Commissioner Of Income Tax vs Shri Sudhir Choudhrie
2005 Latest Caselaw 969 Del

JUDGMENT

Swatanter Kumar, J.

1. Notice to show cause why the appeals be not admitted returnable on 10th September, 2002, was issued by a Division Bench of this Court in all the above appeals vide order dated 20th May, 2002. In response to it the respondent-assessed appeared and took an objection in its submission that the Income Tax Appellate Tribunal had passed an order in favor of the assessed for the assessment year 1988-89 which has not been challenged by the Department and as such all subsequent appeals would have to be dismissed or adversely affected. The pendency of this matter became a matter of concern for the Court as it was stated at the Bar in different cases including the above appeals, that orders passed by the Income Tax Appellate Tribunal are not served upon the Department for years together, while on the other hand the contention of the Counsel appearing for the Income Tax Appellate tribunal was that the orders are duly communicated or served upon the authorities but sometimes they decline to accept the same and the delay is not attributable to the Registrar of the Income Tax Appellate Tribunal. Faced with these circumstances, the Court had passed the following order on 11th January, 2005:-

"The basic contention raised on behalf of the Respondent is that for the financial year 1988-89 the Tribunal had passed the order, which order has not been challenged by the Department and as such all subsequent appeals would be adversely affected in that behalf.

Be that as it may, learned Counsel for the Petitioner has placed on record a copy of the order dated 10th January, 2003 and 3rd March, 2004 We may also refer to the order of the Court dated 16th January, 2003 passed in this case. We require the Department of Income Tax's concerned office to file an affidavit in regard to the exact facts and the stand of the Department arising from the above said three documents.

We also direct the Registrar, Income-tax Appellate Tribunal to submit the report to this Court before the next date of hearing as to whether the letter dated 3rd March, 2004 was received by them or not, if received, what action has been taken.

Let the compliance of this order be done within one week from today. The Registry shall inform the Registrar, Income-tax Appellate Tribunal without process fee of this order.

List this case on 21st February, 2005.

ECHO is on.

All these cases will be shown together on the next date of hearing.'

2. Thereafter, on 24th February, 2005 again the following order was made:-

"The Registrar of the Income Tax Appellate Tribunal is present in Court. Affidavit file in Court today is taken on record. Learned Counsel appearing for the parties pray for time to file an affidavit stating as to what procedure shall be followed by the Department of Income Tax and the Appellate Tribunal to ensure that there is no delay in supply of copy of the orders passed by the Tribunal.

ECHO is on.

To come up on 10th March, 2005."

(a) Whether in absence of a specific provision in the Act, the Income Tax Appellate Tribunal is absolved of its obligation to pass 'or pronounce' orders after listing such cases for pronouncement of judgment particularly when there is no legislative mandate to the contrary in the Statute?

(b) Whether pronouncement of orders upon enlisting them for that purpose would any way be pre-judicial to the parties or adversely affect the administration of justice by the authorities as it may offend the scheme underlying the provisions of the Income Tax Act?

(c) Whether the stand of the Income Tax Appellate Tribunal that following such practice would be contrary to the provisions of the Income Tax Act can on any rationale basis withstand the test of judicial scrutiny?

"To utter or pronounce , as when the court passes sentence upon a prisoner. Also to proceed; to be rendered or given, as when judgment is said to pass for the plaintiff in a suit.

The terms also means to examine into anything and then authoritatively determine the disputed questions which it involves. In this sense a jury is said to pass upon the rights or issues in litigation before them.

3. An affidavit on behalf of the Registrar of the Income Tax Appellate Tribunal was filed which was taken on record. However, the said affidavit did not deal with the pronouncement of final orders by the Tribunal after listing them for pronouncement. Learned Counsel appearing for the Tribunal contended that keeping in view the provisions of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), it is not obligatory upon the Appellate Tribunal to pronounce final orders upon listing. In fact, the relevant provisions of law require the authorities to communicate the order to the parties and the Tribunal has been complying with the directive contained in Rule 35 of the Appellate Tribunal Rules, 1963 (hereinafter referred to as 'the Rules'). In other words, there is no statutory obligation upon the Tribunal to pronounce the judgments during working hours and after showing them in the cause list of the Tribunal. The Tribunal has not been following such a practice and does not wish to start the same being not a mandate of law. Arguments at some length were addressed by the learned Counsel appearing for the parties as well as the learned Counsel appearing for the Appellate Tribunal in this regard.

4. Serious controversy has been raised before this court on behalf of the Registrar of Income Tax Appellate Tribunal on the one hand and the Income-tax authorities on the other, in regard to the obligation of the Appellate Tribunal to pronounce orders, timely communicate the copy thereof to the parties, and its receipt. The submissions were made with some emphasis on this aspect of the matter, thus we reserved our orders in this regard, however, adjourned the appeals for hearing on merits. While referring to the present case the counsel appearing for the Income-tax authorities had placed on record a letter dated 3rd March, 2004 stating that though the orders in relation to the assessment year 1988-89 onwards had been pronounced quite early, but copies had not been given to the Department despite the fact they had demanded certified copies of the orders vide the same letter. In response thereto, peon book was produced before us to show that the orders were received by the Department or that they had even refused to receive the copies of the orders as not belonging to their circle. This controversy to a larger extent was resolved by a meeting held between the President of the Income-tax Appellate Tribunal and the Commissioner of the Income-tax in furtherance to the observation of the Court, and as already noticed an affidavit was filed by the Registrar of the Income-tax Appellate Tribunal. An incidental but a pertinent question which remained unresolved calls for certain directions by the Court in view of the stand taken by the parties particularly the Income Tax Appellate Tribunal and the Court is constrained to issue certain directions upon consideration of the following basic factors:-

5. The learned Counsel appearing for the Income Tax Appellate Tribunal fervently argued that Section 254(i) of the Act requires the Tribunal to pass an 'order' and communicate the same to the party as contemplated under Section 254(iii) of the Act read with Rule 35 of the Rules. As such the Tribunal is under no obligation to openly pronounce its orders in presence of the parties or otherwise. It was further contended that wherever the Legislature intended that the concerned forum should 'pronounce the orders' it has specifically spelled out the same by use of such expression in the Section itself. Reference in this regard has been made to the provisions of Section 245R(6) of the Act wherein the authority entertaining an application for advance ruling under Section 246Q is to pronounce its advance ruling in writing within six months from the date of the application. As is apparent from the above submissions, the entire emphasis is upon the use of two different expressions in Section 254 and 245 of the Act and the authority shall pronounce such 'orders'. In this case, we are not concerned with interpretations of charging or substantive provisions of a statute, but are concerned with the ambit and scope of a procedural law. It may not be thus, necessary for the Court to construe these procedural sections which are enabling the respective authorities under the provisions of the statute in regard to entertainment of applications and pronouncement of orders. The strict construction suggested on behalf of the Tribunal would neither be in administration of justice nor would be permissible in conformity with the settled principles of interpretation of procedural law. The fine distinction between the expression 'pass' and 'pronounce' should not be stretched to the extent that it offends the basic rule of law. The expression 'pass' in common parlance or its usual sense means 'to deliver'. It has been given wide meaning and connotations, depending on the reference in which the expression is to be construed. The Law Lexicon, 1997 Edition explain this term 'pass' as 'to be allowed or approved by a court or by a legislative or deliberative body; to be given or pronounced (in case of verdict, reference or judgment), 'Pass Judgment' as 'deliver judgment'. Black's Law Dictionary, Sixth Edition, explains the word 'pass' as follows:

In the language of conveyancing, the term means to move from one person to another, i.e. to be transferred or conveyed from one owner to another.

"Pass", 'utter', 'publish', and 'sell' are in some respects convertible terms, and in a given case, 'pass' may include utter, publish and sell.

6. In order to clearly understand the above distinction, it will be more appropriate to even refer with some elaboration the meaning and explanation of the expression 'pronounce' and 'order' in as much as they would certainly help to clarify the entire gamut of these three expressions with reference to the procedural law.

7. The terms 'pronounce' means to proclaim, to utter formally, to utter rhetorically, to declare, to utter articulate. 'Pronouncement' in relation to a judgment requires the authority to apply its mind and arrive at a conclusion whether there is any cause to modify or remit the award? Further the phrase 'pronounce judgment' would itself indicate judicial determination by reasoned order, for arriving at conclusion that decree in terms of the award be passed. Reasoning of the judgment is the antithesis to pronouncement of non-speaking orders (Union of India and Ors. vs. Manager, M/s. Jain and Associates (2001) 3 SCC 277). Meaning of 'pronounce' in terms of Black's Law Dictionary reads as under:-

To utter formally, officially, and solemnly; to declare or affirm; to declare aloud and in a formal manner. In this sense a court is said to 'pronounce' judgment or a sentence.

'A Division Bench of this Court in the case of Sujita Raj vs. Post Graduate Institute of Medical Education and Research Chandigarh etc., CWP No. 12914 of 2001 decided on 11.10.2001, held as under:-

'It is a settled principle of law that practice adopted and followed in the past to the knowledge of the public at large can legitimately be treated as good practice acceptable in law. The practice so adopted can fairly be equated to instructions or rules unless it is offending any specific provisions of law or written instructions issued by the government in that behalf....'

8. The Supreme Court in the case of Income Tax Appellate Tribunal vs. V.K. Agarwal and Another 1999 (1) SCC 16 stated that under the Income-tax Tribunal Rules 'final order' means the order of the Bench, signed and dated by the Members constituting it. After the order is signed, Tribunal shall cause it to be communicated to the assessed and the Commissioner. Expression 'order' in law is understood to be a mandate, precept; command or direction authoritatively given. The expression is wide enough to include an interim order, an final order. We are concerned with the final order in the present case and any authoritative direction, injunction, a decision upon reasoning in writing would be an order. It would include every decision and award made under the provisions of the Act. Again 'order' is said to be a formal expression to a decision which may not be a decree. Objective analysis of the above discussion would show that in substance there is really no distinction between the meaning of the expression 'pass' or 'pronounce' and consequences thereof. 'Passing of orders', as a Tribunal may consider it appropriate can hardly be differentiated from the words 'pronounce its orders'. As already noticed 'an order' is in the form of decision which contains reasoning for the conclusions and such an order is to be signed on a date by the concerned authorities. Purpose of 'passing an order' within the contemplation of Section 254(i) of the Act is to empower the Tribunal to pass such orders which it may think fit and proper in the circumstances of the case. 'Order' is a mandate, precept or command but reasoning is its soul and it would obviously be a final order or judgment. To 'pass an order' can simply be equated to 'pronounce an order', as 'pronounce' is to give one's considered or authoritative opinion on a matter or context. To articulate the distinction which is more imaginary than the real distinction, may sub-serve the basic concept of procedural law. (Reference can be made to Wharton's Law Lexicon, 14th Edition). But, there is nothing in this provision which on its plain reading or by necessary implication, may indicate that the Tribunal could decline to pronounce the orders which are obviously to be dated and signed on a given date to make such orders effective and binding. To argue that there is no specific provision like Section 245R(6) requiring the Tribunal to pronounce in its order would be travesty of justice as such an order is passed for the benefit of the parties to the lis. Communication of the order for the purposes of limitation or as postulated under Section 254(iii) falls in a different field and domain. Known precepts of procedural law would necessarily impose an obligation upon any forum or Tribunal, judicially determining the rights of the parties to declare its order on the date it is signed and declared. It will not only be unfortunate to raise such a plea in modern developed law, but would also defeat the basic rule of law. The requirement of letting the parties to know the contents of the order upon its declaration (when its dated and signed by the Bench of the Tribunal) would be the minimum requirement to the principles of natural justice. This requirement transcends all technical rules of procedure.

11. The approach which offends the case of basic notions of justice and proceeds upon a total disregard of procedural requirement inbuilt in the basic rule of law, the lone casualty would be the administration of justice. Expectation of a litigant to know of the order or its contents on the very moment it is signed, dated and declared by the Bench of the Tribunal would entirely be in conformity with the fundamental protection available to the litigant in law. The very foundation of administration of justice is firmly laid in the rule of law, and all authorities/Tribunals are constitutionally mandated to act in comity to the said rule. We see no reason as to why the practice prevalent in the courts in relation to dating, signing and pronouncement of judgment should not be fully made applicable to the cases pending before the Income Tax Appellate Tribunal. In our view such a practice would not be opposed by any provisions of the Income Tax Act, on the contrary, the basic rule of law as well as accepted norms of administration of justice would require the Tribunal to follow such a practice. In no uncertain terms, we would say that the stand taken before us on behalf of the Income Tax Appellate Tribunal is without substance and merits. In exercise of our extraordinary jurisdiction under article 226-227 of the Constitution of India we would direct the Income Tax Appellate Tribunal to pronounce its judgments and orders in open hearing and upon enlisting them for a given date. This practice shall be adopted by the Tribunal in addition to its obligation to communicate the orders as contemplated under Section 254(iii) of the Act and Rule 35 of the Rules. We are also unable to see any prejudice, inconvenience or obstruction being caused to the functioning of the Income-Tax Appellate Tribunal by pronouncing of its orders after enlisting them for a given date. Rather it would facilitate proper functioning, would help the litigant to lawfully know the result of his appeal as well as avoid unnecessary delay in communication of the orders in accordance with law. Such a practice would further the cause of justice and would also serve larger public interest. We feel that the stand taken by the Income Tax Appellate Tribunal is not quite fair and the Court has been called upon to unnecessarily spend its time on the hearing of the prolonged submissions on this aspect of the case, when the litigant and lawyers are waiting for hearing on decision on their cases pending in this Court. Consequently, we would direct the Tribunal to pay costs of Rs. 5000/- to the Delhi Legal Services Authority within one week from today.

9. It is well known that the Income Tax Appellate Tribunal determines civil controversy between the parties but the magnitude of the liabilities and consequences flowing from such orders more than often relate to huge sums of money. The right of the party to know the contents of the order on the very date of its signing and declaration cannot be denied. No procedure of law is known to prejudice the party in this manner. 'Declaration of an order' or as it is understood in law as 'pronouncement' is official declaration. The order is pronounced to the parties and not behind their back. Of course, limitation may start from the date the order is communicated to the parties in terms of the provisions of the Act. The Rules of procedure are always to further the cause of justice and avoid prejudice to the litigating parties. The provisions of Section 254(i) cannot be construed, so as to exclude the act of pronouncement. In fact, this provision does not deal with the manner of writing, dating or pronouncement of orders, but is a provision which primarily deals with the empowerment of the Tribunal to pass appropriate orders in the given facts and circumstances of a case. Even if the provisions were silent in that regard to read word 'pronouncement', to include such an act would be necessary by the very nature of things and would impose an obligation upon the Tribunal to pronounce its orders on the occasion when they are dated and signed by the Members of the Bench of the Tribunal. Dating and signing of judgment and declaration is a procedural matter and this would, if complied with by no way infringe the rules and procedure. [Reference can be made to the judgment of the Supreme Court in the case of Iqbal Ismail Sodawala vs. The State of Maharashtra and Ors. (AIR 1974 SC 1880)]. Unlike, the provisions of the Code of Civil Procedure where Section 33 and Order 20 Rule 1,2 and 3 provides for pronouncement of judgment in the open Court as well as the judgment to be dated and signed by the Judge in the open Court at the time of pronouncement, there are no provisions under the Income Tax Act which contemplates signing, dating and pronouncing of the orders passed by the Tribunal under Section 254(i) of the Act. If the submission made on behalf of the Appellate Tribunal are taken to their logical ends, there is no requirement for giving a reasoned order, signing the same and its dating etc. This all is being done in compliance to the well-accepted norms of procedural law. The source of civil procedural law are several and disparate, although together they contribute to make up general body of law and practice. They include statute law rules of great judicial precedence, practice directions prescribed and practiced norms, inherent jurisdiction, practice of courts and books on practice and procedure. Each of these source the other and the inherent power of procedure if vested in a forum and Tribunal should be resorted to further the cause of justice and no way to diminish its well-established practices. Appropriately, reference can be made to the provisions of Section 255(5) of the Act which empowers the Tribunal to regulate its own procedure in all matters arising out of exercise of its powers or of the discharge of its functions including the places at which the Benches shall hold their seating. These powers should be exercised so as to effectively give meaning to other provisions and ensure due compliance to the basic rule of law. 'Pronouncement of order' upon enlistment would certainly be a matter which would place an obligation upon the Tribunal to declare and disclose its order in accordance with law besides its communication, which sometimes could be so belated that it would not only embarrass the litigant but even may render further appeal ineffective. An appeal may not become time-bound per se but in the subsequent years the assessed or the Revenue may file appeals while the matters remained pending because the Department is neither aware of the judgment nor a copy thereof has been communicated to them by the Registrar of the Income Tax Appellate Tribunal in accordance with the Rules, as is sufficiently exhibited by narration of the above facts. Years have gone and copies of the orders were not communicated, and if communicated were allegedly declined by the Officers of the Department as not belonging to their circles. This state of affairs, must end. The appeal for the assessment year 1989-90 can hardly serve any purposes after the appeal for the year 2000-01 is preferred by the Revenue or the assessed. Pronouncement of an order would certainly put the parties at notice and they would be able to take recourse to the remedies available to them under law with some urgency, if required.

10. Rule 5A was introduced in order 20 of the Code, requiring the Court to inform the parties present in court, if not represented by a Counsel, as to which court an appeal would lie and the period of limitation and also place on file information to that affect. This no way diluted the other provisions of Order 20 in relation to pronouncement of judgment but it certainly indicates the protection which a procedural law is required to give to a litigant even at the hands of the Court. The practice being complimentary to procedural law, and usefully practiced even if prevalent in other systems of judicial administration would form a valid precept for its adoption in other systems. 'Pronouncement of judgment' is a concept which covers dating, signing and declaration of a judgment and order by the competent court. To unnecessarily dissect this wholesome concept would only result in inordinate delay and pre-judice to the litigant as is evident from the above-noticed facts. We may refer to a Division Bench of the Punjab and Haryana High Court in the case of Dr. Sudha Suri vs. Union of India 2002 (1) SLR 665 wherein the Court after discussing the detailed judgment in regard to acceptance of practice in law held as under:-

'...Thus, a good practice of the past alone can provide good guidance for future. We are of the firm view that the recommendation of the Director should always be in writing, preferably on the basis of the record. Reference in this regard can be made to a Division Bench judgment of this Court in the case of Ms. Prerna Dean Versus Christian Medical College, Ludhiana and others, C.W.P. No. 9546 of 2001, decided on 8.11.2001 where Court held as under:-

Let this direction be communicated by the Registry to the Registrar of Income Tax Appellate Tribunal for its complete compliance w.e.f. 15th July, 2005.