2003 (3) TMI 279 - AT - Income Tax

Tribunal Denies SEDCO Intervention in Tax Appeal, Citing Procedural Concerns

The Tribunal rejected SEDCO's request for intervention in the appeal concerning the taxability of reimbursement of Mobilisation Costs. The Tribunal ... Appellate Tribunal Issues Involved:1. Taxability of reimbursement of Mobilisation Costs.2. Request for intervention by SEDCO in the Third Member Bench hearing.Detailed Analysis:1. Taxability of Reimbursement of Mobilisation Costs:The primary issue in the appeal relates to the taxability of reimbursement of Mobilisation Costs. This matter is of significant interest to a large number of assessees, including SEDCO, whose case involves an identical issue pending before the Tribunal.2. Request for Intervention by SEDCO:SEDCO requested permission to participate as Amicus Curiae in the appeal, arguing that the Tribunal had inherent powers to allow intervention by a party likely to be affected by the outcome of a decision in another assessee's appeal. The Tribunal's rules and the provisions of sections 255(3) and 255(4) do not explicitly mention intervention, but past practices have permitted such appearances.Arguments by SEDCO:- The Tribunal has inherent powers to allow intervention when the issue raised is identical in both appeals.- The point at issue is purely legal, and SEDCO should be allowed to appear as an intervenor.- Reliance on several decisions, including Mohd Hanif Quareshi v. State of Bihar and Saraswati Industrial Syndicate Ltd. v. CIT, to support the argument for intervention.Arguments by the Appellant:- Intervention in the Supreme Court and High Court is distinct as their decisions lay down the law of the land, unlike Tribunal decisions.- A Third Member case is limited to resolving the point of difference between two members and is distinct from a Special Bench hearing.- An intervenor in a Third Member case would not benefit from the views expressed by both members of the Division Bench.Arguments by the Department:- The disposal of the appeal must be in accordance with the provisions of the I.T. Act, which do not provide for an intervenor.- The Tribunal's inherent powers must be derived from the relevant provisions of the I.T. Act.- SEDCO is not aware of the facts of the present case, and a point of law cannot be argued without reference to such facts.- The interest of SEDCO is not prejudiced as the Third Member decision can be relied upon in their case once delivered.Rejoinder by SEDCO:- The issue before the Third Member is purely legal and does not require facts to be looked into.- Intervention should be allowed to avoid multiplicity of proceedings.- The ITAT, being an all-India body, should allow intervention in a Third Member case similar to a Special Bench case.Tribunal's Analysis and Conclusion:- A distinction exists between proceedings before a Special Bench, Division Bench, and a Third Member. The Third Member's role is limited to agreeing with one of the views expressed by the Division Bench members.- The practice of permitting intervenors in Special Bench cases does not apply to Third Member cases due to the different nature of proceedings.- The Tribunal's inherent powers must be exercised judiciously, and intervention in a Third Member case is not warranted.- Allowing intervention in a Third Member case would lead to procedural complications and unnecessary interim orders.Final Decision:The request for intervention by SEDCO was rejected. The Tribunal directed the Registry to fix the reference under section 255(4) before the Third Member on April 17, 2003, and issued the present interim order to the parties immediately.