2005 (7) TMI 76 - HC - Income Tax

Obligation of the Appellate Tribunal to pronounce orders, timely communicate the copy thereof to the parties, and their receipt Held that all authorities/Tribunals are constitutionally mandated to act in conformity to the Income Tax (Appellate Tribunal) Rules, 1963. We see no reason as to why the practice prevalent in the courts in relation to dating, signing and pronouncement of judgment should not be fully made applicable to the cases pending before the ITAT. - In our view such a practice would not be opposed by any provisions of the Income-tax Act, on the contrary, the basic rule of law as well as accepted norms of administration of justice would require the Tribunal to follow such a practice. - We are also unable to see any prejudice, inconvenience or obstruction being caused to the functioning of the Income-tax Appellate Tribunal by pronouncing of its orders after enlisting them for a given date. Thus we would direct the Tribunal to pay costs of Rs. 5,000 to the Delhi Legal Services Authority

Issues Involved:
1. Obligation of the Income-tax Appellate Tribunal to pronounce orders after listing them for pronouncement.
2. Impact of the Tribunal's practice on the administration of justice and the parties involved.
3. Interpretation of statutory provisions regarding the pronouncement and communication of orders.

Detailed Analysis:

1. Obligation of the Income-tax Appellate Tribunal to Pronounce Orders:
The court examined whether the Income-tax Appellate Tribunal (ITAT) is obligated to pronounce its orders after listing them for pronouncement, despite the absence of a specific provision in the Income-tax Act. The ITAT argued that section 254(1) of the Act requires it to pass an "order" and communicate it to the parties under section 254(3) and rule 35 of the Appellate Tribunal Rules, 1963, without any obligation to pronounce the orders openly. The court, however, emphasized that the terms "pass" and "pronounce" should not be stretched to create a distinction that offends the basic rule of law. It asserted that "passing an order" can be equated to "pronouncing an order," and the Tribunal should declare its orders on the date they are signed and dated by the Members of the Bench.

2. Impact on Administration of Justice and Parties:
The court highlighted that the practice of not pronouncing orders could lead to significant delays in the communication of orders, causing prejudice to the parties involved. It noted that the right of a party to know the contents of the order on the date of its signing and declaration is a fundamental aspect of natural justice. The court referenced various legal definitions and precedents to support its view that pronouncement of orders is essential for ensuring timely and effective communication, which is crucial for the administration of justice. The court also pointed out that the Tribunal's current practice could result in appeals being filed for subsequent years while earlier appeals remain pending, leading to inefficiencies and potential injustices.

3. Interpretation of Statutory Provisions:
The court rejected the ITAT's argument that the absence of a specific provision like section 245R(6) of the Act, which requires pronouncement of advance rulings, absolves it from the obligation to pronounce its orders. It stated that procedural laws should be interpreted to further the cause of justice and avoid prejudice to the litigants. The court emphasized that the requirement to pronounce orders is inherent in the principles of natural justice and the basic rule of law, even if not explicitly stated in the statute. It concluded that the ITAT should adopt the practice of pronouncing its orders in open hearing and upon enlisting them for a given date, in addition to its obligation to communicate the orders as per section 254(3) and rule 35.

Conclusion:
The court directed the ITAT to pronounce its judgments and orders in open hearing and upon enlisting them for a given date, starting from July 15, 2005. This practice is intended to facilitate proper functioning, help litigants know the result of their appeals promptly, and avoid unnecessary delays in communication. The court also imposed costs of Rs. 5,000 on the ITAT, payable to the Delhi Legal Services Authority, for unnecessarily prolonging the proceedings on this issue.

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