2020 (9) TMI 74 - HC - Income Tax

Bench at Allahabad is not functioning properly due to non posting of permanent members - HELD THAT - As during last one year, the Income Tax Appellate Tribunal, Allahabad has functioned only for eleven days. It shall not be out of place to mention here that the Principal Seat of the High Court is at Allahabad. According to Sri Ashish Bansal, the Income Tax Appellate Tribunal, Allahabad has jurisdiction of all the districts of Eastern U.P., but due to non posting of permanent members at Income Tax Appellate Tribunal, Allahabad, it is not functioning properly from last several years. Prima-facie, the contention of Sri Ashish Bansal appears to be correct, particularly, in the light of the instructions of the respondent nos.1 to 4 dated 14.8.2020. Despite our order dated 7.8.2020, the respondents have not clearly stated in the instructions as to why the Income Tax Appellate Tribunal at Allahabad is not functioning. This lead us to prima-facie belief that there is failure of duty on the part of the respondent nos. 1 and 5, which amounts to denial of justice to the assessee appellants resulting in their harassment. We direct the respondent nos.1 and 5 to show cause by means of an affidavit as to why permanent members at Allahabad Income Tax Appellate Tribunal, have not been posted and why exemplary cost may not be imposed upon them for obstructing the normal functioning of the Income Tax Appellate Tribunal at Allahabad.

Issues:
1. Assessment orders creating demand for multiple assessment years.
2. Dismissal of appeals by C.I.T. (Appeals).
3. Pending appeals before the Income Tax Appellate Tribunal, Allahabad.
4. Non-functioning of the Tribunal due to lack of permanent members.
5. Impact on public interest and development work.
6. Failure of duty by respondents.
7. Harassment of assessee appellants.
8. Excessive writ petitions and pendency at Allahabad High Court.
9. Directions sought by the petitioner.

Analysis:
1. The petitioner, a development authority, faced assessment orders demanding substantial amounts for the Assessment Years 2014-15, 2015-16, and 2016-17. Appeals against these orders were dismissed by the C.I.T. (Appeals), leading to further appeals before the Income Tax Appellate Tribunal, Allahabad.

2. The petitioner expressed concern over the non-hearing of their appeals by the Tribunal while facing pressure for recovery of the demanded amounts. The petitioner argued that being an instrumentality of the State, the unsustainable demands were adversely affecting public interest and development work.

3. The Tribunal's non-functionality due to the absence of permanent members was highlighted. It was revealed that the Tribunal operated for only eleven days in the past year, causing delays and hindrances in the appeals process. The jurisdiction of the Tribunal covers all districts of Eastern U.P., but the lack of permanent members hindered its proper functioning for several years.

4. The Court observed a failure of duty on the part of the respondents, leading to a denial of justice to the assessee appellants and subjecting them to harassment. The respondents were directed to explain the reasons for not posting permanent members at the Tribunal and were asked to justify their actions to avoid the imposition of exemplary costs.

5. The Court noted an increase in writ petitions due to the delays in the appeals process before the Tribunal, contributing to the backlog of cases at the Allahabad High Court. Such inefficiencies were deemed unacceptable, emphasizing the need for a functional and efficient appellate process.

6. In response to the issues raised, the Court directed the respondents to provide a detailed affidavit justifying the lack of permanent members at the Tribunal and scheduled a further hearing to address the matter comprehensively. The instructions provided by the respondents were recorded for reference in the ongoing proceedings.

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