Conference between Shri V. Balasubramanian, Vice President, Income-tax Appellate Tribunal and Shri N.Subramaniam, Member, CBDT. - Income Tax - 1543/CBDT

INSTRUCTION NO. 1543/CBDT Dated: December 29, 1983 A Conference between Shri V. Balasubramanian, Vice President, Income-tax Appellate Tribunal and Shri N.Subramaniam, Member, Central Board of Direct Taxes and others representing the Tribunal and the Department respectively was held on 12th October, 1983 in the Tribunal's premises at Bombay. In this Conference difficulties faced by the Department and the Tribunal in respect of cases heard by the Tribunal were discussed. As a result of this Conference, following position has emerged. Difficulties Referred to by the Position Explained on Behalf of Department the Tribunal (1) A very large number of appeals Where large number of appeals (about 30) are fixed each day before are fixed before a Bench they a Bench and a number of them are are in respect of small cases, adjourned at the request of the covered cases, group cases or assessees. However, the Authorised easy cases and restricted to Representatives have to prepare 15 parties only. As regards each of these appeals as they regular appeals only 10 to 12 would not know in advance which appeals are normally fixed before of the appeals may not be taken each Bench. The requests for up. It was, therefore, suggested adjournment are received from that only a limited number of both, the Department and the appeals be fixed and adjournments assessee and are granted on merits to the assessees should not be only keeping in view that the other given too frequently. side is not inconvenienced. (2) The number of Benches of ITAT Normally the number of Benches in at any one place including single a place does not exceed the member Benches at a particular sanctioned number, However, on place of hearing so that the account of low pendency at one representation from the Department place and high pendency at the could be made with the authorised other place temporarily the representatives available at that Bench camps at other place. The particular place. authorised representative attached to the Bench can camp alongwith the Bench. 3. The representatives of the The same inconvenience is complained file voluminous paper books at about by the assessee Counsel also. the time of hearing without The Appellate Tribunal Rules provide giving sufficient time for the for filling of paper books long Departmental Representatives to before the hearing. The difficulty verify the correctness of the of the Tribunal is that paper books material contained in the paper are not filed always in advance, book. In all such cases the particularly by the Department. When Tribunal should adjourn the case such paper books are filed by the and grant sufficient time to assessee at the time of hearing, the enable the Departmental Represen- Tribunal does not proceed with the tatives to go through the paper hearing unless the departmental books and verify the correctness representative assures the Tribunal of the material contained therein. that the material in the paper books has been verified by him or he does It was also suggested that a copy not want time for looking into them. of the paper books filled by the In fact the Tribunal on its own assessee may be sent to the autho- wants an assurance from both the rised representative of the parties before any paper book is Department alongwith the notice of acted upon that nothing new and un-hearing fixing the appeal before verified is included in them and they the Tribunal. are signed by the concerned authorities. (4) Sometimes part heard matter Generally part heard matters are is also taken up alongwith taken up only when the same members regular appeals with the result who heard originally the case sit in that the Departmental Represen- the Bench. It is rarely that a parttative concerned may not be free heard matter comes up for hearing to appear regarding the part alongwith regular appeals. The heard matter as he may not have request for any adjustments either finished his regular work. It from Departmental Representative or was, therefore, suggested that from assessees' representative is part heard matters be taken up always granted. after the regular appeal hearings are over, preferably in the afternoon. (5) In case of multiple Benches The Tribunal marks cases chronologi- at a particular place the appeals cally to Benches A,B,C, etc. Where on fixed before a particular bench account of a special reason the are transferred to another bench. appeal is transferred from one Bench Due to short notice to the Depart- to another, the D.R. who has prepa- mental Representative appearing in red that case, before that second the case, it is difficult for him Bench which always accommodates the to move from one Bench to another D.R. by adjusting the time of the as he normally attends to a parti- hearing of that case so that the cular Bench. In case the appeal hearing in his regular Bench is not is to be argued by another D.R. disturbed. The assessee's advocates he does not have sufficient time also shift from Bench to Bench on the to prepare the appeal. It was same day depending on when and where suggested that instead of trans- their case come up. The Tribunal ferring the appeals to a always accommodates the rest repre-different Bench, such appeals sentatives of the assessees and the could be postponed and a fresh Department. The D.R. who has prepared notice of hearing could be the case should not refuse to appear postponed before the second Bench on the ground and a fresh notice of hearing could be issued by the that he is attached to the first Tribunal. Bench only, specially when the Bench is prepared to give the necessary adjustment for the time of hearing. (6) Transfer of appeals from one No transfer is made without hearing station to another puts the the objection of the Commissioner, Department to a lot of inconve- the parties and also the Bench of the nience. Such transfer orders Tribunal from where the appeal is should not be passed without transferred. Positive guidelines giving the Department an laying down adequate and clear proce-opportunity to state its obje- dure in this regard have been issued ction and Department's incon- and are followed. venience on account of such transfers should also be duly considered. No guidelines appear to have been issued in regard to exercise of powers of trans-fer contained in Rules 4(1) of the Appellate Tribunal Rules. (7) There is a feeling among It is quite possible that where Departmental Representatives on the same point the same D.R. that they are not allowed due has argued for quite some length opportunity to make their sub- in some cases and another case of missions and even the submiss- the same type of dealing with ions made by them during the same point comes up, the Bench course of hearing are not ade- assumes that unless specifically quately reflected in the app- pointed by the D.R. there is no ellate orders of the Tribunal. further necessity to repeat the arguments. Since the assessee's counsel would be arguing the case for the first time, it is possible that he is heard. In all other cases whatever time the D.R. requi-red to argue out a case is granted to him even as it is granted to the representative of the assessee. However, since the D.Rs have a feeling that due opportunity is not given to them, every effort will be taken by the Tribunal to dislodge this feeling. The specific cases where such an opportunity was not given may be brought to notice. As regards adequate discussion of the submissions in appellates orders, though a similar complaint was made by the assessees representatives also, it is generally incorrect to say that the submissions made by the parties are not adequately reflected in the appellate orders. Every thing that is said by both the sides cannot be incorporated in the appe-llate order as it would make the order run into hundreds of pages wherever a point is made which is of relevance to the dispute in appeal, the Bench invariably puts it down in the order either as part of argu-ments or in their concluding para-graphs. But arguments which have no relevance and which the Tribunal feels to be so but nevertheless the Tribunal has heard, is not expatia-ted upon in the orders. This applies well to the decisions cited. The Tribunal attempts to write a balanced order and does not ignore or blow up or down one or other par-ticular argument made by the parties However, the Benches will be advised to keep this grievance in view in writing out their orders. (8) ITAT is the highest fact The Tribunal does make enquiries for finding body and has power to ascertaining the truth. If basic make enquiries to ascertain facts are recorded in the orders of the truth. It should admini- the assessing officer or the first ster substantial justice after appellate authority, it would avoid ascertaining the truth of the a lot of difficulties involved in matter. sending the matter back. (9) The controversies in res- It would not be possible or proper pect of action under procedural for the Tribunal to ignore the clauses like Section 147, 263 and requirements of procedural sections 154 keeps the dispute alive purely like 147, 263 and 154 and decide on technical issues. The substan- only on merits of the case. Issues tial justice relates to the real of jurisdiction, limitation, etc. tax liability of the assessee. are not purely procedural clauses The technical dispute on procedu- of no importance, but form substan-ral clauses deprives the Depart- tial issues in our tax jurisprudence ment for years even to look into The proposition that even where such the merits of the matter. technical issues are raised, a deci-sion on merits could be made and this would remedy the procedural defect, is not acceptable to the Tribunal as a judicial body. Where there are basic deficiencies, the parties may even not want to pursue the issue on merits. (10) In cases where the Tribunal The Tribunal always takes up cases grants stay of the recovery pend- where stay is granted within three ing disposal of the appeal by months of such grant of stay. The them such appeals must be taken delay takes place when there is a up and disposed of within two request for adjournment, which even months from the date of grant in such cases often comes from the of stay. Department side. In the course of the discussion in the Conference, the Vice-President, ITAT pointed out the following deficiencies in the departmental representation before the Tribunal: (1) Last minute filing of appeals or applications for reference: The Registry Officers of the Tribunal are made to sit late on account of several departmental appeals or reference applications being filed at the close of the office. Sometimes they are sent to the residences of the Registry officers. This is resented by the Registry of the Tribunal. This hurried filing of large number of appeals also results in several defects. (2) Common defects found in the appeal memos/reference applications filed by the Department: (a) Non-filling of cause list. (b) Mention of wrong date of service of order. (c) Incomplete address of the assessee. (d) Signing of appeal memo by other persons as 'for the ITO' (e) Non-enclosure of annexures or enclosures of wrong annexures e.g. in quantum appeal enclosure of penalty order only. (f) Non-recording of grounds of appeal in the appeal memo. (g) Non-removal of defects even after issue of memos by the Tribunal until the date of hearing. (h) Unrelated grounds of appeal or vague grounds of appeal e.g. in appeal relating to quantum, the grounds relating to penalty or the grounds not reflecting the controversy. (i) Use of offensive language in the drafting of questions. (j) Delayed filing of appeals without application for condonation of delay. (k) In cases involving question of valuation, name and designation of the valuation officer is not indicated in the appeal memo. This delays issue of notice to him. (3) INFRUCTUOUS FILING OF APPEALS: Appeals are often filed in respect of points covered by Supreme Court decisions or Board's circulars or on finding of facts recorded by Commissioner (Appeals) or even in a case where the first appellate authority had passed order of enhancement. (4) NON-SERVICE OF NOTICE: When the notices issued by the Tribunal are not served by the postal authorities they are sent to the Income-tax authorities for service on the assessee. The service acknowledgement sent by the I.T. authorities does not show the appeal number, the date of hearing or the date of the order. Even the acknowledgments are returned after a very long time. (5) Non-production of departmental records: Sometimes as in the case of reopening of assessment, it becomes necessary for the Tribunal to see the records. Seized records are also not made available to the Tribunal. Often D.Rs. seek adjournment on the ground that records are not available. (6) Non-filing of paper books: Department is never ready with the paper books. Only after the hearing has proceeded for sometime it is realised by the Departmental Representative that a paper book is necessary. (7) Non-submission of remand reports delays disposal of case by the Tribunal. I am directed to request you to control filing of infructuous appeals and applications for reference before the Tribunal and in the interest of smooth relations between the Department and the Tribunal take effective steps to remove the deficiencies pointed out on behalf of the Tribunal.