Category: Appeals (Income Tax)

Just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. – Bombay High Court there fore concluded in Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) dtd 25-04-2016

1. As per Section 250(4), CITA is obliged  to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him

2. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support.

3. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty.

4.  Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A).

The Bombay High Court there fore concluded in Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) dtd 25-04-2016 that:

1. Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal .In fact the CIT(A) is obliged to dispose of the appeal on merits.

2. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do.

3. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee.

1.     As per Supreme Court in Kanwar Singh vs. Thakur Ji Maharaj , in ordinate delay in itself is sufficient  to set aside the judgment without going into the merits of the case.

2. Supreme Court in Bhagwan Das Fateh  Chand Baswani held that long delay in releasing the judgment gives rise to unnecessary speculations.  The Court added that :”the party whose appeal is ultimately dismissed may justifiable fear that the arguments raised at the Bar may not have been reflected upon or appreciated by the Court at the time of dictating the Judgment”. Hence the apex Court dismissed the Madras Court Judgments kept reserved for five years.
3. Supreme Court in Anil Rai vs. State of Bihar (2001) 7 SCC 348 laid down certain guidelines to be observed by High Court and Others
4. Apex Court in Suheli Leasing and Industry Ltd (2010) 36 PHT 267 held that after the arguments are concluded, an endevour should be made to pronounce the Judgment at earliest and in any case not beyond a period of three months. Keeping it pending for long time sends a wrong signal to the litigants and the society.
5. In Shiv Sagar Veg Restaurant 176 Taxman 260(Bom) order of ITAT was set aside because there was in ordinate delay of 4 months
6. Haryana Tax Tribunal in Punj Llods 48 PHT 89(HTT) taking a serious note of inordinate delay set aside the impugned order.

Comments

7. As per Rule 34(5) of ITAT Rules

 The pronouncement may be in any of the following manners :—

          (a)  The Bench may pronounce the order immediately upon the conclusion of the hearing.

          (b)  In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement.

          (c)  In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board.

Observations of ITAT Mumbai in Times Guaranty Ltd.(ITA 1681/M/2007) dtd 15-04-2015 on

Exception and Extraordinary Circumstances “of the case”

“…………..the inference that can be drawn that the relevant factors such as complexity of the matter, number of issues involved, lengthy arguments and discussions involved or the issue being of such importance that it requires more time and efforts, difference of opinion between the adjudicating members on some issue which require more discussion etc. can be safely said to be ‘exceptional and extraordinarily circumstances of the case.’ The factors/ circumstances such as one or both the concerned Member being on leave or his/their non availability for some reason for a particular period , his occupation in some other work of equal importance as may be entrusted by the Hon’ble President of the ITAT or due to the reason that the concerned Member/Members could not spare time because of hearing or in making decision in any other factually lengthy or involving complicated issue or of the nature which require a lot of time to get to the conclusion of the matter would also fall within the purview of the above stated phrase. It cannot be assumed that such exceptional and extraordinarily circumstances of the case would mean happening of any event which is never heard or seen or which is rarely seen to happen

………………………………………….

………………………………………….

Even, if the pronouncement of the order, for certain reasons, could not be done within the period of 90 days, there is a convention to seek the permission of the Hon’ble President for pronouncement of the same even after the period of 90 days. The above said conventions are being followed not under any statutory rules or regulations but because of the own devised procedure/convention of the Tribunal for the sake of quick disposal of the cases.

We may further point out that it is also the practice/convention that if the pronouncement of the matter is delayed for certain reasons for a considerable period, the matter is refixed for clarification so that the relevant points be refreshed in the memory and if so required matter can be heard afresh. This all depends upon the satisfaction of the Bench itself as to whether it is in a position to pronounce the order or that some clarifications are required or that a fresh hearing is required.

Further the word ‘ordinarily’ as mentioned in clause (c) of rule 34(5) is sufficient to explain that the period of further 30 days beyond the period of 60 days from the date of hearing, is not the end point and in special circumstances, order can be pronounced beyond the such further period of 30 days also. Reliance in this respect can be placed on the another decision of the Tribunal in the case of “Gift Holding (P.) Ltd. vs. Income-tax Officer” [2012] 18 taxmann.com 103 (Mum.),

“………..It is pertinent to note that in the case in hand, there are certain developments with respect to the long leave and transfer of one of the Member constitution the Bench who have heard the appeal. It is transpired from the record that one of the Members Shri D.K. Shrivastava, AM, seating in the Beach who heard the appeal of the assessee was transferred from Mumbai Benches to Ahmedabad Benches of this Tribunal. Therefore, it appears that due to transfer of one of the Members of the Bench who have heard the appeal, there exists some extra ordinary circumstances which lead to the delay in pronouncement of the order. In the absence of any tangible material, glaring facts and circumstances of the case to show that by the reason of delay in pronouncement of the order, the Bench has ignored or failed to consider material facts or legal point of argument of the assessee. Merely because, there is a delay due to some exceptional circumstances, would not render the decision of the Tribunal as illegal or void. Therefore, in our view when the assessee has not brought on record anything to establish prima facie that any material fact or contention was left without considering by the Tribunal while passing the impugned order. Accordingly, we do not agree with the contentions of the learned counsel for the assessee on this point, the same is rejected.

[Excerpt from Article Published in 54PHT(J) 1] and Comments added from Angle of ITAT Rules]

A Court of appeal interferes not when the judgment under attack is not right but only when it is shown to be wrong. (See Special Land Acquisition Officer, Bangalore v. T. Adinarayan Setty [1959 Supp 1 SCR 404 : AIR 1959 SC 429 : 1959 Cri LJ 526] ;Dattatraya Shankarbhat Ambalgi v. Collector of Sholapur [(1971) 3 SCC 43] and Dollar Company, Madras v.Collector of Madras [(1975) 2 SCC 730] .)