1999 (2) TMI 91 - AT - Income Tax

Summary

Issues Involved:
1. Limitation of assessment orders under section 143(3) read with section 144B of the Income-tax Act.
2. Requirement of granting an opportunity of being heard under section 260(1) of the Income-tax Act.
3. Tribunal's duty to decide all issues presented before it.
4. Tribunal's power under section 254(2) of the Income-tax Act to amend orders.
5. Miscarriage of justice due to piecemeal decision-making by the Tribunal.

Detailed Analysis:

1. Limitation of Assessment Orders:
The assessments in these cases were initially canceled by the ITAT on the grounds that the assessment orders were passed beyond the limitation period as provided by the Income-tax Act. The ITAT had decided the appeals solely on the issue of limitation without discussing each ground separately. However, the Hon'ble Punjab and Haryana High Court later ruled that the assessment orders were within the time limit, thus vacating the ITAT's findings and deciding in favor of the Department.

2. Requirement of Granting an Opportunity of Being Heard:
The first issue examined was whether an opportunity of being heard is necessary when passing orders under section 260(1) of the Income-tax Act. The section itself does not explicitly provide for such an opportunity. However, various courts, including the Hon'ble Supreme Court in Esthuri Aswathiah vs Commissioner of Income-tax, have interpreted that if the Tribunal's order is reversed or disturbed by the High Court, the appellant should be allowed an opportunity to be heard before the Tribunal passes consequential orders. This principle is rooted in ensuring that justice is served and that parties have a fair trial.

3. Tribunal's Duty to Decide All Issues:
The Tribunal has a duty to decide all issues presented before it by the Revenue or the assessees. It is considered a miscarriage of justice if the Tribunal decides only some issues and leaves others unresolved. This approach can lead to prolonged litigation and harassment of the parties involved. The Hon'ble Gujarat High Court in Commissioner of Income-tax vs Kartikey V. Sarabhai emphasized that the Tribunal should decide all interlocking issues to avoid such scenarios.

4. Tribunal's Power Under Section 254(2):
If the Tribunal fails to decide all issues, it is considered a mistake apparent on record, and the aggrieved party can file an application under section 254(2) of the Income-tax Act to amend the order. The Tribunal can only modify the order upon such an application and does not have the power to review orders suo motu. The Hon'ble Andhra Pradesh High Court in Commissioner of Income-tax vs Trustees of H. E. H. The Nizam's Charitable Trust affirmed that the Tribunal can address issues not decided in the original appeal under section 254(2).

5. Miscarriage of Justice Due to Piecemeal Decision-Making:
The Tribunal acknowledged that deciding issues in a piecemeal manner leads to miscarriage of justice. Both the Revenue and the appellant had not invoked section 254(2) to address unresolved issues, which could result in prolonged litigation. The Tribunal referred to the Hon'ble Supreme Court's decision in Commissioner of Income-tax vs Jubilee Mills Ltd., which emphasized that the High Court should provide effective directions to prevent injustice. Consequently, the Tribunal decided to recall its order under section 254(2) to address all remaining grounds and issues, ensuring justice for both the appellant and the Revenue.

Conclusion:
All the Miscellaneous Applications were accepted, and the Tribunal decided to recall its order to address all unresolved issues comprehensively, in line with judicial propriety and principles of natural justice.