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2005 Supreme(Del) 584
High Court Of Delhi
COMMISSIONER OF INCOME TAX - Appellant
Versus
SUDHIR CHOUDHRIE - Respondent
Decided On : 05/18/2005
The main legal point established in the judgment is that the Income Tax Appellate Tribunal is obligated to pronounce its judgments and orders in open hearing and upon enlisting them for a given date, in addition to communicating the orders as contemplated under Section 254(iii) of the Act and Rule 35 of the Rules.
Headnote:
Pronouncement of Orders - Income Tax Appellate Tribunal - Section 254(i), Section 254(iii), Rule 35 of the Income Tax Act, 1961 - The court directed the Income Tax Appellate Tribunal to pronounce its judgments and orders in open hearing and upon enlisting them for a given date. This practice was to be adopted in addition to the obligation to communicate the orders as contemplated under Section 254(iii) of the Act and Rule 35 of the Rules. The Tribunal was also directed to pay costs of Rs. 5000 to the Delhi Legal Services Authority within one week from the date of the judgment.
Fact of the Case:
The respondent-assessee objected that subsequent appeals would be adversely affected as the Income Tax Appellate Tribunal had passed an order in their favor for the assessment year 1988-89, which had not been challenged by the Department. The court was concerned about the delay in serving orders by the Tribunal to the Department, leading to a controversy regarding the obligation of the Tribunal to pronounce orders and timely communicate copies to the parties.
Finding of the Court:
The court found that the Income Tax Appellate Tribunal was obligated to pronounce its judgments and orders in open hearing and upon enlisting them for a given date, in addition to communicating the orders as contemplated under Section 254(iii) of the Act and Rule 35 of the Rules. The court also directed the Tribunal to pay costs of Rs. 5000 to the Delhi Legal Services Authority.
Issues: The issues included whether the Tribunal was obligated to pronounce orders after listing them for pronouncement, whether such pronouncement would be prejudicial to the parties or affect the administration of justice, and whether the Tribunal's stand on not pronouncing orders was contrary to the provisions of the Income Tax Act.
Ratio Decidendi: The court held that the Income Tax Appellate Tribunal was obligated to pronounce its orders in open hearing and upon enlisting them for a given date, in addition to communicating the orders as contemplated under Section 254(iii) of the Act and Rule 35 of the Rules. The court emphasized that the practice of pronouncing orders would further the cause of justice and serve larger public interest.
Final Decision: The court directed the Income Tax Appellate Tribunal to pronounce its judgments and orders in open hearing and upon enlisting them for a given date, in addition to the obligation to communicate the orders as contemplated under Section 254(iii) of the Act and Rule 35 of the Rules. The Tribunal was also directed to pay costs of Rs. 5000 to the Delhi Legal Services Authority within one week from the date of the judgment.
( 1 ) NOTICE to show cause why the appeals be not admitted returnable on 10th September, 2002, was issued by a Division Bench of this court in all the above appeals vide order dated 20th May, 2002. In response to it the respondent-assessee appeared and took an objection in its submission that the Income tax Appellate Tribunal had passed an order in favour of the assessee for the assessment year 1988-89 which has not been challenged" by the Department and as such all subsequent appeals would have to be dismissed or adversely affected. The pendency of this matter became a matter of concern for the court as it was stated at the Bar in different cases including the above appeals, that orders passed by the Income Tax Appellate Tribunal are not served upon the Department for years together, while on the other hand the contention of the Counsel appearing for the income Tax Appellate tribunal was that the orders are duly communicated or served upon the authorities but sometimes they decline to accept the same and the delay is not attributable to the Registrar of the Income tax Appellate Tribunal. Faced with these circumstances, the Court had passed the following order on 11th January, 2005:-
"the basic contention raised on behalf of the Respondent is that for the financial year 1988-89 the Tribunal had passed the order, which order has not been challenged by the Department and as such all subsequent appeals would be adversely affected in that behalf. Be that as it may, learned Counsel for the Petitioner has placed on record a copy of the order dated 10th January, 2003 and 3rd March, 2004. We may also refer to the order of the Court dated 16th January, 2003 passed in this case. We require the Department of Income Tax s concerned office to file an affidavit in regard to the exact facts and the stand of the Department arising from the above said three documents. We also direct the Registrar, Income- tax Appellate Tribunal to submit the report to this Court before the next date of hearing as to whether the letter dated 3rd March, 2004 was received by them or not, if received, what action has been taken. Let the compliance of this order be done within one week from today. The registry shall inform the Registrar, income-tax Appellate Tribunal without process fee of this order. List this case on 21st February, 2005. All these cases will be shown together on the next date of hearing. "
( 2 ) THEREAFTER, on 24th February, 2005 again the following order was made:-
"the Registrar of the Income Tax appellate Tribunal is present in Court. Affidavit file in Court today is taken on record. Learned Counsel appearing for the parties pray for time to file an affidavit stating as to what procedure shall be followed by the Department of income Tax and the Appellate Tribunal to ensure that there is no delay in supply of copy of the orders passed by the Tribunal. To come upon 10th March, 2005. "
( 3 ) AN affidavit on behalf of the Registrar of the Income Tax Appellate Tribunal was filed which was taken on record. However, the said affidavit did not deal with the pronouncement of final orders by the Tribunal after listing them for pronouncement. Learned counsel appearing for the Tribunal contended that keeping in view the provisions of the income Tax Act, 1961 (hereinafter referred to as the Act ), it is not obligatory upon the appellate Tribunal to pronounce final orders upon listing. In fact, the relevant provisions of law require the authorities to communicate the order to the parties and the Tribunal has been complying with the directive contained in Rule 35 of the Appellate Tribunal Rules, 1963 (hereinafter referred to as the Rules ). In other words, there is no statutory obligation upon the Tribunal to pronounce the judgments during working hours and after showing them in the cause list of the Tribunal. The Tribunal has not been following such a practice and does not wish to start the same being not a mandate of law. Arguments at so
