confirmed the assessment of rs. 1,12,124, but deleted the inclusion of rs. 51,317 relying on the decision in govinda choudhury and sons' case : [1977]109itr497(orissa) . both the assessee and the revenue filed appeals before the tribunal. so far as the assessee's appeal was concerned, the tribunal relied on its earlier decision in the case of b. p. r. construction (i. t. a. no. 32/ctk of 1980), and confirmed the order. so far as the department's appeal was concerned, the same was dismissed in view of this court's decision in govinda choudhury and sons' case : [1977]109itr497(orissa) . thus, at the instance of the revenue and the assessee, the aforesaid questions have been referred to this court.5. so far as taxability of interest is concerned, this court had occasion to consider the question in govinda choudhury and sons' case : [1977]109itr497(orissa) and held that the interest was not taxable. we are of the same view and hold that, in view of the law prevailing at the relevant time, the payment of interest should not have been taken as income and, therefore, the first question referred to us is answered in the affirmative, in favour of the assessee and against the revenue.6. so far as the second question is concerned, we find that the tribunal relied on its earlier decision in b. p. r. construction and held that the conclusions of the assessing officer and the first appellate authority were in accordance with law. it is brought to our notice by mr. r. p. kar, appearing for the revenue, that the correctness of the decision in b. p, r. construction referred to above rendered by the tribunal was the subject-matter of adjudication in s. j. c. no. 20 of 1983 (b. p. r. construction v. cit : [1991]192itr534(orissa) ) disposed of on june 28, 1991, wherein it has been decided that the claim made before the arbitrator ripened into a right for the first time when the award was made. what would be the quantum of expenses that would be allowed is a question of fact. the assessing officer and the appellate authorities including the tribunal have considered the question of the quantum of expenses against the receipts on the basis of the award. that being a factual adjudication, no question of law arises. therefore, we decline to answer the second question that has been referred to us.7. the reference applications are, accordingly, disposed of.s.k. mohanty, j.8. i agree.