1972 (8) TMI 31 - HC - Income Tax

Power of tribunal to rehear the appeal cancellation of order which was passed earlier ex parte

Summary

Issues:
Assessment order appeal process; Tribunal's refusal to restore appeal; Jurisdiction of Income-tax Appellate Tribunal post-appeal disposal; Inherent powers of the Tribunal; Right to be heard after appeal disposal.

Analysis:
The case involves the assessment of the petitioner under the Indian Income-tax Act, 1922, for the assessment year 1961-62, with subsequent appeals to the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. The petitioner requested an adjournment due to illness before the Tribunal, but the appeal was decided without considering this request. The Tribunal later refused to restore the appeal, citing lack of power to cancel its order. The petitioner then challenged this decision through a writ petition under Article 226 of the Constitution.

The main issue addressed was whether the Tribunal had the jurisdiction to reconsider the appeal post its disposal. The Tribunal's powers are governed by section 33 of the Indian Income-tax Act, 1922, which is akin to section 254 of the Income-tax Act, 1961. While there was no explicit provision allowing the Tribunal to entertain post-disposal applications, the petitioner argued for inherent jurisdiction, which was contested by the revenue. The court delved into the nature of the Tribunal's powers, emphasizing that statutory grants of power implied the authority to use all necessary means to make the grant effective.

Citing precedents, including a Supreme Court case and decisions from various High Courts, the court concluded that the Tribunal indeed possessed inherent and ancillary powers to rehear a matter after disposal, especially in cases of default, lack of notice, or sufficient cause preventing a party from appearing. The court highlighted the importance of ensuring fair opportunities for parties to present their cases and held that the Tribunal's power to rehear was essential for fulfilling this objective.

The court set aside the Tribunal's order refusing to restore the appeal and directed the Tribunal to reconsider the petitioner's application for restoration and provide an opportunity for a fresh hearing. The Tribunal was instructed to assess whether the petitioner had valid reasons for recalling the previous order and to make a decision accordingly. The court granted writs in the nature of certiorari and mandamus, with a stay on the operation of the order for six weeks. No costs were awarded for the application.

In conclusion, the judgment clarifies the Tribunal's jurisdiction to rehear appeals post disposal, emphasizing the importance of fair opportunities for parties to present their cases. It underscores the inherent powers of the Tribunal to ensure justice and proper adjudication, allowing for reconsideration in cases of valid reasons for recall.