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Judgment
J.M. Panchal, J.
In this appeal, which is filed u/s 260A of the Income Tax Act, 1961 the appellant has claimed that six substantial questions of law as suggested in para 20 of the memo of appeal arise for consideration of the court. However, after hearing the parties, we are of the opinion that, only one substantial question of law arises for our consideration. The appeal is, therefore, ordered to be admitted and following question of law is formulated for consideration of the court.
"Whether, on the facts and in the circumstances of the case, Tribunal, Ahmedabad Bench B has substantially erred in law in deciding ITA No. 1374/Ahd/92 filed by the appellant when the appellants advocate could not remain present under the impression that, hearing of the appeal would be adjourned as was repeatedly adjourned on the ground that the Bombay High Court had not decided Special Civil Application filed by Shri Mrugesh Jaykrishna."
Mr. M.R. Bhatt, learned counsel waives service of notice on behalf of the respondents.
Having regard to the facts of the case, the appeal is taken up for final disposal today.
On 19-3-1985, the customs authorities has seized US Dollars 3,04,526 as well as foreign travelling cheques of the value of US Dollars 48,500 and apprehended one Mr. C.S. Amin as well as the appellant at Sahar International Airport, Bombay. The appellant as well as Mr. Amin claimed before the customs authorities that, foreign exchange seized belonged to one Mr. Mrugesh Jaykrishna who had given the same to them for carrying to Hongkong and USA. After seizure of the foreign currency, adjudication proceedings were initiated by the customs authorities under the provision of the Customs Act as well as Foreign Exchange Regulation Act and order in original was passed by the adjudicating authority. In appeal by Mr. Amin; the order of the adjudicating authority was set aside by the appellate authority and the matter was remanded to the adjudicating authority for enhancement of fine imposed on Mr. Mrugesh Jaykrishna. That order is challenged by Mr. Mrugesh Jaykrishna in a petitioner before the Bombay High Court which has admitted the matter and granted the stay of the order impugned therein.
After obtaining the information from the customs authorities, Income Tax proceedings were initiated against Mr. Amin and Mr. Mrugesh Jaykrishna. The assessing authority found that, Mr. Mrugesh Jaykrishna was the owner of money, and therefore, addition of Rs. 46,57,400 was made in his hands on substantive basis. However, in order to protect the interest of the revenue and as money was allegedly seized from the appellant, the assessing authority also made protective assessment of the money found and seized in the hands of the appellant as well as Mr. Amin. The assessing officer further added Rs. 6,400 in the hands of the appellant on substantive basis on the statement of the appellant that, he had purchased US Dollars 400.
Subsequently, it was found by the assessing officer that, while making addition of the foreign currency found and seized, wrong exchange rate was applied. He, therefore, reopened the assessment and added Rs. 11,96,191 on account of the difference in the reassessment proceedings.
The appellant as well as Mr. Mrugesh Jaykrishna challenged the original as well as reassessment orders made in their hands. The Commissioner (Appeals) confirmed the assessment on substantive basis in the hands of Mr. Mrugesh Jaykrishna, but in the case of the appellant, addition of the value of foreign currency amounting to Rs. 46,57,400 was deleted. The Commissioner (Appeals), however, sustained the addition of Rs. 6,400. Feeling aggrieved, the revenue preferred ITA No. 1374/Alld/92 and challenged deletion of Rs. 46,57,400, whereas the appellant preferred ITA No. 1160/Ahd/92 against the sustenance of addition of Rs. 6,400.
As observed earlier, the assessing officer had made reassessment to assess correct income in terms of Indian rupee as according to him, wrong exchange rate was applied in computing the rupee value of dollar in the original assessment. The Tribunal took up and disposed of the appeal arising from the reassessment proceedings and set aside the order of Commissioner (Appeals) vide its order dated 17-8-1994, following its earlier order dated 17-8-1994 in the case of Mr. Mrugesh Jaykrishna wherein the matter was restored to file of the Commissioner (Appeals) for a fresh disposal. The appellant, therefore, filed Misc. Appln. No. 69/Ahd/1994 and R.A. No. 1662/Ahd/1994 against above referred to order of the Tribunal. On 12-10-2000 Mr. K.H. Kaji who was appearing as counsel of the appellant could not attend the hearing assuming that the appeal would be adjourned because the Bombay High Court had yet not decided the writ petition filed by Mr. Mrugesh Jaykrishna. However, the appeal was called out for hearing on 12-10-2000 and request for adjustment made by the appellant who was personally present before the Tribunal was turned down by the Tribunal. The Tribunal, after hearing the appellant who argued his case in person, has remanded the matter to Commissioner (Appeals) by judgment dated 17-10-2000, which has given rise to the present appeal.
Learned counsel for the appellant submitted that, previously hearing of the appeal was adjourned repeatedly on the ground that the Bombay High Court had not decided the petition filed by Mr. Mrugesh Jaykrishna, and therefore, without affording opportunity of being heard to the learned counsel for the appellant, the appeal could not have been taken up for hearing by the Tribunal on 12-10-2000. What was urged was that the impugned order has been passed in violation of the principles of natural justice, and therefore, the appeal should be accepted.
Mr. Akhil Kureshi, learned counsel for the revenue submitted that, record of the case does not indicate that, previously hearing of the appeal was repeatedly adjourned on the ground that the Bombay High Court had not decided the petition filed by Mr. Mrugesh Jaykrishna and as the appellant had presented his case in person, the impugned order should not be set aside on the ground that, sufficient opportunity of being heard as not afforded to the appellant.
We have heard the learned counsel for the parties and taken into consideration the orders which are produced on the record of the appeal.
In para 7 of the impugned order, the Tribunal has reproduced a part of the Tribunals earlier order dated 17-8-1994, rendered in case of Mr. Mrugesh Jaykrishna which is as under :
"28. We have considered the above submissions regarding the present status of the adjudication order. We have also gone through the appellate order of the Collector of Customs (Appeals) in the case of Shri C.S. Amin and copy of the writ petition filed by the assessee before the Bombay High Court and the order of the court granting interim stay as stated above. Having considered the above we do not agree with the contention of the learned Departmental Representative that the adjudication order of the Deputy Collector of Customs stands nullified by the subsequent order of the Collector of Customs (Appeals) as "remand does not mean nullification". It is also clear that the operative part of the order of the Collector of Customs (Appeals) directed remanding back the matter on a limited aspect and did not as such quash and set aside the entire adjudication order as a whole. In any case even as per the interim order of the High Court, the aforesaid directions of the Collector of Customs (Appeals) came to be stayed. Thus, the present status of the adjudication order is in a legal flux. As a matter of fact the Commissioner (Appeals) has taken contradictory stands inasmuch as while he accepts that the case of the revenue is based on the proceedings before the customs authorities; the subsequent adjudication proceedings before the adjudicating authority; the Collector of Customs and before the Bombay High Court are not binding on the Income Tax Authorities. Such a contradictory stand in our view, has no meaning in the eyes of law. In fact, as stated above, the proceedings before the High Court will be decisive in adjudicating upon the ownership of the foreign exchange. Hence, in our considered opinion, it will be desirable on the part of the authorities below to wait till the Bombay High Court decides vital issue of foreign currency seized by the customs authorities.
To sum up, the issue is restored back to the file of the Commissioner (Appeals) to adjudicate de novo keeping in view our observations/directions (supra) after giving an opportunity of being heard to both the parties."
The above quoted order makes it evident that the Tribunal in case of Mr. Mrugesh Jaykrishna was of the view that, outcome of the proceedings before the Bombay High Court was to be decisive in adjudicating upon the question of ownership of the foreign currency. Under the circumstances, we have no hesitation in accepting the claim of the appellant that, hearing of the appeal was repeatedly adjourned by the Tribunal on the ground that the Bombay High Court had not decided the Special Civil Application of Mr. Mrugesh Jaykrishna. In any view of the matter, the record makes it manifest that Mr. K.H. Kaji, learned counsel was representing the appellant before the Tribunal and when the matter was called out for hearing on 12-10-2000 he could not remain present to argue the case for the appellant. If the Tribunal was of the view that, it was not necessary to wait till the outcome of the petition filed by Mr. Mrugesh Jaykrishna, the reasonable request made by the appellant who was present before the Tribunal to adjourn the proceedings to enable his learned advocate to argue the case ought to have been accepted by the Tribunal, more particularly, when the matter has chequered history and determination of complicated questions of law and facts is involved. In our view, fair opportunity of presenting the case was not afforded to the appellant by the Tribunal, and therefore, the impugned order is liable to be set aside.
For the foregoing reasons, the appeal succeeds. The order dated 17-10-2000 rendered by the Tribunal in ITA No. 1374/Ahd/1992 which is impugned in the appeal is set aside. As the impugned order is set aside, all the proceedings before the Tribunal shall revive. The Tribunal is directed to dispose of all the proceedings pending before it on merits and in accordance with law after affording reasonable opportunity of being heard to the appellant. There shall be no order as to costs.