2003 (3) TMI 75 - HC - Income Tax

The only contention raised by learned counsel appearing for the petitioner is to the effect that before dealing with the appeals, the Income-tax Appellate Tribunal should have given opportunity of hearing to the present petitioner. It is contended that under section 254(1) of the Income-tax Act, before deciding the appeal, it is necessary that opportunity of hearing should be given and the Income-tax Appellate Tribunal has committed illegality in not giving such opportunity to the petitioner. - the writ petition is allowed - Tribunal is required to dispose of the appeals afresh after giving opportunity of hearing to the parties concerned.

Summary

Issues:
1. Opportunity of hearing not given before deciding the appeal by the Income-tax Appellate Tribunal.
2. Interpretation of sections 254 and 260 of the Income-tax Act.
3. Obligation of the Tribunal to dispose of the appeal conformably with the judgment of the High Court or Supreme Court.
4. Requirement of affording opportunity to parties to be heard before disposing of the appeal.

Analysis:
The petitioner sought to quash the order passed by the Income-tax Appellate Tribunal, arguing that the Tribunal should have provided an opportunity of hearing before deciding the appeals, as mandated by section 254(1) of the Income-tax Act. The Department contended that under section 260, the Tribunal is required to dispose of appeals in accordance with the opinion expressed by the High Court, and thus, the procedure under section 254(1) may not be necessary. However, the court noted that the effect of a decision in a reference to the High Court is governed by section 260, but the procedure outlined in section 254 for providing an opportunity of hearing should not be disregarded.

In a reference to a previous case, the Supreme Court emphasized the importance of affording parties an opportunity to be heard before disposing of an appeal, especially when the judgment of the High Court or Supreme Court differs from that of the Tribunal. The court highlighted that the Tribunal must modify its order based on the judgment of the higher court and re-hear the appeal if necessary, ensuring that parties are given a fair chance to present their case.

Therefore, the court allowed the writ petition, quashed the impugned order, and directed the Income-tax Appellate Tribunal to dispose of the appeals afresh after providing an opportunity of hearing to the concerned parties. Emphasizing the urgency due to the age of the matters, the court instructed the appeals to be resolved promptly, preferably within eight weeks from the date of the order, without imposing any costs. Consequently, related petitions were closed to conclude the judgment.