Dr. N. Rajkumar vs Deputy Commissioner of Income Tax

F.M. Ibrahim Kalifulla, J.—The substantial question of law, among other things, which arises for consideration in these appeals is "whether in the facts and circumstances of the case, the Tribunal was right in law in passing the impugned order in violation of the principles of natural justice by depriving reasonable opportunity of being heard to the appellants."

Though very many questions, on the basis of the orders impugned in these appeals, have been raised, we are inclined to set aside the impugned orders solely with a view to give a fair opportunity to the appellants and therefore we are not going into the other substantial questions of law raised in these appeals.

Before the Tribunal, there were two sets of appeals namely (i) IT(SS)A No. 33/Mad/2005 relating to block assessment period from 1-4-1996 to 4-6-2002 filed by Dr. N. Rajkumar; (ii) ITA No. 1826/Mad/2006 relating to assessment year 2002-03 filed by Dr. N. Rajkumar (HUF); (iii) IT(SS)A No. 33/Mad/2005 relating to block assessment period from 1-4-1996 to 4-6-2002 filed by Dr. K. Kannagi; and (iv) ITA No. 1827/Mad/2006 relating to block assessment year 2002-03.

According to the appellants, the appeals were heard at length by a Bench in June 2008 and it was posted for filing of written submissions. Subsequently, written submissions were also filed, however, the appeals were posted for hearing in the month of October 2008 before some other Bench and orders were reserved. Thereafter, the appeals were posted once again for hearing on 5-1-2009. In such circumstance, the appellants made a representation dated 29-12-2008 to the Vice-President of the Tribunal at Chennai praying to transfer both the appeals to be heard by some other Bench of the Tribunal in any other city in the South. There was also a reminder dt. 25-2-2009 sent by the appellants. The appellants also made are presentation to the President of Tribunal at New Delhi on 25-2-2009 by making a reference to the earlier representations and sought for a direction to the Tribunal at Madras not to proceed with the appeals. The President of the Tribunal at Delhi, by way of an administrative instruction, stated to have passed an order dated 27th Feb., 2009 to the following effect:

(i) Ask Asstt. Registrar whether file was placed before Vice President in time.

(ii) Requisition file if no order has been passed by the Bench.

The Registry of the Tribunal at Delhi forwarded the said note order to the Registrar of Tribunal, Madras Bench with a further direction that "The Asstt. Registrar, Tribunal Chennai is, therefore, requested to immediately place this U.O. along with enclosed papers before the Hon''ble Vice President (Chennai Zone) and concerned Bench at Chennai. "However, by the time the above referred to communication was issued,-it appears that the impugned orders came to be delivered on 6-3-2009 by the Tribunal at Chennai. When the appellants approached the President of Tribunal at New Delhi, by an administrative order dated 6-3-2009, it was minuted thus:

Let Zonal Vice President take action as deemed fit in the matter and inform the assessee. The President cannot interfere with the judicial powers of the Benches.

The Registry of the Tribunal at Delhi communicated the said proceedings to the Tribunal at Chennai on 16-3-2009.

When the appellants sent a further representation to the President of Tribunal at Delhi on 7-3-2009, a report was sought for by the President at Delhi from the Vice President of Tribunal, Chennai, as disclosed in the proceedings dated 16-3-2009. It is in the abovesaid background, the impugned orders came to be passed by the Tribunal on 6-3-2009.

We heard Mr. Ramachandran, learned senior counsel for the appellants and Mr. Subramanian, learned standing counsel for the respondent.

In the impugned orders, we find that the learned senior counsel, who appeared before the Tribunal also, made a request for adjournment by making reference to the representations submitted by the appellants before the President of Tribunal at New Delhi. The Tribunal was not inclined to postpone the hearing on that date namely 25-2-2009 and called upon the learned senior counsel to make his submissions. Ultimately, the Tribunal, recorded the submissions of the learned senior counsel to the following effect:

Shri Ramachandran, senior advocate submitted that written submissions in these cases are already on record, which covers the arguments in these appeals, which may be considered in case Bench is not adjourning the proceedings.

Thereafter, the Tribunal proceeded to pass the orders impugned in these appeals.

Having perused the material papers referred to above, which ultimately culminated in the passing of the impugned orders, we do not find any fault in the approach of the Tribunal in proceeding to pass final orders in the appeals. However, the fact remains that the appellants wanted a full-fledged hearing of the appeals pending before the Tribunal irrespective of the justification of the grievance expressed by them in the representations dated 29-12-2008, 25-2-2009 and 6-3-2009 seeking for transfer of cases to a Bench functioning in any other city in the South. The administrative proceedings emanated from the office of the President of Tribunal at Delhi would disclose that at least while passing administrative instructions on 27-2-2009, the President called for the files to ascertain that no order has been passed by the Tribunal at Madras as on that date. As a matter or fact, though he appeals were heard on 25-2-2009, on 27-2-2009, when administrative instructions came to be issued by the President, Tribunal, Delhi, no orders were passed and the impugned orders came to. be ultimately pronounced only on 6-3-2009.

A perusal of the representations submitted by the appellants before the President at New Delhi disclose that the appeals were heard twice by the Tribunal, once in the month of June, 2008 and in October, 2008 by two different Benches. In the above stated background, applying the well-known principle that "justice should not only be done but should be seemed to have been done", we feel that the appellants deserve a full-fledged hearing, especially when serious civil and other consequences would follow pursuant to any order that would be passed by the Tribunal in the appeals preferred by them. Therefore, while reiterating our perception that the approach of the Tribunal in not acceding to the request of the appellants counsel to postpone the hearing and proceeding with the passing of the final orders cannot be faulted, solely with a view to comply with the principles of natural justice and with a view to extend one more opportunity of hearing to the appellants, we are Inclined to set aside the orders impugned in the above appeals with a direction to the Tribunal to fix a definite time and proceed with the appeals. In fact, the appellants have filed affidavits dated 18-7-2009 expressing their unconditional undertaking that they would co-operate fully in conducting the appeal before the Tribunal without causing any delay. Dr, Anita Sumanth, learned Counsel for the appellants also made a statement across the Bar that in the event of an opportunity being extended to the appellants, the appellants would ensure that they will proceed with the hearing of the appeals before the Tribunal at Chennai without seeking any further adjournment.

Recording the affidavits of undertaking filed by the appellants as well as the statement made by the learned Counsel for the appellants, we allow the appeals on the question of law raised hereinabove by setting aside the orders impugned in the above appeals, remit the matter back to the Tribunal at Chennai for a de novo-hearing and dispose of the appeals on merits and in accordance with law. We make it clear that the appellants shall not seek any adjournment of the hearing of the appeals. In the interest of justice, we feel that it will be appropriate if the Tribunal disposes of the appeals expeditiously, preferably within a period of three months from the date of receipt of a copy of the judgment. The appeals are allowed on the above terms. No costs.