Ajanta Hospital & IVF Centre P Ltd., Lucknow V. ACIT -IV, Lucknow

ITA 368/LKW/2011

• Counselvise Citation: 36823714 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-06-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 23-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K B AJAJ
• Assessee Lawyers: D C AGRAWAL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI B. R. JAIN , ACCOUNTANT MEMBER ITA NO. 368/LKW/2011 ASSESSMENT YEAR: 2006 - 07 AJANTA HOSPITAL & IVF CENTRE PVT. LTD. LUCKNOW V. A CIT RANGE IV LUCKNOW PAN: AAECA6979R (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. D. C. AGRAWAL, ADVOCATE RESPONDENT BY: SHRI. P. K. BAJAJ, SR. D.R. DATE OF HEARING: 28.12.2011 O R D E R PER S UNIL KUMAR YADAV : THIS APPEAL WAS CALLED FOR HEA RING ON 28.12.2011 AND SHRI. D. C. AGRAWAL, ADVOCATE PUT HIS APPEARANCE FOR THE ASSESSEE. SHRI. D. C. AGRAWAL HAD BEEN ACCOUNTANT MEMBER OF THE INCOME TAX APPELLATE TRIBUNAL. BY VIRTUE OF AMENDMENT IN ITAT MEMBERS (RECRUITMENT AND CONDITIONS OF SERVICE) RULES, 1963, THE MEMBERS OF THE TRIBUNAL ARE DEBARRED FROM APPEARING BEFORE THE TRIBUNAL ON THEIR RETIREMENT AS A REPRESENTATIVE FOR EITHER OF THE PARTIES . RULE 13E IN THIS REGARD WAS INSERTED IN THE IN ITAT MEMBERS (RECRUITMENT AND CONDITIONS OF SERVICE) RULES, 1963 W.E.F. 3.6.2011. THEREAFTER A CONTROVERSY WAS RAISED WHETHER MEMBERS RETIRED AFTER THE SAID NOTIFICATION ARE ELIGIBLE TO REPRESENT THE ASSESSEE OR DEPARTMENT BEFORE THE TRIBUNAL. A SPECIAL BENCH OF THE : - 2 - : TRIBUNAL WAS CONSTITUTED TO ADJUDICATE THIS ISSUE. THE SPECIAL BENCH VIDE ORDER DATED 15.9.2009 IN THE CASE OF CONCEPT CREATIONS V. ACIT, RANGE, PANIPAT EXAMINED THIS ISSUE IN DETAIL AND HAS GIVEN A CATEGORICAL FINDING THAT THE MEMBERS WHO HAVE RETIRED AFTER THE AFORESAID NOTIFICATION ARE NOT ELIGIBLE TO APPEAR AND ARGUE BEFORE THE TRIBUNAL. THIS ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL WAS CONFRONTED TO SHRI. D. C. AGRAWAL. IN RESPONSE THERETO, SHRI. D. C. AGRAWAL HAS RAISED HIS DETAILED ARGUMENT AND ALSO FILED HIS BRIEF SYNOPSIS WHICH IS AS UNDER: - FROM : D. C. AGRAWAL ADVOCATE 411, SHRI RAM TOWER, ASHOK MARG, LUCKNOW. BEFORE HON'BLE INCOME TAX APPELLATE TRIBUNAL LUCKNOW 'B' BENCH LUCKNOW REG.: IN THE MATTER OF 'AJANTA HOSPITAL AND IVF CENTER PVT. LTD. V. ACIT ITA NO.368/LUC/ 11 . A. Y. 2 007 - 08 AS IT MAY PLEASE YOUR HONOUR: IT IS MOST RESPECTFULLY SUBMITTED THAT: 1. I HAVE FILED MY VAKALATNAMA IN THE ABOVE CASE TO REPRESENT IT IN AN INCOME - TAX MATTER PENDING ADJUDICATION BEFORE YOUR HONOUR; 2. I HAVE RE TIRED ON SUPERANNUATION FR OM IT AT AS ACCOUNTANT MEMBER ON 12 TH JULY 2011 FROM AHMEDABAD BENCHES OF ITAT. 3. A DECISION OF SPECIAL BENCH OF ITAT DELHI IN M/ S CONCEPT CREATIONS V. ADDL.CIT) [2009] 120 ITD 19 (DELHI) (SB) HAS RULED THAT THOSE MEMBERS OF THE ITAT WHO HAVE RETIRED A S SUCH AFTER 03 - 06 - 2009 CANNOT APPEAR BEFORE ITAT TO REPRESENT ANY PARTY. THIS : - 3 - : RULING HAS BEEN GIVEN BY THEM AFTER INTERPRETATION OF AN AMENDMENT IN THE ITAT (RECRUITMENT AND CONDITIONS OF SERVICES) RULES 1963 WHEREIN RULE 13E WAS INSERTED W.E.F FROM 03 - 06 - 2011. THE NOTIFICATION TO THAT EFFECT WAS PUBLISHED ON THAT DATE. THAT AMENDMENT HAS BEEN REFERRED TO IN THE ABOVE JUDGMENT OF THE SPECIAL BENCH. HOWEVER ABOVE JUDGMENT OF HON'BLE SPECIAL BENCH IS DISTINGUISHABLE ON SEVERAL POINT AND IS NOT APPLICABLE ON ME FOR SEVERAL REASONS. THEY ARE: A. ABOVE AMENDMENT IN SERVICE CONDITIONS WOULD BE APPLICABLE TO NEW APPOINTEES TO THE ITAT AS MEMBER. AT THE TIME WHEN I JOINED ITAT AS MEMBER I WAS NOT AWARE OF SUCH CONDITION. HAD I KNEW ABOUT IT I MIGHT OPTED NOT T O JOIN THE ITAT. B. THIS CREATES AN ARTIFICIAL DISCRIMINATION BETWEEN TWO CATEGORIES OF MEMBERS ONE WHO RETIRED BEFORE 03 - 06 - 2009 AND OTHERS WHO RETIRED AFTER THIS DATE EVEN THOUGH BOTH MAY HAVE BEEN APPOINTED TO THE TRIBUNAL ON THE SAME DATE. IT CA NNOT BE CALLED TO BE A REASONABLE CLASSIFICATION AND OFFENDS ARTICLE 14 OF THE CONSTITUTION OF INDIA. C. FURTHER AMENDMENT BY WAY OF SERVICE CONDITIONS COULD ONLY BE PROSPECTIVE AND NOT RETROSPECTIVE. IN ANY CASE NO OPPORTUNITY OF BEING HEARD WAS PROVID ED TO THOSE, INCLUDING ME, WHO WERE TO BE AFFECTED BY THIS AMENDMENT. HENCE INTENTION OF THE LEGISLATURE COULD NOT BE TO AFFECT THOSE WHO WERE ALREADY IN APPOINTMENT AS MEMBER PRIOR TO THIS DATE. HON. SUPREME COURT IN THE CASE OF UPCUEF LTD. VS. CANE COMMI SSIONER & RCCS & OTHERS RECORDED IN JT 5 (2008) 439 IN CIVIL APPEAL NO.2727 OF 2008 (ARISING OUT OF SLP(C) NO. 16536 OF 2005 DECIDED ON 10.04.2008, HAS HELD THAT BEFORE CHANGING THE SERVICE CONDITION OF THE WORKMAN A NOTICE HAS TO BE GIVEN TO THEM. : - 4 - : D. THIS AMENDMENT IN ITAT (RECRUITMENT AND CONDITIONS OF SERVICES) RULES 1963 BY WAY OF INSERTION OF RULE 13E IS ONLY A SUBORDINATE LEGISLATION AND IS NOT PASSED BY THE PARLIAMENT. IT THEREFORE CANN OT AMEND, ALTER OR MODIFY, OR MAKE THE STATUARY PROVISIONS OF INCOME TAX ACT OTIOSE BY IGNORING THE SECTION 288 THEREOF WHICH ALONE PRESCRIBES THE DISQUALIFICATION OF AN AUTHORIZED REPRESENTATIVE. NO SUCH DISQUALIFICATION OF THE NATURE RULED BY HON'BLE SPECIAL BENCH IS DESCRIBED THEREIN. THEREFORE AN INTERPRETATION OF THE AMENDED RULE IN THE ITAT (RECRUITMENT AND CONDITIONS OF SERVICES) RULES 1963 AS GIVEN BY HON'BLE SPECIAL BENCH CANNOT OVERRIDE SECTION 288 OF THE I.T. ACT BEING THE SPECIAL ACT PASSED BY THE PARLIAMENT. E. FURTHER HON'BLE SPECIAL BENCH HAS IGNORE D THE PROVISIONS OF ADVOCATE ACT 1961 WHICH ENABLES ANY ADVOCATE REGISTERED WITH BAR COUNSEL TO PRACTICE BEFORE A HIGH COURT AND WHO CAN APPEAR BEFORE ANY SUBORDINATE COURT ALSO. SECTION 30 THEREOF MADE EFFECTIVE FROM 15 TH JUNE 2011 CLEARLY ENABLES ANY ADV OCATE WHOSE NAME IS ENTERED IN THE STATE ROLL SHALL BE ENTITLED AS OF RIGHT TO PRACTICE THROUGHOUT THE TERRITORIES TO WHICH THIS ACT EXTENDS I.E. HE CAN APPEAR IN ALL COURTS INCLUDING THE SUPREME COURT, BEFORE ANY TRIBUNAL AND BEFORE ANY OTHER AUTHORITY OR PERSON BEFORE WHOM SUCH ADVOCATE IS ENTITLED TO APPEAR. ADVOCATE ACT IS ALSO A SUPERIOR ACT AS COMPARED TO THE AMENDMENT MADE IN THE ITAT (RECRUITMENT AND CONDITIONS OF SERVICES) RULES 1963. F. THE CONCEPT OF BIAS BEING THE APPARENT UNDERLYING REASON FOR INTRODUCING THIS AMENDMENT IN ITAT (RECRUITMENT AND CONDITIONS OF SERVICES) RULES 1963 HAS BEEN APPARENTLY DISTORTED BY THE HON'BLE SPECIAL BENCH. IF BIAS OF THE SITTING MEMBERS OF A BENCH OF ITAT IN : - 5 - : FAVOUR OF THE RETIRED MEMBER APPEARING BEFORE THAT BENCH WAS THE REASON TO PREVENT HIM FROM MAKING THE APPEARANCE BEFORE THE MEMBERS OF THE BENCH WITH WHOM HE MIGHT HAVE WORKED AS SENIOR THEN HOW SUCH BIAS WOULD NOT COME INTO PLAY IN CASE OF THOSE WHO RETIRED BEFORE 03 - 06 - 2009. HOW IT IS THAT THE MEMBERS O F THE BENCH WILL NOT BE BIASED IN FAVOUR OF THOSE APPEARING BEFORE THEM AND WHO HAD RETIRED BEFORE THAT DATE BUT WOULD BE BIASED ONLY FROM THOSE WHO RETIRED AFTER THAT DATE. SUCH INTERPRETATION OF THE AMENDMENT IN ITAT (RECRUITMENT AND CONDITIONS OF SERVIC ES) RULES 1963 IS NOT ACCEPTABLE. G. IN ANY CASE I WAS NOT THE PARTY MAKING APPEARANCE IN THAT CASE DECIDED BY HON'BLE SPECIAL BENCH. THAT JUDGMENT IS A JUDGMENT IN PERSONEM AND NOT A JUDGMENT IN REM. H. IN FACT IT AT IS NOT COMPETENT TO DECIDE AN ISSUE ARISING FROM THE AMENDMENT MADE IN ITAT (RECRUITMENT AND CONDITIONS OF SERVICES) RULES 1963. IT IS ONLY COMPETENT TO DECIDE AN ISSUE ARISING UNDER THE PROVISIONS OF I.T. ACT 1961. SINCE THIS ISSUE WAS NOT ARISING UNDER SECTION 288 OF THE I.T. ACT THE TRIBUNAL HAS STEPPED INTO A JURISDICTION WHICH DID NOT PERTAIN TO IT BY INTERPRETING AMENDMENT IN ITAT (RECRUITMENT AND CONDITIONS OF SERVICES) RULES 1963. IF A QUESTION ABOUT COMPETENCY OF AN AUTHORISED REPRESENTATIVE IS RAISED BEFORE ITAT THEN SUCH QUES TION SHOULD HAVE BEEN DECIDED WITHIN THE FOUR CORNERS OF THE PROVISIONS OF IT ACT PARTICULARLY SECTION 288 ONLY. IT CANNOT TRAVEL TO A DIFFERENT LEGISLATION ALIEN TO I.T. ACT UNLESS I.T. ACT WAS SILENT ON THE POINT RAISED BEFORE THE BENCH. HON. PUNJAB & HA RYANA HIGH COURT IN KULWANT SINGH VS. ITO (1970) 75 ITR 99 HAS HELD THAT THE AUTHORISED REPRESENTATIVE DERIVES HIS RIGHT FROM THE PROVISIONS OF SECTION 288 ONLY. : - 6 - : 6. IN VIEW OF ABOVE REASONS ABOVE JUDGMENT OF THE SPECIAL BENCH MAY NOT BE APPLIED ON ME AND I MAY BE PERMITTED TO MAKE APPEARANCE BEFORE ITAT. WITH UTMOST RESPECT YOURS SINCERELY SD/ - (D.C.AGRAWAL) ADVOCATE ENRLL. NO. 1221/2001 (DELHI BAR COUNSEL) DATED: 28 TH DECEMBER 2011 2 . THOUGH THERE MAY BE SOME FORCE IN THE ARGUMENTS OF SHRI. D. C. AGRAWAL , YET WE ARE BOUND BY THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL TO MAINTAIN THE JUDICIAL PROPRIETARY. THE SPECIAL BENCH HAS CATEGORICALLY HELD AS UNDER IN THIS REGARD: - IN VIEW OF AFORESAID, IT WAS TO BE HELD THAT: (1) PROVISION OF RULE 13E DOES NOT APPLY TO MEMBERS WHO HAVE RETIRED PRIOR TO THE DATE OF PUBLICATION OF NOTIFICATION. (2) IT APPLIES TO THE MEMBERS WHO RETIRED FROM THE TRIBUNAL ON OR AFTER THE DATE OF THE PUBLICATION OF THIS NOTIFICATION. (3) ONCE THE MEMBER RETIRES AFTER THE DATE OF NOT IFICATION, IT CERTAINLY APPLIES. IT DOES NOT MATTER WHEN THE MEMBERS WERE RECRUITED. EVEN IT APPLIES TO THE MEMBERS WHO ARE RECRUITED PRIOR TO THE DATE OF NOTIFICATION. CRUCIAL DATE MUST BE THE DATE OF RETIREMENT. IF IT IS AFTER 3 - 6 - 2009, IT APPLIES. (4) T HE MEMBERS WHO RETIRE ON OR AFTER 3 - 6 - 2009, EVEN IF OTHERWISE QUALIFIED TO PRACTICE UNDER SECTION 288, WOULD STILL BE DEBARRED TO APPEAR AND ARGUE BEFORE THE TRIBUNAL. : - 7 - : (5) PERSONS WHO HAVE RESIGNED FROM SERVICE PRIOR TO THE DATE OF NOTIFICATION, WITHOUT AN Y RETIREMENT BENEFITS WOULD NOT BE COVERED BY THIS NOTIFICATION BECAUSE IT APPLIES TO THOSE PERSONS WHO HAVE RETIRED AFTER THE DATE OF NOTIFICATION. THE NOTIFICATION DOES NOT APPLY TO MEMBERS WHO ARE APPOINTED ON A TEMPORARY BASIS AND RESIGN FROM SERVICE W ITHOUT BEING CONFIRMED DURING PROBATIONARY PERIOD. 3 . WE, THEREFORE, FOLLOWING THE ORDER OF THE SPECIAL BENCH HOLD THAT SHRI. D. C. AGRAWAL IS NOT ELIGIBLE TO APPEAR AND ARGUE BEFORE THE TRIBUNAL TO REPRESENT THE ASSESSEE IN THIS CASE. ACCORDINGLY, HE IS DI SCHARGED FROM THIS CASE AND THE REGISTRY IS DIRECTED TO ISSUE NOTICE TO THE PARTIES FOR FRESH HEARING FOR 24.1.2012 . ORDER PRONOUNCED IN THE OPEN COURT ON 28.12.2011. SD/ - SD/ - [B. R. JAIN ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE D: 28.12.2011 JJ: 2812 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR