Calcutta High Court
Bata India Ltd. vs Deputy Commissioner Of Income-Tax And ... on 24 November, 1995
Equivalent citations: (1996)1CALLT97(HC), 1996(1)CHN9, [1996]217ITR871(CAL)
ORDER OF TRIBUNAL--Admission by assessee. Ratio : Tribunal's order vitiated and liable to be quashed where there was erroneous statement in the order of Tribunal that there had been admission by assessee without taking into account affidavit of assessee's counsel. Held : In the instant case, in the order under challenge the Tribunal affirmed the fact of the admission having been made by the assessee's counsel by believing the statement of the Department's Representative, Mr. M, who was not present when the said concession was made. The Tribunal also failed to consider the affidavit by the petitioner's counsel, overlooking that a counsel, who is also an officer of it, would not swear an affidavit without being fully and bona fide convinced about the correctness of the facts. Such finality, because of its far-reaching effect, must be reached by following a reasonably conscientious procedure seriously and not in a perfunctory, light or closed, manner. When the prejudice resulting therefrom is attributable to the Tribunal's mistake, error or omission, it is its bounden duty to set it right. Application : Also to current assessment years. Income Tax Act 1961 s.255 Constitution of India art 227 Writ--JURISDICTION OF HIGH COURT--Serious miscarriage of justice. Ratio & Held : For prevailing grave and serious miscarriage of justice including one resulting from following a patently erroneous procedure or contravention of basic principles of justice and fair play, the supervisory and superintending jurisdiction conferred on court by article 227 remains always there. Application : Also to current assessment years. Constitution of India art 227 JUDGMENT S.K. Mookherjee, J.
1. The present application under Article 227 of the Constitution of India is directed against an order, dated September 7, 1992, passed by the Income-tax Appellate Tribunal, "E" Bench, Calcutta, in Miscellaneous Applications Nos. 50 to 52 (Calcutta of 1992), arising out of the Income-tax Appeals Nos. 1886 to 1888 (Calcutta of 1988) before the Deputy Commissioner of Income-tax, Assessment Bench-XIII. In the impugned order, the Tribunal, while rejecting the miscellaneous applications made by the assessee/petitioner under Section 254(2) of the Income-tax Act, 1961, inter alia, held that no mistake had crept in its order dated January 30, 1992. In arriving at the said conclusion, the Tribunal was called upon to deal with a prayer, amongst others, made on behalf of the assessee, for deletion of an alleged admission by the petitioner's counsel, who argued the appeals, to the effect that EDP machines were installed in the premises of the assessee-company. From the order, dated January 30, 1992, the alleged admission appears to have been recorded in paragraph 8 thereof in the following manner ;
"Admittedly, in the instant case, the EDP machines were installed in the office premises, at Shakespeare Sarani, and were not installed in the factory premises."
2. It appears from the order under challenge in the revisional proceedings, dated September 7, 1992, that though the Tribunal took note of production of the certificate of Chief Inspector of Factories from the side of the assessee, seeking to establish that the premises where the said EDP machines were installed had been treated as factory premises, it preferred to agree with the Departmental Representative, Mr. J. Mukhopadhyay, appearing before the Tribunal in connection with the miscellaneous applications, that there was such an admission made by the assessee's counsel, overlooking that at the hearing of the appeals the Department was represented by one Sri R. Biswas and not Sri Mukhopadhyay, and as such the statement made by Mr. Mukhopadhyay could not be said to be within his direct knowledge as to attribute the required firmness for being acceptable to the Tribunal without consideration of the entire records, placed before it. Even the probability of such an admission having been made had not been found upon simultaneous consideration of such records. The Tribunal's failure also to take into consideration the uncontroverted statement in the affidavit made by Sri D.K. Sen, counsel for the assessee/petitioner, who allegedly made such admission, has resulted in material procedural irregularity particularly when its consequence would be to shut out the assessee and deprive it of any relief in its pending reference cases. It cannot be denied that the procedure followed by the Tribunal has resulted in grave miscarriage of justice so far as the petitioner/assessee is concerned.
3. No doubt, by its decision, the apex court has laid down that the question as to whether an admission was made or not was to be decided by invoking the jurisdiction of the court before which such an admission is stated to have been made and the conclusion reached by such court would be final except in certain circumstances such as where the vakil or the advocate affirms an affidavit averring that no such concession was made. Even the apex court has gone to the extent of laying down that it will not be open to the members of the Bar to take stands counter to the findings of a judge in his judgment. On the question of making or not making concession (vide Sarat Chandra Maiti v. Bibhabati Debi [1921] 34 Cal LJ 302 ; AIR 1921 Cal 584 and State of Maharashtra v. Ramdas Shrinivas Nayak, ), it has nowhere been laid down, however, that in affirming the fact of making of a concession the court need not act with care and caution and need not follow a procedure which can be said to be foolproof in the context of a particular situation as that would be inconsistent with the primary obligation of a court of law. It has to be remembered that a concession takes away a very valuable right from the party making the alleged concession and the conclusion of the court must not be reached by mere show of compliance with the rules of procedure, a perfunctory observance thereof, when such rules are meant to advance the cause of justice not to short-circuit the same (vide Smt. Dipo v. Wassan Singh, ). It is also well-settled that for doing justice to the cause, all procedures remain open to the court except those which are specifically forbidden. In the instant case, in the order under challenge before us, the Tribunal as we have indicated, affirmed the fact of the admission having been made by the assessee's counsel by believing the statement of the Department's Representative, Mr. J. Mukhopadhyay, who was not present when the said concession was made. The Tribunal also failed to consider the affidavit by the petitioner's counsel, overlooking that a counsel, who is also an officer of it, would not swear an affidavit without being fully and bona fide convinced about the correctness of the facts. We do not for a moment intend to lay down that finality of the Tribunal's view can be disturbed on the basis of an affidavit of a counsel ; but what we propose to say is that such finality, because of its far-reaching effect, must be reached by following a reasonably conscientious procedure seriously and not in a perfunctory, light or closed, manner. We have already indicated our reasons for not accepting the Tribunal's findings in the order impugned before us and when the prejudice resulting therefrom is attributable to the Tribunal's mistake, error or omission, it is its bounden duty to set it right. For an authority on the above proposition reference may be made to the case of Kanai Lal v. Bhathu Shaw-C. A. No. 158 of 1963, decided by the Supreme Court on May 3, 1965, and Goaldas Sadani v. Sri Chand Jhawar reported in (75 CWN 361).
4. Before parting with the case finally with appropriate orders on the basis of reasonings, as given by us hereinabove, we would like to deal with two other technical objections raised, on behalf of the Department. The first one is that the assessee having taken recourse to the provisions of Section 254(2) was not entitled to any relief as it could not be said to be an error apparent on the face of the records. It is well-settled that mere quoting of a wrong section should not deprive a party or a litigant of a deserving relief. Reference in this connection may be made to the cases of P. Balakotaiah v. Union of India, ; J. K. Steel Ltd. v. Union of India, ; CST v. Anoop Wines, . We have already indicated the prejudicial manner in which the fact of making of the admission had been concluded by the Tribunal. We, therefore, do not think that this technical objection as raised, on behalf of the Department, can be said to have any substance.
5. The other objection, as raised by the respondent relates to the jurisdiction of this court to grant relief under Article 227 of the Constitution of India. The barriers to the grant of such relief have been well-settled by the decisions of the apex court but it is equally well-settled that for preventing grave and serious miscarriage of justice including one resulting from following a patently erroneous procedure or contravention of basic principles of justice and fair play, the supervisory and superintending jurisdiction conferred on courts by the said article remains always available. (Vide Trimbak Gangadhar Telang v. Ramchandra Ganesh Bhide, also followed in Chandavarkar Sita Ratna Rao v. Ashalata S. Guram, ). There cannot possibly be an instance of more glaring injustice or flagrant violation of procedure as in the present case where the existence of the admission may expose the assessee to large amount by way of taxation.
6. For the reasons aforesaid, we allow the revisional application, set aside the impugned order, remand the miscellaneous applications to the Tribunal for reconsideration in the light of the observations made by us hereinabove. We keep it on record that the Tribunal would record its findings with regard to the alleged admission keeping all other points open according to law for being agitated before the appropriate forum.
7. There will be no order as to costs.
B.M. Mitra, J.
8. I agree.