Appeal to the High Court: Power to condone delay in filing: Retrospective amendment does not affect completed matters: J. B. Roy Vs. Dy. CIT (All):

By an order dated 11/12/2009, the appeal filed by the assessee u/s. 260A was dismissed by the Allahabad High Court, on the ground that the appeal was filed beyond the statutory period of limitation and there is no power to condone the delay. Section 260A(2A) was inserted by the Finance Act, 2010 w.e.f. 01/10/1998 (retrospectively) granting power to the High Court to condone the delay in filing the appeal. In view of the said retrospective amendment, the assessee filed review petition requesting to restore the appeal and condone the delay.

The Allahabad High Court dismissed the review petition and held as under:

“i) Though section 260A(2A) has been inserted retrospectively w.e.f. 01/10/1998 by the Finance Act, 2010, the fact remains that the cases already settled before the said amendment cannot be re-opened as per the ratio laid down in Babu Ram Vs. C. C. Jacob AIR (1999) SC 1845, where it was observed that the prospective declaration of law is a devise innovated by the Apex Court, to avoid reopening of the settled issues and to prevent multiplicity of proceedings. It is also a devise adopted to avoid uncertainty and avoidable litigation.

ii) By the very object of the prospective declaration of law, it is deemed that all actions taken contrary to the declaration prior to its date of declaration are validated. This is done in the larger public interest. In matters where decisions opposed to the said principle have been taken prior to such declaration of law, cannot be interfered with on the basis of such declaration of law.

iii) The amendment is applicable to future cases to avoid uncertainty as per the ratio laid down in M. A. Murthy Vs. State of Karnataka 264 ITR 1 (SC), where it was observed that prospective over-ruling is a part of the principles of constitutional cannon of interpretation and can be resorted to by the court, while superseding the law declared by it earlier. It is not possible to anticipate the decision of the Highest Court or an amendment and pass a correct order in anticipation as per the ratio laid down in CIT vs. Schlumberger Sea Company 264 ITR 331 (Cal). Therefore, the amendment introduced in section 260A(2A) has the effect only on pending and future cases.

iv) On the date when the appeal was dismissed on the ground of limitation, there was no discretion with the Court to condone the delay. A discretion has come to the Court by virtue of the amendment by inserting section 260A(2A). The appeal was rightly dismissed as per the then law and the subsequent amendment is not applicable as the matter has already attained finality.”