2016 (4) TMI 1083 - HC - Income Tax

Refusal of adjournment - breach of the principle of natural justice - Held that - In the present case it is not disputed that the matter was posted on 7.7.2015. It is also not disputed that prior to such date the appellant had only sought two adjournments. On account of some unavoidable reasons of the death in the family of the counsel of the appellant the concerned counsel was unable to represent the appellant on the relevant date. The fact that there was a death in the family of the counsel of the appellant is not disputed by the learned Counsel appearing for the respondent. In such circumstances considering that the appellant are not unnecessarily delaying the matter and as on the relevant date there was justifiable reason which prevented the counsel for the appellant to remain present before the learned Tribunal we find that the learned Tribunal was not justified to refuse an adjournment. Hence in the peculiar facts and circumstances of the case and in the interest of justice the learned Tribunal could have given an opportunity of hearing to the appellant for the subsequent date. Having failed to grant a short adjournment has resulted in passing the impugned order in breach of the principle of natural justice which calls for the interference of this Court. The substantial question of law is answered accordingly.

Summary

Issues involved:
1. Whether the impugned order passed by the Tribunal stands vitiated for not complying with the natural principle of justice?

Detailed Analysis:
The appellant's counsel argued that the Tribunal's order, dated 7.7.2015, was passed without giving the appellant an adequate hearing due to the counsel's absence caused by a family death. The counsel contended that the Tribunal refused an adjournment and proceeded to decide the matter on merits without hearing the appellant. The appellant requested a remand for a fresh hearing. On the other hand, the respondent's counsel supported the impugned order, stating that the appeal had no merits as the appellant had withdrawn all contentions before the Appellate Authority. The respondent's counsel argued that the Tribunal's decision was justified. The appellant's counsel rebutted, claiming that the withdrawal was conditional, and there was no unconditional withdrawal of the appeal grounds.

The Court considered both parties' submissions and the records. The Court refrained from delving into the merits of the case and left the contentions open. It was noted that the appellant had only sought two adjournments before the relevant date, and the counsel's absence was due to a family death, which was undisputed. The Court found that the Tribunal was unjustified in refusing an adjournment under the circumstances. Due to the failure to grant a short adjournment, the impugned order was passed in breach of natural justice, warranting the Court's intervention. Consequently, the Court quashed the Tribunal's order, restored the appeals to the Tribunal's file, directed a fresh hearing, and left all merits contentions open.

In conclusion, the Court found that the Tribunal's decision was vitiated by not complying with the principles of natural justice, leading to the quashing of the order and the restoration of the appeals for a fresh hearing.