Case Law Details
HIGH COURT OF GUJARAT
Deputy Commissioner of Income-tax
Versus
Manu P. Vyas
SPECIAL CIVIL APPLICATION NO. 1159 of 2013
FEBRUARY 11, 2013
ORDER
AkilKureshi, J.
Petitioner-revenue has challenged an order dated 23.07.2012 passed by the Income Tax Appellate Tribunal (‘the Tribunal’ for short) in MA No. 89 of 2012. The respondent-assessee had preferred appeal before the Tribunal against the decision of CIT(Appeals) which was partially against the assessee. In such appeal, the contention of the revenue was that it was not open for the Tribunal to examine validity of the search proceedings in view of the decision of Division Bench of this Court in case of Neesa Leisure Ltd. v. Union of India [2011] 338 ITR 460. On the other hand, the assessee contended that the Tribunal would suffer from no such inhibition.
2. The Tribunal, by its detailed judgement dated 30.03.2012, considered this controversy and ruled in favour of the respondent and against the assessee. Thereafter, the Tribunal also proceeded to examine on merits various issues raised by the assessee regarding additions retained by the CIT(Appeals). On such issues, the Tribunal gave its detailed consideration and final findings as well.
3. The respondent-assessee, thereafter moved misc. civil application for rectification of above order dated 30.03.2012 passed by the Tribunal in the Tax Appeal. The stand taken by the assessee in such rectification application was that before the Tribunal, only question discussed at the time of oral submissions was with respect to the Tribunal’s power to consider the assessee’s challenge to the validity of the search itself. The assessee was informed that the Tribunal would not consider the issues of additions on merits.
4. The Tribunal, by the impugned order dated 13.07.2012, accepted the assessee’s stand. In such order it was noted that :
“4. We have heard the rival submissions and carefully perused the materials on record. On recollecting the arguments of the learned AR met out before us on the earlier occasion (Constitution of the bench being same), we are in agreement with the submission of the learned AR. The bench without recollecting the decision rendered in the open Court for having acceded to the request of the Ld. AR had passed the order on merits by placing reliance in the order of the jurisdictional High Court’s decision in the case of Neesa Leisure Ltd. Vs. Union of India reported in 338 ITR 460. We are, therefore, of the considered view that the assessee was prevented from arguing the case on merits at the time of hearing on the earlier occasions before us. Therefore, in the interest of justice, we hereby recall the order of the Tribunal dated 30th March, 2012 for hearing the case afresh. The Registry is directed to post the cases in due course and intimate both the parties. (In IT (S) A.No. 63 and 52/Ahd/2005 (BP-1-4-1995 to 26-2-2002) Rajendra M. Vyasv. DCIT, CC 12, Ahmedabad Manubhai P. Vyas (Dec.) L/h Rajendra M. VyasVs DCIT, CC-12, Ahmedabad.
5. In the result, both the Misc. Applications filed by the assessee are allowed.”
5. From the original order passed by the Tribunal on 30.03.2012, we had gathered a strong prima facie impression that the assessee was correct in contending before the Tribunal that no arguments on merits beyond the question of applicability of the decision of this Court in case of Neesa Leisure Ltd. (supra) were made. Further, since the Tribunal itself had, in its rectification order, gone on record to suggest that the assessee was correct in making such a statement, we had also inquired with the counsel for the revenue whether there was anything on record to suggest that the impression carried by the assessee and as confirmed by the Tribunal in its rectification order could be stated to be erroneous and there was any material to enquire further, particularly, when we find that the Tribunal was a best judge to record what had transpired during oral hearing before the said forum, the above question became more relevant.
6. Learned counsel Mr. Bhatt for the revenue placed on record a communication dated 08.02.2012 from one Mr. S.K. Gupta, who had appeared before the Tribunal on behalf of the revenue during the said proceedings before the Tribunal, in his letter to the Commissioner of Income Tax, he has stated as under:
“2.2 However, with respect to the arguments and merits, I do not recall whether such arguments were made or not because it is a very old matter being more than one year old. Every day we were arguing 15 to 20 appeals and therefore, being one year old, I do not have any memory with respect to the query made by Shri Manish Bhatt, Advocate as to whether the arguments were advanced on merits or not.”
7. From the record therefore, it clearly emerges that the impression carried by the assessee as confirmed by the Tribunal, is not rebutted from any further evidence on record. We would, therefore, proceed to accept the Tribunal’s recollection of what transpired during the oral hearing before it true and accurate.
8. In the result, we do not find any merits in the petition in which the principal stand of the department is that the Tribunal could not have recalled its order which was rendered on merits after by-partite hearing. When we find that the Tribunal proceeded to decide certain issues on merits without giving full opportunity to the aggrieved party to make submissions thereon, the order did certainly suffer from an error apparent on the record. Tribunal, therefore, committed no error in exercising power of rectification. We may, however, clarify that by recalling the said order, the Tribunal cannot seem to have recalled its earlier conclusions. With respect to the applicability of the decision of this Court in case of Neesa Leisure Ltd. (supra). We may hasten to add however that with respect to such an issue as far as we are concerned, we have expressed no opinion.
9. With above clarification, the petition is disposed of.
