COURT OFFICERS ARE DUTY BOUND AND MUST ASSIST COURTS / JUDGES IN RENDERING EXPEDITIOUS JUSTICE, AND NOT DELAY AND MISLEAD COURTS.Surprising two orders of High Court on same ITA , indicating very poor state of administration in High Court and unfortunate and irresponsible behavior and actions of Court Officers including Standing Counsel and Senior Counsels leading case up to the Supreme Court in case of CIT Vs. ITC Ltd.

[DEVKUMAR KOTHARI]

COURT OFFICERS ARE DUTY BOUND AND MUST ASSIST COURTS / JUDGES IN RENDERING EXPEDITIOUS JUSTICE, AND NOT DELAY AND MISLEAD COURTS.

Surprising two orders of High Court on same ITA , indicating very poor state of administration in High Court and unfortunate and irresponsible behavior and actions of Court Officers including Standing Counsel and Senior Counsels leading case up to the Supreme Court in case of CIT Vs. ITC Ltd - 2024 (1) TMI 1241 - SUPREME COURT.

First order of High Court in the case filed by CIT against assessee ITC Ltd.

2008 (9) TMI 1035 - CALCUTTA HIGH COURT - COMMISSIONER OF INCOME TAX, KOLKATA-II VERSUS M/S. I.T.C. LIMITED

Second order of High Court in the same case

2015 (12) TMI 1896 - CALCUTTA HIGH COURT dt. Dated: - 22-12-2015

Judgment of the Supreme Court restoring back to the High Court.

2024 (1) TMI 1241 - SUPREME COURT dt. Dated: - 22-1-2024 in

CIVIL APPEAL NO(S)…. OF 2024 (@ SLP(C) No. 26746 of 2016)

Just brief discussion is enough:

The income tax appeal was filed by revenue / CIT and respondent was ITC Ltd. a very large and famous multinational company of India having reputation in corporate sector, not only of India but all over the world.

Case represented by same set of counsels:

As noted in judgments by High Court in 2008 and 2015 both case were represented by the same set of counsels for the petitioner (CIT) namely S.S.Sarkar , as well as the respondent (ITC Ltd) namely Ms. Niranjana Banerjee Pal, Adv.

Time gap: There is time gap from 12-9-2008 to 22-12-2015 – that is more than 87 months.

Surprising aspects in two orders:

Both orders are on the same ITA filed by revenue and both orders are at the stage of admitting the appeal. In second order, the first order was not noticed at all.

In the first order the ITA was decided and the High Court admitted the appeal for 10 substantial questions of law (SQL). The operating and relevant portions of the order are reproduced below:

ORDER

1. The Court : We are satisfied with the grounds made in the petition for condonation of delay. Hence delay is condoned. Accordingly, the application being G.A. No. 2803 of 2008 is allowed.

2. After hearing the learned Counsel for the appellant the appeal is admitted and the following substantial question of law is referred for adjudication in this matter since we already admitted the similar question of law:

XXXXXX

SQL nos. 1 -9 are not reproduces for brevity of article as these are not important in context , scope and purpose of the article.

SQL no. 10 reads as follows:

10. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is correct in holding that the self assessment tax paid was to be deducted from the tax payable as per the assessment order for the purposes of calculating interest payable under section 234A of the Income Tax Act, 1961, though the section does not provide therefor?”

3. Let the Paper Book be filed within 8 weeks from date. Let the appeal be listed for hearing 12 weeks hence.

4. All parties concerned are to act on a xerox signed copy of this order on the usual undertakings.

5. Urgent Xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.

In the second order the ITA was again decided and the High Court discussed only one SQL and did not admit the appeal for any SQL.

The operating portions of the second order are reproduced below:

ORDER

1. The Court : We have heard Mr. M.P. Agarwal, learned Counsel for the appellant as well as Ms. Nilanjana Banerjee Pal, learned Counsel led by Mr. J.P. Khaitan for the respondent.

2. XXX

3. The Income Tax Appellate Tribunal decided the issues in favour of the assessee which relates to levy of interest under Section 234(A) as the same has also been considered in earlier assessment years.

4. Being aggrieved thereof, the instant appeal has been preferred. We have gone through the orders passed by the authorities below as well as the ITAT and we are of the opinion that no substantial question of law arises out of the judgment rendered by the Income Tax Appellate Tribunal.

5. Thus, the appeal is hereby failed and dismissed accordingly.

Observations of author:

There seems some mistakes of omission and/or wrong mention of names of
Counsels for CIT as underlined in above write-up. May be S.S. Sarkar was standing counsel or Advocate on record. In addition thereto Mr. M.P. Agarwal, appeared in hearing of 2015. Whose name is found in portion of judgment but not in list of attending advocates.

In case of respondent, name of Mr. J.P. Khaitan for the respondent is found in portion of judgment but not in list of attending advocates.

A reading of the second order of 2015, clearly suggest that there was no mention at all about first order in which appeal was admitted for ten SQL. Otherwise, second order would not have taken place as of admitting stage, instead ten SQL would have been decided.

The question is how the appeal was fixed in 2015 for admitting of SQL instead of hearing of appeal to decide 10 SQL, which were already admitted in first order of 2008.

Honorable judges are different in both hearings and as seen, there is time gap of more than 87 month in two orders. Therefore, it was very important duty of Court Officers, including counsels, particularly standing counsel / AOR for Petitioner to bring to the notice of honorable High Court the order of 2008.

The AOR and counsels of Respondent were also supposed to assist the court by bringing fact of earlier order and to request for hearing the matter on 10 SQL, already admitted.

The Respondent ITC Ltd as a responsible corporate body, was also equally responsible to bring out the facts before their counsels before hearing of 2015 and to suggest the counsels to act fairly and assist the Court. May be they had thought that not bringing the fact of 2008 order / or suppressing it will result into better results in their favor. In fact, that happened, because in first order appeal was admitted about 10 SQL whereas in second order appeal was not admitted on any SQL. If there was no appeal(or other proceeding) the matter as decided by Tribunal could attain finality, at in their case.

How it could have happened?:

Some important questions are how it happened that:

The first order was not on record / not referred at the time of second hearing by any one- the Bench officer of the Court, and Counsels of both sides being Court Officers.

How at the time of hearing in 2015 only one SQL was noticed in application by judges? Has there been any tempering of the ITA- application and list of 10 SQL was altered with only one SQL ?

Or that there have been some mismatch of documents by which applications and its annexures have changed.

Appeal before the Supreme Court and order there on:

The Appeal no as mentioned in the judgment are as follows:

CIVIL APPEAL NO(S)…. OF 2024 (@ SLP(C) No. 26746 of 2016)

From this, it is likely that in year 2024 a new Civil appeal number has been given and the appeal was filed in the year 2016 as SLP(C) No. 26746 of 2016).

Proper course of action for standing counsels of CIT and the CIT:

It was proper course of action for the counsels of petitioner CIT and the CIT to approach the High Court, tender an apology and point out serious mistake or lapse in not pointing out the existence of order of 2008 and requesting for hearing of appeal on ten SQL as per order of 2008 and to recall or set aside the order 2015.

Instead of that right course of action, they preferred to file an appeal before the Supreme Court against the order of 2015.

Order of the Supreme Court:

After granting leave, and discussing the orders of 2008 and 2015 of High Court, in para 1- 4 of the order, the Supreme Court held as follows:

Xxx para 1-4 not reproduced

“ 5. A combined reading of the two above referred orders is sufficient to explain the reason for setting aside the judgment of the High Court. There is no option except to set aside the impugned judgment of the High Court and remand the matter to High Court for hearing the appeal.

6. Accordingly, we allow this appeal, set aside the impugned judgment of the High Court in ITA No. 683 of 2008 dated 22.12.2015 and restore the appeal on the record of the High Court. The High Court shall now hear both the parties and decide the case on merits.

7. Pending application(s), if any, shall stand disposed of.”

Unquote- observations of author:

Un-necessary litigation, even before the Supreme Court:

From above discussion, it is clear that the revenue has indulged into un-necessary litigation even before the Supreme Court. Before the Supreme Court, they pointed out order of 2008, that could be and must have been at the time of hearing in 2015 before the High Court. If omission took place, they could have filed proper application of apology, recalling of order of 2015 and to hear appeal on ten SQL already admitted by the Court vide order of 2008.

Honorable Supreme Court has taken a very lenient view:

Author feels that the Supreme Court has taken a very lenient view although the mistakes, omissions of not pointing out order of 2008 before the High Court and action of filing straight away SLP before the Supreme Court is in fact serious lapses leading into wastage of time of all amounting abuse of process of law.

One can sense that neither the petitioner / CIT/ GOI nor the respondent ITC Ltd have any benefit from the above course of actions or omissions. We can see that only counsels have been benefited by the same.

Lot of time of Courts including the Supreme Court has been lost in the process.

Therefore:

this was a fit case in which heavy penalty could be imposed on Counsels of Petitioner, but taking a lenient view no order in that regard was passed.

This was also a fit case for imposing heavy cost and penalties on the petitioner, erring officers and counsels of petitioner and award in favor of the respondent who was compelled to face such litigation and for delay in the justice and continuing contingencies due to pendency of appeal of the CIT.