Commissioner of Income-tax, Delhi-VIII, New Delhi, has presented th e s e two applications under sec. 256(1) before Tribunal, asking for reference of following questions, said to be questions of law:- "1. Whether, on facts and in circumstances of case, Tribunal was correct in law in confirming order of AAC holding that valid Trust stood created and that direct assessment could be made in respect of Trust itself in status of AOP? 2. Whether, on facts and in circumstances of case, finding o f Tribunal is not perverse as it has been reached without taking into consideration material alterations having been made in original trust- deed? 3. Whether, Tribunal being final fact finding authority should not have looked into genuineness of trust and trust deed by examining material alterations made In original trust deed as confirmed by Settlor himself? 4. Whether, on facts and in circumstances of case, Tribunal had not misdirected itself in holding that ITO should not have made protective assessments on assessee-trust in status of AOP?" 2. assessment years involved are 1975-76 and 1979-80. appeals for these years were disposed of by Tribunal by its consolidated order dated 29-11-1985, Commissioner's applications under sec. 256(1) for both above years show that aforesaid order of Tribunal was served on Commissioner on 9-12-1985. Applications under sec. 256(1) were, however, filed only on 19-6-86. There was thus delay of 132 days. 3. defect-memo was issued to Commissioner by Tribunal pointing out that Commissioner's applications were time-barred by 132 days. This memo was issued to Commissioner on 25-7-86. Commissioner has explained delay as due to following reasons:- "(1) That Tribunal was pleased to pass order in regard to A. Ys. 1975-76 and 1979-80 on 29-11-85 which was sent to petitioner's office on 9- 12-1985. In regard to A.Y. 1980-81, orders were made on 9-1-1986 and were sent to petitioner's office on 24-1-1986. (2) That there was mix up of files in office of petitioner, i.e. Judicial Branch. (3) That tax effect was to be determined for determining loss of Revenue which was reported late to petitioner. However, petitioner was of view that important question of law arises and petition should be filed before Hon'ble Tribunal u/s. 256(1) of Act of 1961. (4) That consequent to petitioner's directions in determining tax effect it was found that files from Tribunal had not reached office of petitioner and only orders had been conveyed and without files tax effect could not be calculated. (5) That records were summoned from office of Tribunal and because of late receipt of records, petition u/s. 256(1) is being filed on 18-6-1986. (6) That as important question of law arises from order of Tribunal, petitioner craves indulgence of Hon'ble ITAT in condoning delay." 4. Shri N.B. Singh, Departmental Representative, explained before us one o r two aspects which were not clear to us on plain reading of above explanation of Commissioner. For example, that for assessment year 1980-81 also, there was appeal before Tribunal, that some other Bench of Tribunal disposed of that appeal on 9-1-1980; and that it was this order that was served on Commissioner on 24-1-1986. Another point which he clarified was regarding what Commissioner meant In his explanation In item 4 of para 3 supra. assessment records in this case which had been sent to office of Departmental Representative in connection with appeals for assessment years noted above, were not sent back to office of Commissioner in time and tax effect could not be calculated in absence of those assessment records. It was submitted by Departmental Representative that as questions of law arose in these applications, delay should be condoned as due to valid reasons. 5. Shri R. Ganesan, authorised representative of assessee, opposed t h e above submissions. He referred to sec. 256(1) and proviso thereto. According to Shri Ganesan, Tribunal has power to condone delay in presentation of application under sec. 256(1) if It is satisfied that applicant w s prevented by sufficient cause from presenting application within period specified i.e. within 60 days of date of service of impugned order o f Tribunal. If so satisfied, Tribunal may allow application to be presented within further period, not exceeding 30 days. Shri Ganesan points out that it was common ground that order of Tribunal was served on Commissioner on 9-12-1965. period of 60 days specified in sec. 256(1) and additional period of 30 days stipulated in proviso to sec. 256(1) add up to 90 days. Commissioner's application could have been saved from limitation, if they had been filed at least by 9-3-1986 i.e. within 90 days, assuming that Tribunal came to be satisfied that Commissioner was prevented by sufficient cause from presenting applications within 60 days of 9-12-1985. Tribunal, however, has no power to condone delay of 132 days and admit present applications for consideration on merits. Shri Ganesan, therefore, submitted that applications have to be rejected in limine. 6. We have considered position, obviously, in this case, delay is much more than 30 days. proviso to sec. 256(1) empowers Tribunal to condone delays in presentation of applications under sec. 256(1) up to 60 days but not beyond. Therefore, we are not competent to condone delay in t h e instant case. applications, as rightly contended by assessee's authorised representative, have to be dismissed in limine on ground of limitation. 7. Reference Applications are rejected. Per Shri S.S. Mehra, Judicial Member - I have very carefully gone through order prepared by learned Accountant Member, Dr. S. Narayanan but regret my inability to concur with conclusion arrived at therein. facts and rival submissions have, in details, been accorded by my learned brother. office recorded that both reference applications were filed late by 132 days. T h e applicant, Commissioner of Income-tax, New Delhi filed petition for condonation of delay explaining that orders got mixed up in his office and record from office of learned departmental representative was not received in time and thus tax effect could not be ascertained and decision could not be taken earlier about filing of reference applications. It was, however, considered by applicant that important question of law since arose from Tribunal's consolidated order, reference applications were filed through late by 132 days. request was made by applicant through petition that delay was beyond control of applicant and that applications be entertained by condoning delay. 2. My learned brother rejected reference applications in limine on ground of limitation, of course, without going into adequacy of reasons for condonation of delay. According to my learned brother as was discovered during discussion, it was not proper to look to adequacy of reasons for delay as Tribunal under section 256(1) of Income-tax Act, 1961 had power only to condone delay up to 30 days beyond initial 60 days provided in section 256(1) of Act. According to my learned brother reference applications should have been filed within 90 days of receipt of Tribunal's order or within further 30 days from expiry of initial 60 days if Tribunal was satisfied that assessee was prevented by sufficient cause from filing reference applications within initial stipulated period of 60 days. Thus my learned brother has proposed dismissal of reference applications. 3. matter was discussed with my learned brother and request was made that finding should be recorded about adequacy or otherwise of reasons mentioned by applicant for condonation of delay. I, however, could not pursue my learned brother to do so. As according to him since Tribunal had no power to extend delay of more than 30 days-in this case delay already being of 132 days-the going into reasons for delay was uncalled for and unjudicious. 4. Here unfortunately difference arose. I have carefully gone through t h e reasons mentioned by applicant and am convinced that taking into consideration movement of record in Government offices, some delay is bound to take place. Moreover in Government decisions are taken at various levels. Therefore it takes time to take final stand as to whether reference was required to be filed or not. delay was caused on account of mixing up of files and time taken in taking decision. In my considered view reasons shown by applicant are adequate enough to infer, that applicant was prevented by sufficient cause from filing reference applications in time. 5. After having come to said conclusion next question remains as to whether Tribunal has power to condone delay in filing applications. Proviso to sub-section (1) of sec. 256 contains 'that Appellate Tribunal may, if it is satisfied that applicant was prevented by sufficient cause from presenting application within period hereinbefore specified, allowed to be presented within further period not exceeding 30 days'. In case before us reference applications are late by 132 days. I am satisfied that applicant was prevented by sufficient cause from filing reference applications within initial period of 60 days and within another 132 days. power of Tribunal is that after being satisfied about sufficiency of cause, it can extend further period not exceeding 30 days. According to plain reading of this section further period of 30 days should be counted not from expiry of initial 60 days but from last date up to which Tribunal feels that assessee had reasonable cause for not filing reference application. Since I am satisfied that assessee had reasonable cause up to that period i.e. initial 60 days and another 132 days Tribunal is competent to allow further period not exceeding 30 days from last day sufficient cause ceases to be available to assessee for any further delay. 6. In light of preceding discussion delay in filing reference applications is condoned and matter hereinafter should proceed on merit for ascertaining as to whether questions raised are referable questions of law and arise from Tribunal's order and as to whether references are indeed required to be made. required to be made. ORDER UNDER SECTION 255(4) OF INCOME-TAX ACT, 1961 In above matters difference of opinion developed. matters be, therefore, placed before Hon'ble President of Income-tax Appellate Tribunal for proceeding in matter in accordance with sub-section (4) of section 255 of Act. difference of opinion is as follows:- "Whether, on facts and in circumstances of case, ITAT have power under section 256(1) of Act, to condone delay in filing reference applications?" THIRD MEMBER ORDER Per Shri Ch. G. Krishnamurthy, President - Starting from stage at which it came to me as Third Member to express my opinion on difference of opinion that arose between learned Members, who heard these reference applications originally, short point of difference of opinion to express it in words of Members, who framed it, is: "Whether, on facts and in circumstances of case, ITAT have power under section 256(1) of Act, to condone delay in filing reference applications?" 2. Stated thus, no one can deny power of Tribunal to condone delay in filing of reference applications for very simple reason that that power was specifically granted by Legislature to Income-tax Appellate Tribunal in terms of section 256(1) of Income-tax Act, 1961. There cannot, therefore, be any doubt that Tribunal has got power to condone delay provided requirements of section, which conferred this power on Tribunal, are satisfied. Now let us notice concerned section: "256. (1) assessee or Commissioner may, within sixty days of date upon which he is served with notice of order under section 254, by application in prescribed form, accompanied where application is by assessee by fee of two hundred rupees require Appellate Tribunal to refer to High Court any question of law arising out of such order and, subject to other provisions contained in this section, Appellate Tribunal shall, within one hundred and twenty days of receipt of such application, draw up statement of case and refer it to High Court: Provided that Appellate Tribunal may, if it is satisfied that applicant was prevented by sufficient cause from presenting application within period hereinbefore specified, allow it to be presented within further period not exceeding thirty days." plain reading of section would indicate that assessee or Commissioner may within 60 days of date upon which he is served with notice of order under section 254, require Appellate Tribunal to refer to High Court any question of law arising out of order of Tribunal. Appellate Tribunal may, however, if it is satisfied that applicant was prevented by sufficient cause from presenting application within period hereinbefore specified allow it to be presented within further period not exceeding 30 days. It is proviso that actually confers power on Tribunal to allow applicant to present application beyond period of 60 days mentioned in subsection (1) of section 256 provided that there is sufficient cause preventing applicant from presenting application within period of 60 days but power of condonation is not unlimited power. It is limited power, i.e. period that Tribunal can permit applicant to present application is period not exceeding 30 days. Within this period of 30 days, Tribunal can condone delay. But if period exceeds 30 days, Tribunal cannot condone delay even if it is satisfied that applicant was prevented by sufficient cause from presenting application i.e. to say maximum period within which reference application can be filed by applicant is 60 days referred to in subsection (1) of section 256 and further period of 30 days referred to in proviso aggregating to total period of 90 days. Any application presented outside 90 days, cannot be entertained by Tribunal, whatever may be reason. This, in my opinion, is correct understanding of provisions of section 256(1). Judged in light of this understanding my answer to question posed to me for my opinion can only be that Income-tax Appellate Tribunal have power under section 256(1) of Income-tax Act, 1961 to condone delay in filing reference Income-tax Act, 1961 to condone delay in filing reference applications. But this difference of opinion between Members does not refer to period during which power of Tribunal of condonation of delay could be exercised by Tribunal and for period of condonation over which difference arose one has to go to facts of case. 3. Commissioner of Income-tax, Delhi VIII, New Delhi presented two reference applications u/s 256(1) raising four questions on 19-6-1986. order of Tribunal that gave rise to these questions was disposed of by Tribunal on 29-11-1985. This order was served on Commissioner of Income-tax on 9- 12-1985. There was delay of 132 days in presenting reference applications by Commissioner. question arose before Tribunal whether such delay could be condoned by Tribunal. defect memo was issued to Commissioner by office of Income-tax Appellate Tribunal requiring Commissioner to explain as to why reference applications should not be dismissed as time barred by 132 days. This memo was issued to Commissioner on 25-7-1986. In reply to this, Commissioner admitting correctness of dates and also delay in presentation of reference applications, submitted that there was mix up of files in his office particularly Judicial Branch, that tax effect was to be determined for ascertaining loss of revenue, that files to determine loss of revenue could not be received from his office of Income-tax Appellate Tribunal, namely, Departmental Representative's office, within time, although orders of Tribunal were served on him much earlier and by time records were summoned from office of Departmental Representative, some delay had taken place and it was on account of that delay, which was beyond his control, reference applications could not be presented within time. He submitted that since order of Tribunal gave rise to important question of law, delay must be condoned and reference applications be admitted. While Departmental Representative before Tribunal argued that in circumstances stated above, delay should be condoned, counsel for assessee submitted that under section 256(1) of Income-tax Act, 1961, power of Tribunal to condone delay was limited to 30 days and since delay in this case was more than 30 days, Tribunal could not condone delay even if it is satisfied about correctness of sufficiency of cause. submission was that Tribunal has no power to condone delay of 132 days. learned Accountant Member held that provisions of section 256(1) empowered Tribunal to condone delay only up to 30 days but not beyond and since delay was beyond 30 days, Tribunal was not competent to condone delay. These reference applications were therefore dismissed by him in limine on ground of limitation. He did not, however, discuss merits. learned Judicial Member, however, took different view. He first discussed merits and was satisfied that there was sufficient cause for delay of 132 days. He then observed that power of Tribunal to condone delay of 30 days starts not from expiry of initial 60 days but from last date up to which Tribunal feels that Commissioner has reasonable cause for not presenting reference applications. According to him, therefore, period of 30 day must be counted from end of 132 days and since applications filed were within 30 days after end of 132 days, reference applications were in time and therefore should be entertained. Thus, difference of opinion arose between learned Members and same was referred to Third Member for opinion in manner in which It was couched above. question did not refer to number of days but only to power of Tribunal to condone delay. 4. I have already expressed my view that Tribunal did have power to condone delay but that power is hedged in by limitation of 30 days. learned Judicial Member now feels that further period of 30 days should commence from date till reasonable cause for delay existed. Here I fail to appreciate logic and therefore I am unable to walk along with him. Normally period of delay has to be entirely explained. If entire period of delay is to be explained as due to existence of reasonable cause, there is no question of further delay thereafter. I am unable to conceive of situation whereafter entire delay is explained due to reasonable cause, further delay takes place unless it happens that in period where there is delay, there is reasonable cause up to some period and no reasonable cause for balance period. In either of situations law permits Tribunal to allow further period of 30 days only in addition to earlier period of 60 days. If we read proviso to section 256(1) closely, important expression used therein, which will limit power of Tribunal to condone delay are 'within period hereinbefore specified'. period specified hereinbefore was period of 60 days. There cannot be any dispute with regard to this simple clear proposition. What follows thereafter is power conferred upon Tribunal to allow further period not exceeding 30 days. So further period not exceeding 30 days has therefore to commence from expiry of 'period hereinbefore specified'. That means 60 days. There is therefore no occasion to infer or even suggestion to draw inspiration to say that further period of 30 days is to commence from end of period during which sufficient cause existed notwithstanding clear mandatory section that further period to be allowed is after period hereinbefore specified, namely, 60 days. What this section clearly means is that even for period of 30 days, there must be sufficient cause. Without there being sufficient cause, Tribunal cannot permit any condonation of delay in presentation of reference applications. Each day of delay, subject to maximum period of 30 days, has to be explained by applicant in order that Tribunal may condone delay. If interpretation placed by learned Judicial Member is to be reckoned as correct interpretation of proviso, then it would lead to situation where period of condonation of delay would become unspecified, uncertain, indeterminate and ambulatory. Suppose there is case where there is delay of one year for very genuine reason, then period of 30 days that Tribunal has been given to condone delay would reckon after lapse of one year. This is clearly unintended and leads to, as I mentioned earlier, uncertain results. After period of one year, for which there is reasonable cause, there would not be any further delay. One would explain entire delay from time order was received till time reference applications were presented as due to some reasonable cause. If after showing reasonable cause for entire period, I see no occasion to further delay to take place except in situation which I have mentioned above. Even then delay will become totally unspecific and imprecise. Legislature cannot be expected to give power to condone delay in such imprecise and indefinite terms. periods specified have got to be certain, ascertainable and never vague and ambulatory. very purpose of legislation would be defeated in this way. Further wording of power, as I have indicated earlier, does not lend support to any view other than view that power of Tribunal to condone delay is further period not exceeding 30 days from period of 60 days referred to in sub-section (1) of section 256. Since these words do not permit or bear any other interpretation and meaning of this expression is very clear to me, I feel that view taken by learned Judicial Member cannot be supported or justified. I therefore agree with view expressed by learned Accountant Member and hold that Tribunal's power to condone delay is limited to period of 30 days after initial period of 60 days were over and not beyond. 5. matter will now go back to regular Bench for disposal according to majority opinion. *** COMMISSIONER OF INCOME TAX v. D.M.K.S. MAINTENANCE TRUST