ORDER
P.J. Goradia, Accountant Member
1. By this reference application moved under Section 256(1) of the Income-tax Act, 1961 the Commissioner of Income-tax, Delhi-II, New Delhi has required the Income-tax Appellate Tribunal to refer the following questions, stated to be questions of law, arising out of its order dated 22nd October, 1990 in ITA No. 800 (Del.)/1989 relating to the assessment year 1984-85, for the esteemed opinion of the Hon’ble High Court of Delhi :-
1. Whether, the provisions of Rule 19 of Appellate Tribunal Rules, 1963, entitle the ITAT to straightaway dismiss an appeal filed within the statutory limit, on account of non-appearance of the appellant’s representative?
2. Whether, on the facts and in the circumstances of the case the Id. ITAT is right in law in dismissing the departmental appeal, for default in appearance, by exercising of powers conferred under Rule 19 of the Appellate Tribunal Rules, 1963, ignoring the provisions of Rule 24 of the aforesaid Rules, which specifically provide for expane hearing and disposed of appeal on merits?
2. In our opinion, both questions do not arise out of Tribunal’s order, hence we decline to refer any of the questions. The reasons are as follows :
2.1 The appeal was fixed for hearing on 17-10-1990. Nobody represented the appellant nor any communication for adjournment was received. There was no communication or information as to why the appellant chose to remain absent on the day when the appeal was fixed and called for hearing. Respondent did not remain present because the notice issued by Registered Post with Acknowledgement Due at the address given by the appellant was returned by the postal authorities with remark “no such firm at S-243, Gr. Kailash”. Ultimately an order was passed on 22nd October, 1990 treating the appeal as unadmitted, keeping in mind the provisions of Rule 19 of the Appellate Tribunal Rules, which states that issue of notice of hearing did not mean appeal was admitted.
3, Normally when such appeals are treated as unadmitted, the assessee-appellants prefer miscellaneous petitions explaining the reasons for failure to pursue the appeals by rendering appropriate assistance to Tribunal to point out respondent’s correct address and if his presence was necessary or appeal could be disposed of as per Rule 23 of the Appellate Tribunal Rules by hearing only the appellant besides pointing out what are the mistakes in the appellate order and also to clarify other defects which might have come to notice of Bench. Again it is not for the Tribunal to search for reasons or errors in appellate order. Such miscellaneous petitions are normally filed on the basis of principles of natural justice and earlier orders are usually cancelled unless there are strong points against the admission of appeal. But the Revenue did not file such applications in spite of hinting out clearly at the time of hearing of reference application.
4. A judicial body has certain inherent powers. Decisions are taken for the purpose of proper and expeditious disposal of the appeals in present climate of mounting arrears partly due to appeals being filed without proper application of mind to facts and law and also at times for altogether extraneous considerations. Therefore, on the basis of inherent powers the Tribunal treated the appeal as unadmitted. The provisions of Rule 19 of the Appellate Tribunal Rules support such action by stating that mere issue of notice could not by itself mean that appeal had been admitted. This Rule only clarified the position. There is justification for Rule 19(2). When the appeal is presented the same is accepted. Thereafter the concerned Clerk in registry verifies whether accompanying documents are received or not and if not a memo is issued calling for the papers which are also required to be attached to appeal memo. But at no stage usually the scrutiny is made on points whether the appeal memo and contents really conform to various Appellate Tribunal Rules or is it a legally valid appeal under Section 253 of the Act. Those points if arising can be considered only at a time of hearing. And that is why the Rule prescribes that mere issue of notice does not mean appeal is admitted. This according to us, is the significance of Rule 19(2).
Again, there may be various reasons with the appellant to remain absent at the time of hearing. One of the reasons may also be a desire or absence of need to prosecute the appeal or inability to assist the Tribunal in a proper manner or to take benefit of vagaries of law. The exact reasons are only known to the appellant. The judicial body can under such circumstances, invoke the inherent powers vested in authority of the Tribunal [See Shri Bhagwan Radha Kishen v. CIT [1952] 22 ITR 104 (All.) and Mangat Ram Kuthiala v. CIT [1960] 38 ITR 1 (Punj.)]. These powers are embedded with certain inherent obligations also. One of such obligations is that whenever Rules of natural justice demand undoing of earlier action, judicial authority/discretion has to be activated at a later point of time. Therefore, the easiest way for Revenue in this case was to approach this Tribunal with a prayer for granting the opportunity to it to explain its case and this Tribunal is duty bound to accede to the request. (It may be stated that in certain cases Revenue has preferred appropriate petitions e.g. in ITA Nos. 3982 and 3983/Del./l989). But instead, the Revenue in this case not only chose to ignore the date of hearing but even did not approach this Tribunal earlier or on the following day or thereafter and ultimately after five days the order was signed. Instead of presenting appropriate petition praying for the opportunity, cancellation of the order and admission of the appeal by furnishing correct address of respondent, etc., the. Revenue chooses to add to the litigation, for no justifiable reason, not only of this Tribunal but also of the Hon’ble High Court. In our opinion, no question of law arises.
5. It was submitted at the time of hearing of the Reference Application that the language of Rule 24 of the Appellate Tribunal Rules required the Tribunal to dispose of the appeal on merits after hearing the respondent. It may be stated here that the Tribunal has not passed any order on the basis of Rule 24 of the Tribunal Rules which presupposes admission of appeal under Section 253 of the Act besides there was no question of hearing the respondent since none could be notified because of incorrect address given by the appellant and proper particulars not furnished so far.
6. In the result, the application is dismissed.