2022 (11) TMI 1415 - HC - Income Tax

Selective appeal/issues addressed by ITAT - Consolidation of revenue and assessee appeal denied - Tribunal passing order only in relation to the Respondent s appeal even though the Appellant has also filed an appeal from the same order of the CIT(A) - charging interest u/s 234B - tax was deductible at source on assessee s income u/s 195 - HELD THAT - Right course for the Tribunal should have been that a comprehensive view be taken upon hearing of the appeal preferred by the assessee as well. As decided in COMMISSIONER OF SALES TAX, UP., LUCKNOW VERSUS VIJAI INT. UDYOG 1984 (10) TMI 42 - SUPREME COURT since both the parties were before the Tribunal, it was proper that when the assessee s appeal was taken up first, the Tribunal s attention should have been drawn to the fact that the Commissioner s appeal against the same decision of the Assistant Commissioner was pending and both should have been clubbed together. If that had been done the unfortunate situation which has necessitated the present appeal to be carried to this Court would not have arisen. Course of action adopted by the Tribunal in deciding only the appeal of the Revenue in fact results in a lot of prejudice to the case of the appellant, whose appeal is still pending before the Tribunal. In fact the Tribunal would not be able to take a contrary view if at all it were to take one in the appeal preferred by the appellant, having already expressed an opinion in the appeal preferred by the Revenue. Situation could have well been avoided if both the appeals were taken for decision together. We also find in the order impugned that the Tribunal has not at all dealt with the request of the appellant herein, for purposes of a consolidation of the appeals preferred by the contesting parties, which prayer should have been dealt with appropriately in the order impugned.

Summary

Issues:
Appeal under Section 260A of the Income Tax Act, 1961 against ITAT order - Consolidation of cross-appeals before the Tribunal - Error in deciding only one appeal - Prejudice caused to the appellant - Remand for fresh consideration of both appeals.

Analysis:
The High Court heard an appeal under Section 260A of the Income Tax Act, 1961 against an order by the Income Tax Appellate Tribunal (ITAT). The Court admitted the appeal on substantial questions of law, including the issue of consolidation of cross-appeals before the Tribunal. The appellant raised concerns about the Tribunal's decision to only consider the Revenue's appeal, ignoring the appellant's appeal and the request for consolidation. The appellant argued that this approach was erroneous and would render their appeal infructuous. The Court agreed that both appeals should have been considered together to avoid prejudice to the appellant's case. Citing a Supreme Court judgment, the Court emphasized the importance of hearing both parties' appeals simultaneously to prevent such situations. The Court found that the Tribunal's failure to address the consolidation request was a flaw in the decision. Consequently, the Court allowed the appeal, framing the substantial question of law in favor of the appellant and remanding the matter to the Tribunal for fresh consideration of both appeals, emphasizing that they should be clubbed and decided together.

The Court highlighted that the Tribunal's decision to only consider the Revenue's appeal had prejudiced the appellant's case, as the Tribunal would be constrained in taking a different view in the appellant's pending appeal. By not consolidating the appeals and addressing the appellant's request, the Tribunal missed an opportunity to ensure a comprehensive and fair consideration of both parties' positions. The Court's decision to remand the matter for fresh consideration aimed to rectify this error and uphold the principles of natural justice and procedural fairness. The Court clarified that all other questions raised in the appeal remained open for consideration, ensuring a thorough examination of the issues at hand. Ultimately, the Court disposed of the Income Tax Appeal, rendering the Interim Application infructuous in light of the appeal's resolution.