2020 (4) TMI 855 - AT - Income Tax

Tribunal Recalls Order, Schedules New Hearing for Fair Adjudication Process

The Tribunal allowed the Miscellaneous Applications, recalling the previous order and scheduling a new hearing before a regular Bench. The decision was ... Natural justice - patent mistake apparent on record - reliance on precedent not placed on record - parameters for reimbursement - recall of appellate order - rehearing before a regular BenchNatural justice - patent mistake apparent on record - reliance on precedent not placed on record - Impugned order suffers from a patent mistake apparent on record by relying on a precedent not brought to the parties' notice, warranting recall. - HELD THAT: - The Bench had relied on the decision in Bovis Lend Lease (I) Pvt. Ltd. in setting out parameters for treating payments as 'reimbursements'. That decision was not cited by either party, nor was it mentioned to the parties at any stage of the original hearing or when the appeal was re-fixed for clarifications. Applying the principle in the Bombay High Court decision cited in the judgment, a finding founded on a precedent not brought to the notice of the parties amounts to a breach of natural justice. The failure to inform the parties of that precedent was inadvertent but material, and therefore the impugned order contains a patent mistake apparent on the face of the record which justifies recalling the order. [Paras 4, 5]Order dated 07.10.2019 recalled on grounds of violation of natural justice arising from reliance on a precedent not placed before the parties.Parameters for reimbursement - recall of appellate order - rehearing before a regular Bench - Proceedings are to be re-fixed for hearing before a regular Bench after informing the parties. - HELD THAT: - While the impugned order had earlier set aside the CIT(A)'s order and directed restoration to the file of the AO for de novo adjudication because certain documents were not filed completely, the present Bench found it necessary to recall the impugned order for the reason stated above and to direct fresh adjudication. The appropriate remedial step adopted is to recall the earlier order and direct the Registry to place the matter for hearing before a regular Bench, giving both parties notice so that the issues (including the parameters for reimbursement) may be adjudicated with the parties having the opportunity to address any precedent relied upon. [Paras 5, 6]Registry directed to fix the case for hearing before a regular Bench after informing both parties; MAs allowed.Final Conclusion: The Miscellaneous Applications are allowed; the Tribunal's order dated 07.10.2019 is recalled for having relied on a precedent not placed before the parties, and the Registry is directed to list the appeals for hearing before a regular Bench after informing both parties (matters relate to AYs 2013-14 to 2016-17). Issues:Recall of ITAT order based on alleged violation of principles of natural justice and mistakes apparent from record.Analysis:The applicant filed Miscellaneous Applications seeking the recall of the ITAT order dated 07.10.2019 for AYs 2013-14 to 2016-17. The applicant contended that the reliance on a specific decision not cited or discussed by either party or the Tribunal, and the failure to consider the Hon'ble Supreme Court decision in the applicant's own case, amounted to a violation of natural justice and mistakes apparent from the record. The applicant also highlighted the non-consideration of RBI Regulations/Guidelines, conditions of section 194C of the Income Tax Act, and the adequacy of documents filed. The applicant urged the Tribunal to recall the order, rectify the mistakes, and adjudicate the appeal on merits.The Departmental Representative argued that a minor rectification was needed in the order but contended that there were no mistakes apparent from the record. The Tribunal examined the submissions and the impugned order, which had set aside the CIT(A)'s decision due to incomplete documents filed by the appellant. The Tribunal emphasized the need for relevant documents to decide on the issue at hand. However, the Tribunal acknowledged the applicant's argument regarding the reliance on a specific decision without prior notice to the parties, citing a precedent emphasizing the importance of bringing such reliance to the parties' attention. Consequently, the Tribunal recalled its order and directed the case to be heard before a regular Bench after informing both parties.In conclusion, the Tribunal allowed the Miscellaneous Applications, recalling the previous order and scheduling a new hearing before a regular Bench. The decision was based on the acknowledgment of the oversight in relying on a specific decision without notifying the parties, aligning with the principles of natural justice and ensuring a fair adjudication process.