DR. GOPAL DASS AGARWAL V. COMMISSIONER OF INCOME TAX

IAPL/138/2018

AI Insights

The case involves Dr. Gopal Dass Agarwal, the appellant, who filed appeals against the orders of the Income Tax Appellate Tribunal dated 18.6.2018, which rejected his applications for recall of the orders dated 23.10.2017. The appellant argued that the Tribunal had violated the principles of natural justice by not considering his adjournment applications due to the personal grounds of his counsel, leading to ex-parte decisions against him. The Tribunal initially rejected the recall applications, stating it had no power to review its orders. However, the High Court found that the Tribunal does possess inherent powers of procedural review and specific powers under Rule 25 of the Income Tax (Appellate Tribunal) Rules, 1963, to recall its orders if passed in violation of natural justice.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 770030 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 05-12-2018
• Assessment Year: misc
• Laws Referred To: Income Tax (Appellate Tribunal) Rules, 1963
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MANU GHILDYAL; PIYUSH AGRAWAL
• Assessee Lawyers: SHAMBHU CHOPRA
• Keywords: Ex-parte hearing; Income tax appeal; Procedural Review; Recall of order; Violation of natural justice
• Section: 25

Judgement Text

"A.F.R. Court No. - 29 Case :- INCOME TAX APPEAL No. - 138 of 2018 Appellant :- Dr. Gopal Dass Agarwal Respondent :- Commissioner Of Income Tax Counsel for Appellant :- Shambhu Chopra Counsel for Respondent :- S.S.C.,Manu Ghildyal,Piyush Agrawal With Case :- INCOME TAX APPEAL No. - 139 of 2018 Appellant :- Dr. Gopal Dass Agarwal Respondent :- Commissioner Of Income Tax Counsel for Appellant :- Shambhu Chopra Counsel for Respondent :- S.S.C.,Manu Ghildyal,Piyush Agrawal Hon'ble Pankaj Mithal, J. Hon'ble Pankaj Bhatia, J. Heard Sri Shambhu Chopra, learned counsel for the appellant and Sri Manu Ghildyal, learned counsel for the respondents. Both the aforesaid appeals arise out of a common dispute, therefore, are being decided together by this common order. The appellant has preferred these appeals against the orders of the tribunal dated 18.6.2018 by which the applications for recall of the order dated 23.10.2017 have been rejected. The facts of the case reveal that against the order of the Commissioner of Income Tax (Appeals), Meerut pertaining to the assessment years 2005-06 & 2011-12., the Revenue had preferred appeals before the Tribunal. The appeals were decided on 18.6.2018 against the assessee. The assessee moved applications for recall of the above orders on the ground that it had moved applications on 10.10.2017 for adjournment of the appeals on the personal ground of the counsel, but without considering the said applications, the appeals were heard and the judgment was delivered on 23.10.2017. Therefore, the orders were passed without proper opportunity of hearing to the assessee and are liable to be recalled. The Tribunal has rejected the above applications on the ground that the order of the Tribunal does not require any rectification and there is no power of review vested in the Tribunal. The moot question which raised for consideration is whether the Tribunal is divested of the power to recall an order passed by it in violation of the principles of natural justice, if so established. The power of rectification and the power of substantive review are two different things distinct from procedural review which encompasses the power to recall an order. The power of procedural review to recall an order is inherent in every authority which exercises quasi judicial jurisdiction. Therefore, even if there is no specific power of review vested in the Tribunal, it has inherent power to consider the application for recall of an order passed by it if it is established that it has been passed in violation of the principles of natural justice or by playing fraud upon it. This apart, Rule 25 of the Income Tax (Appellate Tribunal) Rules, 1963 provides for the hearing of the appeal ex- parte for default of the respondents. It lays down that in an appeal where the appellant appears and the respondents does not appear when the appeal is taken up for hearing, the Tribunal may dispose of the appeal on merits after hearing the appellants. It further provides that where the appeal has been disposed of in the above manner and the respondents appears afterwards and satisfies the Tribunal that there was sufficient cause for his non appearance, the Tribunal shall set aside the order and restore the appeal for hearing on merits. The aforesaid Rule 25 is reproduced herein below :- \"25. Hearing of appeal ex parte for default by the respondent.- Where, on the day fixed for hearing or any other day to which the hearing may be adjourned, the appellant appears and the respondent does not appear in person or through an authorised representative and the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the appellant : Provided that where an appeal has been disposed of as provided above and the respondent appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex-parte order and restore the appeal.\" In view of the above Rule, it is implicit that the Tribunal has statutory power to recall its order if it is satisfied that the respondent has failed to appear before it for sufficient cause, at the time of hearing and to restore the appeal. Thus, it cannot be said that the Tribunal has no authority of law to consider the application of the assessee for recall of an order by which the appeal was decided ex- parte. In view of the above, the Tribunal is not justified in rejecting the applications of the appellant-assessee on the ground that it has no power to review the order already passed by it. Accordingly, we answer the above question in favour of the appellant-assessee and holds that the Tribunal has inherent power of procedural review as has also been conferred upon it under Rule 25 of the Income Tax (Appellate Tribunal) Rules, 1963. The impugned orders dated 18.6.2018 for the assessment years 2005-06 and 2011-12 are hereby set aside and the matters are remanded to the Tribunal for reconsideration of the applications of the appellant- assessee (wrongly filed by mentioning Rule 234-A of the Income Tax Appellate Tribunal Rules, 1963 instead of Rule 25) for recall of the judgments and orders dated 23.10.2017. It is also pertinent to mention that the Tribunal in considering the above applications afresh would also consider, if any adjournment application as stated by the appellant-assessee was moved and was considered before pronouncing the final order. The appeals are accordingly allowed with no order as to costs. Order Date :- 5.12.2018 Hasnain "