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Taj Pal Om Parkash Vs. Income-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Judge
Reported in(1982)2ITD107(Delhi)
AppellantTaj Pal Om Parkash
Respondentincome-tax Officer
Excerpt:
.....19-9-1980 and the assessee was surprised that the appeal came to be decided ex parte, because no notice of hearing was received by the assessee. he explained that by a letter dated 27-9-1980 the assessee had requested the aac to recall his order because no opportunity of being heard had been afforded to the assessee, but by his letter dated 22-10-1980 the aac informed the assessee that there was no provision under the income-tax act, 1961 ('the act'), to reopen the case once decided by the aac. he submitted that as he had not been allowed an opportunity of being heard by the aac the matter should be remitted back to him. he referred to the judgment in re. lakshmi industries & cold storage co. (p.) ltd. [1980] 124 itr 828 (all.) and the judgment in cit v. it at [1980] tax 56(2)-17.....
Judgment:
1. The assessee, a registered firm, deals in cloth and yarn on a wholesale basis. Its head office is situated at Delhi and it has a branch at Bombay. For the assessment year 1977-78, the assessment was completed on 12-10-1979 on a total income of Rs. 98,653. In this assessment a sum of Rs. 8,588 was added as extra profit in the trading account. The assessee filed an appeal on 5-12-1979 against this addition. The appeal was fixed for hearing by the AAC on 28-1-1980, but according to the AAC nobody attended before him and, therefore, the appeal was taken up on merits and decided against the assessee. The assessee's appeal is against this order of the AAC.2. The learned counsel for the assessee submitted that the order of the AAC dated 28-1-1980 was received on 19-9-1980 and the assessee was surprised that the appeal came to be decided ex parte, because no notice of hearing was received by the assessee. He explained that by a letter dated 27-9-1980 the assessee had requested the AAC to recall his order because no opportunity of being heard had been afforded to the assessee, but by his letter dated 22-10-1980 the AAC informed the assessee that there was no provision under the Income-tax Act, 1961 ('the Act'), to reopen the case once decided by the AAC. He submitted that as he had not been allowed an opportunity of being heard by the AAC the matter should be remitted back to him. He referred to the judgment in re. Lakshmi Industries & Cold Storage Co. (P.) Ltd. [1980] 124 ITR 828 (All.) and the judgment in CIT v. IT AT [1980] Tax 56(2)-17 (Ker.). The learned departmental representative relied on the order of the AAC.Sub-Divisional Officer v. Raja Srinivasa Prasad Singh AIR 1966 SCI 164 the Supreme Court has held that 'it appears to us to be well established that every court and Tribunal has inherent power to correct a mistake committed by it, which has resulted in injustice to a party'. This judgment had been referred to by the Allahabad High Court in In re. Lakshmi Industries & Cold Storage Co. (P.) Ltd. (supra) and it had been held that where the party has been deprived of a hearing on account of the mistake committed by the officer of the court, the court can, in the exercise of its inherent jurisdiction recall that order.

The Kerala High Court in CIT v. Income-tax Appellate tribunal (supra) has also held that when the Tribunal is satisfied that the ex pane order happened to be passed without giving a reasonable opportunity of being heard to the aggrieved party, it has the jurisdiction to set aside that order and proceed to pass a fresh order after hearing both sides as enjoined in Section 254(1) of the Act. In this case the allegation made by the assessee is that notice of hearing for 28-1-1980 was not received by the assessee at all. When this fact was brought to the notice of the AAC by petition dated 27-9-1980, the AAC has not stated that the aforesaid notice was not served but has refused to recall the order on the ground that there is no provision in the Act to reopen the case once decided by the AAC. The AAC has inherent power to recall an order if it had been passed without giving an opportunity of being heard to the assessee. This is clear from the authorities noted above. We would, therefore, set aside the order of the AAC and would direct him to decide the appeal afresh and according to law.

4. Since we are setting aside the order of the AAC, it is not necessary to go into the merits of the addition of Rs. 8,588.

5. In the result, for statistical purposes, the appeal shall be deemed to have been partly allowed.


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