VIMAL SINGHVI vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The appellant-assessee, Vimal Singhvi, proprietor of M/s. Aditi Diamonds, filed an appeal before the High Court of Judicature for Rajasthan against a judgment dated 26.09.2013 passed by the Income Tax Appellate Tribunal (ITAT), Jaipur Bench. The ITAT's judgment had allowed the appeal of the respondent-revenue and partly allowed the cross-objections of the appellant-assessee. The appellant was aggrieved by an earlier ex-parte judgment dated 07.03.2012 passed by the Commissioner of Income Tax (Appeals). The High Court had previously dismissed the assessee's appeal on merits on 14.11.2014. The assessee then appealed to the Supreme Court, which, noting the ex-parte nature of the ITAT's decision due to a lawyers' strike, set aside the High Court and ITAT judgments and restored the appeal to the ITAT for disposal on merits.

Held

The High Court held that the appeal was to be disposed of in terms of the Supreme Court's judgment dated 03.08.2018. The Supreme Court had taken note that the ex-parte decision of the ITAT was due to the non-appearance of the appellant-assessee's counsel owing to a general strike by lawyers. Consequently, the Supreme Court set aside the judgment of the High Court and the ITAT, and restored the appeal to the file of the ITAT for disposal on merits. The High Court directed that the matter be consigned to record as disposed of in light of the Supreme Court's order. No specific finding on the merits of the original dispute was made by the High Court in this proceeding.

Key Issues

1. Whether the ITAT's ex-parte judgment dated 26.09.2013, which was passed due to the non-appearance of the assessee's counsel owing to a lawyers' strike, is sustainable in law? (Question of law and fact, turning on principles of natural justice and procedural fairness). Contentions: Assessee: Argued that the ITAT's decision was ex-parte and occasioned by circumstances beyond their control (lawyers' strike), thus violating principles of natural justice. Relied on the Supreme Court's order to restore the appeal. Revenue: No arguments recorded for the revenue in this specific High Court proceeding, as the matter was disposed of based on the Supreme Court's order.