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TMI Blog1979 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... rein, the Income-tax Appellate Tribunal, Cochin Bench, Ernakulam. The second respondent filed a cross-objection also supporting the order of the AAC. The appeal and the cross-objection filed by the department and the assessee, respectively, after due notice to the parties, were listed for hearing on October 28, 1974, by the Tribunal. On the date appointed for the hearing neither the assessee (second respondent) nor his representative was present. The Tribunal as per Ex. P-3 order allowed the appeal and dismissed the cross-objection. The decision was rendered on merits (presumably to conform to sub-s. (1) of s. 254 of the I.T. Act, 1961, hereinafter referred to as the Act) which enjoins that the Tribunal may " pass such orders thereon as it thinks fit " as pointed out by the Supreme Court in CIT v. S. Chenniappa Mudaliar [1969] 74 ITR 41, holding that the property was not agricultural in character and, as such, the resultant gain was liable to be taxed as capital gain. Against Ex. P-3 order the second respondent filed before the first respondent a reference application under s. 256(1) of the Act, for obtaining an order stating the case for reference to this court. He also filed a mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal is called on for hearing, the Tribunal may, in its discretion, either dismiss the appeal for default or may hear it ex parte : Provided that where the appeal has been dismissed for default and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the dismissal and restoring the appeal. 25. Where on the day fixed for hearing or any other day to which the hearing may be adjourned, the appellant appears and the respondent does not appear when the appeal is called on for hearing, the Tribunal may hear the appeal ex parte. Explanation.--In rules 24 and 25 'appear' means appear in person or through an authorised representative." Sri Ravindranatha Menon, the standing counsel for the revenue, submitted that the Appellate Tribunal being a creature of the statute, it can exercise only such powers as are conferred on it by the statute. In the absence of any specific provision in that behalf the Tribunal cannot review its own order as it becomes functus officio after rendering the ex parte order, whether on merits or not. He pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an ex parte award and restore the case for hearing. We have also been shown the decision of Ghose J. in Shew Paper Exchange v. ITO [1974] 93 ITR 186 (Cal), wherein the view taken is that the Income-tax Appellate Tribunal has no power to review its own order. The counsel also submitted that though the Allahabad High Court in ITO v. S. B. Singar Singh Sons [1970] 75 ITR 646 and the Calcutta High Court in Murlidhar Surda v. Income-tax Appellate Tribunal [1973] 92 ITR 189 confirmed by a Division Bench ruling in ITO v. Murlidhar Sarda [1975] 99 ITR 485, have spoken about the inherent power of the Tribunal, the view expressed by Bhagwati J. in Martin Burn's case, AIR 1958 SC 79; [1958] 13 FJR 330, in para. 13, at p. 82, does not appear to have been brought to the notice of the concerned learned judges. Sri T. L. Viswanatha Iyer, counsel for the second respondent-assessee, submitted that by virtue of the provisions contained in sub-s. (1) of s. 254 of the Act it is imperative that the Appellate Tribunal should give an opportunity of being heard to both parties before it passes an order on the appeal. According to him, an opportunity of being heard really means a reasonable opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very same judgment that though there is no express provision to that effect in the Industrial Disputes (Appellate Tribunal) Act, 1950, the Appellate Tribunal could also exercise the original jurisdiction of the Industrial Tribunal tracing such power to the provisions contained in ss. 9 and 10 of the said Act which had provided that the Appellate Tribunal shall have the same powers as are vested in a civil court and that it shall follow such procedure as may be prescribed and subject to certain conditions mentioned therein. The Supreme Court in ITO v. M.K. Mohammed Kunhi [1969] 71 ITR 815 has held that the appellate authority has in appropriate cases the power to stay proceedings relating to the recovery of penalty or tax due, from an assessee though by the provisions of the Act or the Rules powers have not been expressly conferred upon the Appellate Tribunal in that behalf. Grover J. has in para. 6, at page 818, of the above-said decision stated as follows: " The argument advanced on behalf of the appellant before us that, in the absence of any express provisions in sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal, it must be held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Upon reference being made to the High Court at the instance of the appellant-firm, notice was sent to the appellant to file paper books within three months of the receipt thereof. The clerk of the firm received the notice on May 9, 1970, but he misplaced that notice and consequently the paper books were not filed. The reference came on for hearing on August 26, 1970, when no one appeared for the appellant-firm. The High Court passed an order declining to answer the reference because the appellant had not put in an appearance and had also not filed the paper books. On September 21, 1970, when handing over charge to another, the clerk discovered that the notice had been received from the High Court. Finding on enquiry that the matter had been disposed of on August 26, 1970, the appellant filed an application for permission to file the paper books and for rehearing of the reference. The High Court dismissed that application observing that it had become functus officio to entertain the application because of its earlier order declining to answer the reference. The Supreme Court, on appeal, observed that the High Court was not functus officio in entertaining the application for reheari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for rehearing, similar to the provision for restoration of an appeal dismissed for default under r. 24, is by itself indicative of the fact that the legislature really wanted to make a deliberate distinction between the dismissal of an appeal for default on the one hand and the ex parte decisions on merits in the absence of the respondent on the other hand. We have already noticed the view expressed by the Supreme Court on the validity of r. 24 in so far as it enables the dismissal of an appeal before the Tribunal for default of appearance of the appellant. Apart from that, merely for the reason that there is no specific provision in r. 25 of the Rules enabling the Tribunal to set aside the ex parte order passed on merits, it cannot be said that the power of the Tribunal under s. 254(1) of the Act would not carry with it the power to make available a reasonable opportunity of being heard to the aggrieved party when it has subsequently realised that the ex parte order happened to be passed virtually without the aggrieved party having had the benefit of being heard. No express provision prohibiting the Tribunal from exercising the power to set aside ex parte order has been shown to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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