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United Builders v. Asstt. Commissioner Of Income-Tax, New Delhi
Factual and Procedural Background
This opinion addresses a Miscellaneous Application (M.A) filed by the assessee seeking rectification of the order dated 10-5-1999, by which ITA No. 299.Del/98 was disposed of by the Tribunal. The application, supported by an affidavit and extracts of various case laws, challenges the Tribunal's disposal of the appeal and alleges that certain grounds and evidence were not properly considered or decided upon.
Legal Issues Presented
- Whether the Tribunal erred in not deciding all the grounds raised in the appeal and rejecting them sub-silento without recording findings based on arguments and evidence.
- Whether the person against whom the order is passed is entitled to reasons explaining the rejection of their prayers, which were allegedly absent in the impugned order.
- Whether remanding the matter back to the CIT(A) validates null and void orders of the authorities below, contrary to Supreme Court precedent.
- Whether the Tribunal failed to consider affidavits, judgments, and grounds placed on record by the assessee, thereby causing a glaring mistake apparent on the record requiring rectification.
- Whether the Tribunal improperly noted that CIT(A) did not decide the appeal on merit, despite CIT(A) recording that Section 68 of the Act was rightly invoked.
- Whether special costs should have been awarded to the assessee, which the Tribunal did not consider.
- Whether the Tribunal erred in not giving reasons for not applying case law relied upon by the assessee.
Arguments of the Parties
Assessee's Arguments
- The Tribunal failed to decide all grounds raised in the appeal and rejected some sub-silento, contrary to legal requirements to record findings based on arguments and evidence.
- The assessee was denied reasons for rejection of their prayers, violating principles of natural justice.
- The Tribunal ignored guidelines and precedents laid down by the Hon'ble Supreme Court and various ITAT decisions.
- Remanding the matter to CIT(A) validates null and void orders of lower authorities, which is impermissible.
- Affidavits and evidence submitted by the assessee were ignored.
- The Tribunal wrongly recorded that CIT(A) did not decide the appeal on merit, despite CIT(A)'s clear invocation of Section 68.
- The Tribunal did not apply relevant case law or extend benefits of favorable decisions to the assessee.
- Special costs should have been awarded to the assessee.
- The Tribunal failed to provide reasons for not applying case law relied upon by the assessee.
Department's Arguments
- The order of the Tribunal was passed after appreciation of all material facts and case law.
- There was no apparent mistake in the Tribunal's order warranting interference.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| 68 ITR 462 | Tribunal must decide appeals with due care based on material facts and record; findings on all contentions must be recorded. | Assessee relied on this to argue that Tribunal failed to decide all grounds and ignored evidence. |
| 1992 E.L.T 449 | Guidelines on proper disposal of appeals by the Tribunal. | Assessee contended that these guidelines were ignored by the Tribunal. |
| AIR 1976 SC 1900 | Orders of authorities below cannot be validated if null and void by remanding the matter. | Assessee argued that remanding the matter to CIT(A) validated null and void orders, contrary to this precedent. |
| 35 ITD 276, 41 ITD 57, 55 ITR 180 | Decisions of ITD regarding proper consideration of grounds and evidence. | Assessee submitted these precedents were not followed, leading to inconsistency and indiscrimination. |
| Smt. Rita Sahni v. I.T.O (MA No. 62.Del/96) | Order recalled where all grounds were not effectively disposed of. | Assessee cited this decision as authority for recalling the impugned order. |
Court's Reasoning and Analysis
The court noted the main contention of the assessee that several affidavits, judgments, and grounds were not considered by the Tribunal, amounting to a glaring mistake apparent on the record. After considering the submissions and material presented by both parties, the court agreed that the appeal had not been fully and properly adjudicated. To meet the ends of justice, the court found it appropriate to recall the Tribunal's order and restore the appeal to its original number for fresh disposal on merit, ensuring all aspects raised by the assessee are duly considered.
Holding and Implications
The Miscellaneous Application is allowed, and the order dated 10-5-1999 in ITA No. 299.Del./98 is hereby recalled.
The Registry is directed to refix the appeal for disposal on merit afresh. This decision directly affects the parties by reopening the appeal for comprehensive consideration but does not establish any new precedent.
Phool Singh, J.M:— This M.A running into 32 pages duly supported with affidavit of Shri P.L Juneja, Advocate Supreme Court duly accompanied with copy of extract of different case laws has been moved by the Id. Counsel for the assessee for rectification of the order dated 10-5-1999 by which ITA No. 299.Del/98 was disposed of.
2. At the very beginning, Id. Counsel for the assessee mentioned that MA is containing all the arguments and the same be treated as submission of the Id. counsel for the assessee. A perusal of the application shall show that Id. Counsel has taken up different grounds and the first ground is that Tribunal has not decided all the grounds agitated in the grounds of appeal and the same stand rejected in sub-silentio which is not as per provisions of law as findings were to be recorded on the basis of arguments or on the foolproof documentary evidence and unrebutted affidavits. The second plea from the Id. Counsel is that person against whom the order is passed is entitled to know the reasons as to why his prayer is rejected but it has not been done in the impugned order of the Tribunal. The judgment of the Hon'ble Supreme Court in 68 ITR 462 was referred to in which it was laid down that Tribunal must decide the appeal with due care on the basis of material facts and record. Its finding on all the contentions has been ignored. The Tribunal Has not looked into the remaining evidence. The guidelines laid down by Hon'ble Supreme Court in 1992 E.L.T 449 were again ignored. The other plea was that orders of the authorities below were null and void but remanding the matter back to the CIT (A) by Tribunal amounts to validation of the null and void order of AO and CIT (A) which is contrary to the judgment of Hon'ble Supreme Court laid down at AIR 1976 SC 1900. The decision of ITD reported at 35 ITD 276 : 41 ITD 57 : 55 ITR 180 were not followed and it amounts to inconsistency and indiscrimination. Some of the affidavits of CAs and assessee had been ignored. Some of the grounds of the assessee have not been considered and most of the judgments which were referred to and even copies thereof were placed at record either have been referred to or not applied. It was also the case of the Id. Counsel that Tribunal has wrongly noted that CIT(A) did not decide the appeal of the assessee on merit while CIT(A) categorically recorded that provisions of Section 68 of the Act had rightly been invoked by the AO and that amounts to disposal on merit. No specific findings had been recorded on the submissions of the counsel though submissions were reproduced in the order. Legal points were also reproduced but not applied nor assessee was given the benefit of those decisions. Special cost should have been awarded to the assessee in this case and Tribunal has not considered that plea. It is also the plea that reasons were not given by the Tribunal as to why case law referred to and relied by the assessee has not been applied. The basis of these facts are that this amounts to glaring mistake apparent on the record and the same be rectified by recalling the order and rectifying the same.
3. Ld. Counsel, even after completion of the hearing had been kind enough in sending relevant extract of order of different Benches of the Tribunal, of different High Courts and Hon'ble Supreme Court through postal authority and the last was the copy of order of IT AT Delhi Bench B decision in the case of Smt. Rita Sahni v. I.T.O in which MA No. 62.Del/96 was allowed on the ground that all the grounds were not effectively disposed of and order was recalled by the Tribunal.
4. Ld. DR argued that order of the Tribunal is passed on appreciation of all the material facts as well as case law and requires no interference as there is no apparent mistake in the said order.
5. We have considered the rival submissions and perused the material to which our attention was drawn during the course of hearing by the ld. Counsel for the assessee and by the ld. DR. The main plank of ld. Counsel's arguments is that some of the affidavits remained to be discussed and some of the judgments of the ITAT Benches as well as of Hon'ble Supreme Court remained to be discussed and assessee had not been extended benefit thereof and this is apparent mistake on record. We do agree to this contention and to meet the ends of justice, it will be in the fitness of things to recall the order of the Tribunal and to restore the appeal to its original number so that all the aspects of the matter as argued by the Id. Counsel during the hearing of M.A be also looked into. We order accordingly.
6. M.A is allowed and the order dated 10-5-1999 in ITA No. 299.Del./98 is hereby recalled. Registry is directed to refix the appeal for disposal on merit afresh.
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