The Commissioner Of Income Tax, Central-I,Mumbai v. M/S.wockhardt Life Sciences Ltd.…

bsb IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.5359 OF 2010 The Commissioner of Income Tax, Central-I,Mumbai. … Appellant v/s M/s.Wockhardt Life Sciences Ltd.… Respondent Mr.Vimal Gupta, senior advocate with Ms.Padma Divakar for the appellant. Mr.P.J. Pardiwalla, senior advocate with Mr.A.K. Jasani for the respondent. CORAM: S.C. DHARMADHIKARI & G.S. KULKARNI, JJ. DATED : 2ND APRIL, 2014 P. C. : 1The Commissioner of Income Tax, Central-I has preferred this appeal against the order passed by the Income Tax Appellate Tribunal, dated 30[th] March, 2010 dismissing the revenue's appeal on merits but in the absence of the revenue's authorized representative. 2It is submitted on behalf of the revenue that there are substantial questions of law, inter alia. With regard to the manner in which the Tribunal has proceeded and these questions arise for determination and consideration in this appeal, it is submitted that the revenue should not be prejudiced to such an extent as has been done by the Tribunal in this case. The appeal could not have been dismissed on merits and by the Tribunal taking up itself the task of considering the grounds in the memo of appeal in details. Apart therefrom, the Tribunal has applied the judgment and order passed in the case of the very assessee for earlier assessment year but therein the controversy was with regard to the distinct provision of the Income Tax Act, 1961. The present appeal deals with a different issue. The issues have, therefore, got mixed up and the Tribunal's finding and conclusions are vitiated in law. In ignoring the vital material and particularly the legal provisions, the Tribunal has committed a gross error of law apparent on the face of the record. 3We have heard Mr.Gupta, learned senior counsel appearing on behalf of the appellant and Mr.Pardiwalla, learned senior counsel for the respondent. We have found that the Income Tax Appellate Tribunal in the impugned order was dealing with the appeals filed by the revenue. These appeals were directed against the separate orders of the Commissioner of Income Tax (Appeals), Central-III, Mumbai, dated 26[th] June, 2008. 4In paragraph 2 of the impugned order, the Tribunal notes that the revenue had submitted before it that, on account of lack of authorization in favour of any representative, an adjournment should be granted. The Tribunal turned down the request for an adjournment because it was upset by the fact that in that week the revenue went on seeking adjournments in several matters on the ground that there is no information with the learned senior departmental representative as to why the authorized representative in this case was not able to present himself before the Bench. Yet the Tribunal proceeded to hear one Mr.Kanchan Kaushal and Mr.Dhanesh Bafna on behalf of the assessee. 5These are representatives of the assessee and with their assistance the Tribunal possibly perused the papers on record and held that the matters are covered by the orders made in the earlier assessment orders. 6However, we find that the reference to the earlier orders denotes that they pertain to the deduction under Section 80-HH and 80-I of the Income Tax Act, 1961. In the present case, the deduction is in relation to profits and gains from certain industrial undertakings other than infrastructural development undertakings. That is a matter covered by Section 80-IB of the Act, 1961. We are not inclined to undertake an exercise as requested by Mr.Pardiwalla that the provisions which have been noted by the Tribunal and one referred by us, are identical in terms. Even the deductions are identical. The parties requested us to go through the merits of the deductions and in tune with the provisions of the Act. They also invited our attention to some decisions of this Court. 6However, we find that the reference to the earlier orders denotes that they pertain to the deduction under Section 80-HH and 80-I of the Income Tax Act, 1961. In the present case, the deduction is in relation to profits and gains from certain industrial undertakings other than infrastructural development undertakings. That is a matter covered by Section 80-IB of the Act, 1961. We are not inclined to undertake an exercise as requested by Mr.Pardiwalla that the provisions which have been noted by the Tribunal and one referred by us, are identical in terms. Even the deductions are identical. The parties requested us to go through the merits of the deductions and in tune with the provisions of the Act. They also invited our attention to some decisions of this Court. 7We refrain from undertaking this exercise simply because we are disturbed by the fact that the Tribunal has hastily disposed of the appeal in the absence of the revenue's advocate, the manner in which the Tribunal proceeded to dispose of the appeal filed by the appellant and the approach of the revenue in several appeals before it. We must at once clarify that such state of affairs in matters of revenue are not common only to the Tribunal. Even before us, we find that the advocates representing the revenue are either absent or when they attend the Court they are not prepared. Even in such cases we refrain from causing any prejudice either to the revenue or to the assessee and adjourn the matter at least once or even twice to enable the parties to get ready and argue the cases. In all such matters, the paramount consideration ought to be that justice must not only be done but seen to be done. We find that the Tribunal does not adhere to this basic and fundamental principle of law and treats such matters as if they are any other appeal or proceedings. The Tribunal's orders in most cases have far reaching effect or consequences. Unless they are challenged before the higher Court, they continue to bind the authorities below the Tribunal and the parties. Therefore, the Tribunal, as a matter of last resort, undertake the exercise that has been presently undertaken by it. Meaning thereby, it should not dispose of appeals by ex-parte order on merits and unless they are pending for considerable number of years and repeatedly adjournments have been sought. The discretion should be exercised judiciously and not arbitrarily and capriciously. 8In the present case, we find that the Tribunal has not exercised the discretion judiciously and has hastily disposed of the appeal. This itself raises a substantial question of law. We have admitted this appeal on that issue and with the consent of both sides we have taken up this appeal for hearing and final disposal at this stage itself. Upon finding that there is no justification for ex-parte order on merits, we quash and set aside the impugned order of the Tribunal and restore the appeal of the revenue to the file of the Income Tax Appellate Tribunal, Mumbai Bench. Let that Tribunal decide the appeals afresh on merits and in accordance with law uninfluenced by its earlier exercise, observations and findings therein. All contentions of both sides on merits of the appeal are kept open. 9Appeal disposed of accordingly. (G.S. KULKARNI, J.) (S.C.DHARMADHIKARI, J.)