2017 (10) TMI 1493 - AT - Income Tax

Rectification of mistake - Unexplained delay in pronouncement of the order - HELD THAT -The orders have to be passed in variably within three months of the completion of hearing of the case. In this case, admittedly the order was passed beyond three months. No reason whatsoever for the delay has been recorded. As held in SHIVSAGAR VEG. RESTAURANT 2008 (11) TMI 64 - HIGH COURT BOMBAY such delay is incurable and even administrative clearance cannot cure the same. As held in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. 2008 (9) TMI 11 - SUPREME COURT any order of the tribunal without considering the decision of Hon'ble jurisdictional High Court or the Hon'ble Apex Court judgement even if not bought to the notice of the tribunal, results in the order of the tribunal being liable for rectification upon filing of an application under section 254(2) for containing mistake apparent from the record. Admittedly, in this case, the impugned common tribunal orders are not in accordance with the above two jurisdictional High Court's decision which clearly mandate that the order of the tribunal should be pronounced within a period of three months of the hearing of the appeal. The Income Tax Appellate Tribunal Rule 34(5) as mentioned hereinabove also provides the same. Hence, in accordance with the ratio of the above Hon'ble High Court and Hon'ble Supreme Court judgements, such decisions rendered after 3 months need to be recalled and heard afresh as they are liable for mistake apparent from record. Accordingly, we recall the afore-said common orders of the Tribunal due to delay beyond three months in pronouncing the order in accordance with the Hon'ble jurisdictional High Court decision as above - miscellaneous application filed by the assessee stands allowed.

Summary

Issues:
1. Delay in pronouncement of order.
2. Recall of the order due to delay.

Issue 1: Delay in pronouncement of order

The appellant sought the recall of the order due to an inordinate delay in pronouncing the judgment after the hearing. The appellant's counsel referred to a decision of the Hon'ble Bombay High Court in a similar case where delay was criticized. The counsel also highlighted the ITAT Rules, specifically Rule 34(5), which mandates a time limit of three months for passing the order after the conclusion of the hearing. The Hon'ble jurisdictional High Court's observations emphasized that justice delayed is justice denied, citing various legal precedents to support the argument that delayed delivery of judgments can be detrimental to the litigants. The High Court directed the President of the Appellate Tribunal to frame guidelines to prevent delays in delivering judgments. The delay in pronouncing the order beyond the stipulated time was considered a serious issue, and the High Court held that such judgments are vulnerable and should be set aside.

Issue 2: Recall of the order due to delay

The respondent, represented by the Departmental Representative, did not dispute the case law regarding the delay but argued that there was no apparent mistake in the order to warrant a recall. However, the Tribunal noted that the delay in pronouncing the order beyond three months, as per the ITAT Rules and the High Court's directive, was significant. The High Court's decision in a related case emphasized that orders must be passed within three months of the completion of the hearing. The Tribunal found that the delay in pronouncing the order was not explained and that administrative clearance could not justify the delay. Citing legal precedents, including a decision by the Hon'ble Apex Court, the Tribunal concluded that orders pronounced after three months are liable for recall and should be heard afresh. Therefore, the Tribunal allowed the appellant's miscellaneous application and recalled the common orders due to the delay in pronouncement, directing the registry to set the appeals for a new hearing.

This detailed analysis of the judgment reveals the significance of timely pronouncement of orders in accordance with legal requirements and precedents, emphasizing the importance of ensuring justice is not only done but also appears to have been done promptly.