Rajasthan H.C : Where Tribunal having taken a view that assessee had an arguable case, allowed its application for stay of demand, in view of fact that Tribunal subsequently took a diametrically opposite view by rejecting assessee’s adjournment application, writ petition filed by assessee was to be disposed of with a direction to Tribunal to finally hear and decide appeal

High Court Of Rajasthan

Unique Artage Vs. Union Of India

Section : 253

Mohammad Rafiq, J.

S.B. Civil Writ Petition No. 19662 Of 2013

November 11, 2013

JUDGMENT

Mohammad Rafiq, J. -This writ petition seeks to challenge the order dated August 19, 2003, passed by the Tax Recovery Officer.

2. According to the facts set up in the petition, the petitioner-partnership firm is dealer in handicrafts items. During the year under consideration, a survey under section 133A of the Income-tax Act, 1961 was conducted at its business premises. A surrender of Rs. 5,08,98,166 was taken on the alleged physical stock enforcing admission of undisclosed income of the assessee, vide notice dated October 24, 2013 (annexure 7). The Commissioner of Income-tax (Appeals) allowed the relief of Rs. 1,43,32,393 thereby sustaining the addition of Rs. 3,42,96,531. The petitioner filed an appeal before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur. The appeal was taken up for hearing on April 15, 2013, along with application seeking interim relief. On that day, the following order was passed by the Tribunal:

“Heard parties. Having perused the material, we are satisfied that the assessee has an arguable case. We, therefore, direct that the assessee’s appeal shall be heard on out of turn basis along with the Department’s cross-appeal, if any, in the first week of sitting of the Division Bench of the Income-tax Appellate Tribunal, Jaipur, in the month of June, 2013. Till such time no coercive measures shall be taken for recovery of demand from the assessee. Accordingly, the stay application stands disposed of as pronounced in the open court after conclusion of hearing on April 15, 2013.”

3. It is, however, informed that despite direction of the Tribunal that the appeal shall be heard and decided in first week of June, 2013, the Bench of the Income-tax Appellate Tribunal was not available in the month of June to hear the matter. It was later conveyed to the petitioner-assessee that hearing of the appeal shall take place on August 19, 2013. The petitioner submitted a written application to the Tribunal on August 13, 2013, for a date in the next month on the premise that a senior counsel was to appear on its behalf. The Tribunal on hearing the matter on August 19, 2013, however, passed the following order :

“Heard parties. The assessee’s appeal in I.T.A. No. 271/JP/2013 is listed for hearing today on August 19, 2013, and the assessee seeks adjournment in that case. There thus does not appear to be any urgency for getting the dispute resolved by him. That apart, we do not find this to be a good case for granting absolute stay. Finding no merit, we reject the stay and dismiss both the applications for adjournment as well as the stay application.”

4. Shri S. M. Mehta, learned senior counsel for the petitioner-assessee, argued that when the Tribunal has disposed of the stay application with the observation that the petitioner has an arguable case, which means that it had a prima facie case and with the further direction that the matter shall be heard finally in the month of June, 2013, if the matter was not heard for want of corum or non-availability of the Bench of the Tribunal, the petitioner cannot be blamed. If the Tribunal was not formed or request of the petitioner for fixing the matter in the month of September was not accepted, the Tribunal ought to have proceeded and heard the appeal finally now. It is argued that the Tribunal consisting of two members while passing the order dated April 15, 2013 (annexure 4) having held that the petitioner has an arguable case, could not have taken a diametrically opposite view on August 19, 2013, that it find no merit in the stay petition, especially when one of the members was common in the composition of the Bench of the Tribunal. Learned senior counsel submitted that the petitioner is prepared to argue the appeal finally, subject to any order that may be passed by this court within a specified time period, subject to the order passed by this court.

5. Shri Anuroop Singhi, learned counsel for the respondents, submits that the Tribunal was free to take a different view of the matter when the matter was listed before it on August 19, 2013. It is argued that in the order passed on that day, the Tribunal has also observed that survey at the premises of the petitioner revealed excess stock which was treated as unexplained investment and, therefore, if the Tribunal has taken a fresh view of the matter, its order cannot be faulted. In view of the surrender made by the assessee, the Tribunal was justified in refusing to pass any interim order and no interference is called for, especially when the appeal is yet to be heard and decided by the Tribunal. If the petitioner’s appeal succeeds, the amount, in any case, shall be refunded to it with the statutory rate of interest.

6. It is really surprising that the Tribunal having once held that the petitioner has a prima facie case while disposing of its stay petition, has taken diametrically opposite view when it later dismissed the stay petition. Moreover, when the stay petition was already dismissed, which stay petition was again dismissed, is not clear. Notwithstanding change of composition of the Bench, a certain amount of consistency is expected in the working of a statutory tribunal like the Income-tax Appellate Tribunal. The learned senior counsel is right when he argues that if the Tribunal had formed an opinion, albeit tentatively, in the matter, it should have heard and decided the appeal itself.

7. Having regard to the fact that already when the Tribunal had earlier observed that the petitioner had an arguable case, this court deems it appropriate to dispose of the writ petition directing the Tribunal to finally hear and decide the appeal. The parties are directed to appear before the Tribunal on November 25, 2013, on which date the matter shall be heard, however, if not possible, on any subsequent date but on or before December 20, 2013, the appeal should be finally decided. Observations made hereinabove, however, shall not affect the merits of the case either way.

8. The writ petition is disposed of accordingly. The stay application also stands disposed of consequently.

[Citation : 360 ITR 467]