A. E. VARGHESE vs. THE COMMISSIONER OF INCOME TAX (APPEALS)
What did the High Court hold?
The High Court, while hearing the Writ Appeal, did not interfere with the learned Single Judge's decision to relegate the appellant to the alternate remedy of filing an appeal before the Income Tax Appellate Tribunal (ITAT). However, the Court modified the impugned judgment to protect the appellant from immediate recovery proceedings. The Court clarified that pending the disposal of the appeal by the ITAT, recovery proceedings for any amount confirmed against the appellant by the First Appellate Authority's order shall be kept in abeyance. This relief is conditional upon the appellant filing the appeal before the ITAT within one month from the date of the order.
What were the facts?
The appellant, A.E. Varghese, challenged an order of the First Appellate Authority under the Income Tax Act before the High Court of Kerala. The primary ground for challenge was that the First Appellate Authority, in the faceless proceedings, had not afforded the appellant a proper hearing. Although the appellant had indicated that communication should be addressed to his personal address, the notice for the appeal hearing was sent to the email address of his Chartered Accountant. The learned Single Judge dismissed the writ petition, finding no violation of natural justice as notice was sent to the CA's email, and relegated the appellant to the alternate remedy of appeal before the Income Tax Appellate Tribunal (ITAT). This Writ Appeal is filed against the Single Judge's judgment.
What were the issues?
1. Whether the First Appellate Authority, by issuing notice for the appeal hearing to the Chartered Accountant's email address instead of the appellant's designated address, violated the principles of natural justice, thereby vitiating its order? (Question of law and fact, concerning procedural fairness under the Income Tax Act). Assessee's Contention: The appellant argued that the notice for the hearing of the first appeal was sent to the Chartered Accountant's email address, contrary to the appellant's indication in the appeal form that communication should be addressed to his personal address. This led to a lack of proper hearing and a violation of natural justice principles. Revenue's Contention: The revenue, through the Standing Counsel, did not explicitly record arguments against the appellant's claim regarding the notice. However, the learned Single Judge's finding, which was upheld by the appellate court, was that notice to the CA's email address constituted sufficient compliance with natural justice as it was the address furnished on behalf of the appellant.
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Cause title — parties, addresses and appearances
JUDGMENT Dr. A.K.Jayasankaran Nambiar, J. The petitioner in WP(C).No.35663 of 2023 is the appellant herein aggrieved by the judgment dated 10.11.2023 of the learned Single Judge. The Writ Petition was filed by the appellant challenging an order of the First Appellate Authority under the Income Tax Act. The ground in the Writ Petition in its challenge against the First Appellate Authority's order was that the First Appellate Authority had not heard the appellant in the faceless proceedings that were adopted for the purposes of disposing the first appeal. In particular, it is pointed out that while the appellant had indicated in the appeal form that communication was to be addressed to the address of the appellant, the First Appellate Authority had issued notice regarding the hearing of the appeal to the email address furnished therein being that of the Chartered Accountant of the appellant. The learned Single Judge, therefore, found that there had been no violation of the principles of natural justice since the notice regarding the hearing of the appeal had already been issued to the Chartered Accountant at the email address furnished on behalf of the appellant. The learned Single Judge,
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relegated the appellant to the alternate remedy of preferring an appeal before the Income Tax Appellate Tribunal for considering the challenge against the order of the First Appellate Authority.
Before us, it is the fervent plea of Smt.Shallet K. Sam, the learned counsel appearing for the appellant that the orders of the First Appellate Authority be set aside and the matter remanded to the said Authority so as to have a fresh adjudication of the appeals. We have also heard Sri.Christopher Abraham, the learned Standing counsel for the respondents.
On an overall consideration of the facts and circumstances of the case, we are of the view that the impugned judgment of the learned Single Judge that relegates the appellant to the alternate remedy of filing an appeal before the Income Tax Appellate Tribunal need not be interfered with. At the same time, we find that the learned Single Judge had not protected the appellant against a possible demand arising consequent to the dismissal of the first appeal. To safeguard the appellant in this regard, we deem it appropriate to modify the impugned judgment of the learned Single Judge to the limited extent of clarifying that pending disposal of the appeal by the Income Tax Appellate Tribunal, the recovery proceedings for recovery of any :4:
amount confirmed against the appellant by the First Appellate order shall be kept in abeyance. It is made clear that this order is conditional upon the appellant preferring the appeal before the Income Tax Appellate Tribunal, as directed by the learned Single Judge, within a period of one month from today.
DR. A.K.JAYASANKARAN NAMBIAR JUDGE DR. KAUSER EDAPPAGATH JUDGE mns
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