COMMISSIONER OF INCOME-TAX VS INCOME-TAX APPELLATE TRIBUNAI
1999 P T D 2645
[228 I T R 421]
[Allahabad High Court (India)]
Before M. C. Agrawal, J
COMMISSIONER OF INCOME-TAX and another
Versus
INCOME-TAX APPELLATE TRIBUNAI: and another
Civil Miscellaneous Writ Petition No.378 of 1987, decided on 15/11/1996.
(a) Income-tax---
----Appellate Tribunal---Power to recall its order and direct fresh hearing -- Assessee-company located at Kanpur and Tribunal located at Allahabad--- Application for adjournment sent to Tribunal as assessee unable to instruct its counsel fully---Application rejected and appeal heard in absence of assessee and allowed in part---Application filed for recalling order of Tribunal on ground that assessee-company's chairman involved in number of litigations and unable to instruct counsel fully ---Assessee under bona fide belief that hearing would be adjourned ---Assessee belonged to a distant place and application for adjournment filed before date of hearing---Same should have been disposed of before date of hearing so that assessee could be informed about fate of adjournment application---In case of rejection of application assessee may arrange for its representation at the hearing---Same not done-- Tribunal's order recalling its ex parte order valid---Indian Income Tax Act, 1961,5.254.
(b) Income-tax---
----Writ---Jurisdiction of High Court---Could not be invoked for enforcing technicalities of law and for setting aside an order which is otherwise just-- , Constitution of India, Art.226.
The assessee-company which was the second respondent in the writ petition was located at Kanpur. It sent an application for adjournment of its appeal to the Appellate Tribunal located at Allahabad on the ground that it had not been able to instruct its counsel fully and the appeal be adjourned to some other date. The application was received in the office of the Tribunal on August 18, 1984, and the Tribunal directed the same to be put up before the Concerned Bench on the date of hearing. The Tribunal rejected the application and heard the appeal in the absence of the assessee and the same was allowed in part by order, dated August 22, 1984. Subsequently, the assessee filed an application praying that the ex parte order, dated August 22, 1984, be recalled on the ground that the assessee-company's chairman was involved in a number of litigations and he could not instruct his counsel fully about the appeal, that having sent the application, he was under the bona fide belief that the hearing would be adjourned and that he would receive intimation of the next date of hearing and that the assessee had no local counsel who could attend the Tribunal to find out the fate of the adjournment application. The Tribunal accepted the assessee's plea and recalled its ex parte order by its order, dated February 25, 1987. This order was challenged by the Commissioner of Income-tax under Article 226 of the Constitution and he contended that the Tribunal having decided the appeal on the merits, though in the absence of the assessee, had no power ,to recall its order and direct a fresh hearing of the appeal and that the only remedy of the assessee was to seek a reference under section 256 of the Income Tax Act, 1961:
Held, dismissing the writ petition, (i) that in a case like this, when the party belonged to a distant place and the application for adjournment had been moved some days before, it was proper that the same was disposed of before the date of hearing so that the party could be informed or it could gather information about the fate of the adjournment application and in case of its rejection might arrange for its representation at the hearing. Admittedly, this was not done and, therefore, the Tribunal's order recalling the ex parte order was just.
(ii) That the petition in the instant case was a petition under Article 226 of the Constitution which conferred extraordinary jurisdiction on the High Court to issue appropriate writs. This extraordinary jurisdiction could not be invoked for enforcing technicalities of law and for setting aside an order that was otherwise just and did not adversely affect the petitioner.
Bhagwan Radha Kishen v. CIT (1952) 22 ITR 104 (All.); CIT v. ITAT (1996) 227 ITR 443 (All.); Ramji Das v. Mohan Singh (1978) All RC 496 and Sangram Singh v. Election Tribunal AIR 1955 SC 425 ref.
Bharat Ji Agarwal for Petitioners
S.P. Mehrotra for Respondents.
JUDGMENT
By this petition under Article 226 of the Constitution of India, the petitioner-Commissioner of Income-tax, Kanpur, challenges an order, dated February 25, 1987, passed by the Income-tax Appellate Tribunal, Allahabad, by which it recalled its order, dated August 22, 1984, passed in Appeal No.2127 of 1982.
I have heard Sri Bharat Ji Agarwal, learned senior standing counsel for the petitioner, and Sri S.P. Mehrotra, learned counsel for the assessee respondent.
The respondent, Manna Lal & Sons (P.) Limited, was the appellant in the aforesaid appeal that was listed on August 21, 1984, before the Tribunal, for the first time, for hearing. The assessee-respondent, which is located at Kanpur, sent an application for adjournment stating that it has not been able to instruct its counsel fully and the appeal be adjourned to some other date. The application was received in the office of the Tribunal on August 18, 1984, and the senior member of the Bench directed the same to be put up before the concerned Bench on the date of hearing. The Bench rejected the application and heard the appeal in the absence of the appellant and the same was partly allowed by order, dated August 22, 1984. Subsequently, the assessee moved an application praying that the order, dated August 22, 1984, be recalled. It was stated in the application that the company's chairman was involved in a number of litigations and he could not instruct counsel fully about the appeal and having sent the application, he was under the belief that the hearing would be adjourned and that he would receive intimation of the next date of hearing. The appellant had no local counsel who could attend the Tribunal to find out the fate of the adjournment application. The Tribunal stated in paragraph 3 of its order as under:
"3. It is submitted by the assessee's learned counsel that it is indeed a hardship if the assessee is not getting an opportunity of being heard by the Appellate Tribunal particularly when as stated in the affidavit, the said chairman came to the Tribunal's office from Kanpur can August 18, 1984, when the Assistant Registrar concerned was out of station and, therefore, the petition for adjournment was handed over to the Office Superintendent, Shri Khatri, who marked the petition to Mr. Bhagwan Das, dealing clerk, who in his turn is stated to have assured the assessee that due to heavy listing on August 21, 1984, the case would be adjourned. It is also stated that on August 20, 1984, the assessee had a telephonic talk with the then Assistant Registrar, who assured that the case fixed for August 21, 1984, would be adjourned. It is,. therefore, submitted that the assessee was of the bona fide belief that .the case would be adjourned on August 21, 1984. In the circumstances, it is urged that the assessee was prevented by sufficient cause from recording his presence of August 21, 1984. It is, therefore, prayed that the order of the Appellate Tribunal may be recalled, so that the assessee may be given an opportunity of being heard afresh."
Then, it allowed the application by observing as under:
"6. We hake gone through the entire facts of the case for our consideration. It is seen that the appeal by the assessee was fixed for the first time and the assessee had applied for adjournment much earlier on the ground that the assessee could not brief the counsel finally. The assessee is at Kanpur and claimed to have no means to know that application for adjournment had been rejected and that it had a bona fide belief that case would be adjourned as it had been fixed for the first time only. The grievance of the assessee is that it has been deprived of reasonable opportunity of being heard to place its materials and arguments, etc., before the Appellate Tribunal. Thus, considering the background and the entirety of the facts and circumstances of the case, we are of the opinion that to meet the ends of natural justice, the assessee should be given a reasonable opportunity of being heard. We are of the view that this is a fit case under the peculiar circumstances of the case that we should recall the order for fresh hearing which we hereby do. The Assistant Registrar will fix the case for fresh hearing in due course."
The sole contention raised on behalf of the petitioner-Commissioner of Income-tax is that the Tribunal having decided the appeal on the merits, though in the absence of the appellant, had no power under the law to recall its order and direct a fresh hearing of the appeal. Reliance is placed on the provisions of the Income-tax Act to show that the Tribunal has not been given any power, as contained in Order 9 of the Code of Civil Procedure and the only remedy of the assessee was to seek a reference under section 256 of the income-tax Act. Reliance is also placed on a recent judgment of this Court in CIT v. ITAT (1996) 227 ITR 443; UPTC 1081 in which it was held that the Income-tax Appellate Tribunal had no power to recall an order passed under section 256(1).of the Income-tax Act rejecting an application requiring the Tribunal to make a reference to the High Court. I have gone through this judgment and I am of the view that the same is restricted to the effect of the rejection of the application under section 256(1) and does not cover a situation like the present one. A person whose application under section 256(1) has been rejected by the Tribunal has another opportunity of making an application to the High Court itself under section 256(2) of the Act. .
There is a direct judgment of this Court on the point. In Bhagwan Radha Kishen v. CIT (1952) 22 ITR 104, a Division Bench of this Court held that though there is no such rule, it must be held that there is inherent jurisdiction in the Tribunal to set aside an order of dismissal for default or an order passed on an appeal heard ex parte when it is satisfied that there was, in fact, no service of notice or that there was sufficient cause which prevented the appellant or the respondent from appearing on the date fixed.
In the present case, the assessee-company wanted adjournment of the appeal. The Tribunal's office is located at Allahabad while the assessee was at Kanpur. The assessee had filed an affidavit stating that its chairman had personally come to Allahabad and handed over the application to the office superintendent, as the Assistant Registrar was out of station and he was assured that there was heavy listing and there would be no difficulty in adjournment of the case. It was also stated in the affidavit that enquiries were being made on August 20, 1984, and the Assistant Registrar had assured that the case would be adjourned. It was for this reason that the assessee had a bona fide belief that the case would be adjourned. It is for this reason that the Tribunal thoughts that the hearing of the appeal on August 21, 1984, was a mistake.
In a case like this, when the party belongs to a distant place and the application for adjournment had been moved some days before, it was proper that the same is disposed of before the date of hearing so that the party could be informed or it could gather information about the fate of the adjournment application and in case of its rejection may arrange for its representation at the hearing. Admittedly, this was not done and, therefore, the Tribunal's order recalling the ex parte order is absolutely just.
In Sangram Singh v. Election Tribunal, AIR 1955 SC 425, the Supreme Court observed as under (page 429):
"(16) Now a code of procedure must be regarded as such. It is ' procedure', something designed to facilitate justice and further its ends: not a penal enactment for punishment arid penalties; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should, therefore, be guarded against (provided always that justice is done to 'both' sides) lest the very means designed for the furtherance of justice be used to frustrate it.
(17) Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives are property should not continue in their absence and that they should not be precluded from participating in them.
Then, in Ranji Das v. Mohan Singh (1978) Allahabad Rent Cases 496, the Supreme Court, observed that as far as possible, the Court's discretion should be exercised in favour of hearing and not to shut out hearing. The present is a petition under Article 226 of the Constitution of India, which confers extraordinary jurisdiction on the Court to issue appropriate writs. This extraordinary jurisdiction cannot be invoked for enforcing technicalities of law and for setting aside orders that are otherwise just and do not adversely affect the petitioner.
In view of the above, I find no force in the present writ petition and the same is hereby dismissed with costs.
M.B.A./3012/FCPetition dismissed.