By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Chartered Accountants
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34 (2008) 119 TTJ 501 (Mumbai)
Mafatlal Securities Ltd. v. Jt. CIT
ITA No. 1127 (Mum.) of 2001
A.Y. : 1996-97. Dated : 10-8-2007
S. 254(1) of the Income-tax Act, 1961 — Oral pronouncement
during the course of hearing is not an order at all; even otherwise, Tribunal
has inherent power to refix the cases to prevent miscarriage of justice or to
grant substantial justice, and the only condition which is required to be
satisfied is that the aggrieved party must be given an opportunity of hearing.
In the course of original hearing, the learned counsel for
the assessee stated that the facts of this case were identical to the facts of
another case decided by this Tribunal, wherein the Tribunal had decided in
favour of the assessee. Hence, the case was heard mainly as a covered case and
the result was pronounced during the course of the hearing itself.
Thereafter, during the course of further study of the files,
the Bench thought that certain observations in the decisions in two cases of
Mumbai Benches were relevant. Hence, the case was released for fresh hearing as
a part heard case so as to confront these two decisions to the assessee. The
learned counsel took a preliminary objection that the Tribunal had pronounced
the order, hence, if any decision was taken contrary to the decision pronounced,
it would amount to review of order and which was beyond its powers. The learned
Departmental Representative supported the approach of the Tribunal where an
adequate opportunity of hearing was given to the assessee before taking any
other view in the matter.
The Tribunal, relying on the decision of the Supreme Court in
the case of ITAT v. V. K. Agarwal, (1998) 150 CTR 513 (SC)/(1998) 101
Taxman 382 (SC), held that unless the order of the Bench was signed by all the
members of the Bench and was dated, it was not an order of the Tribunal. The
Tribunal noted as under :
1. Legally speaking, oral pronouncement during the course
of hearing is not an order at all. It is only an intimation of likely result
or prima facie conclusion expressed on the basis of the contentions
made by the parties. It is only a procedural aspect and it does not create any
statutory embargo or limitation.
2. No party can proceed further unless it receives an order
in writing and in the case of orders passed by the Tribunal, the limitation
also starts from the date when the order is served. Hence, oral pronouncement
does not give any inherent right or create any limitation with regard to
statutory rights of the parties to the disputes.
3. Even an entry to this effect, in the order sheet signed
by the Members of the Bench would not constitute an order within the meaning
of r. 34 of the ITAT Rules.
4. Even if it is presumed that oral pronouncement during
the course of hearing is an order, then the Tribunal being a Court of plenary
jurisdiction is well within its powers within the meaning of S. 254(1) to
refix it for clarifications before passing an order in writing. The Tribunal
has inherent power to refix the cases in such type of situations to prevent
miscarriage of justice or to grant substantial justice. The only condition
which is required to be satisfied is that the aggrieved party must be given an
opportunity of hearing which has been done in this case.
5. Similarly, the Tribunal before passing a written order
can refix the case suo motu for clarifications so as to appraise the
issue afresh in the light of other facts or material. There is nothing wrong
in it because principles of natural justice are equally applicable to judicial
authorities as these are applicable to the parties to the disputes.
6. Though the Tribunal is not akin to a Court but the
functions discharged by it are similar to a Court, hence, in addition to its
expressed statutory powers, it has got inherent power to pass such orders as
may be necessary for the ends of justice.
The following cases were also relied on by the Tribunal :
1. Oriental Building & Furnishing Co. v. CIT, (1952)
21 ITR 105 (Punj.)
2. Singar Singh & Sons v. CIT, (1965) 58 ITR 626
(All.)
3. CIT v. Dr. T. K. Jairaj, (2002) 172 CTR (Ker.)
584; (2002) 256 ITR 252 (Ker.)
4. Khushalchand B. Daga v. T. K. Surendran, ITO
(1972) 85 ITR 48 (Bom.)
Note : Similar decision was taken by the Pune Tribunal in
the case of CIT v. Jinendra Smelting & Rolling Mills, Misc. Application
No. 65/Pn/2007 in ITA No. 539 (Pn) 2006 reported in 119 TTJ 519.
