ITO vs. M/s. Paras Builders (ITAT Mumbai)

The department filed an appeal before the Tribunal against the order of the CIT(A). The CIT, who sanctioned the filing of the appeal, happened to be the same CIT(A) who had allowed the assessee’s appeal. The assessee filed a C.O. claiming that the appeal was not maintainable as there was a violation of judicial propriety. It was claimed that the CIT(A) who had allowed the appeal could not, on becoming CIT, sanction the filing of an appeal against his own order as it violate the principle of “no man can be a judge in his own cause”. HELD by the Tribunal dismissing the cross-objection:

(i) The plea of the assessee that there was judicial impropriety in the case was not established because the present Commissioner of Income Tax Administration as Commissioner of Income Tax (Appeals) had passed the order and decided the issues on the basis of various case laws. However, when acting as Commissioner of Income Tax Administration and in view of the facts that there was no legal precedent by the Hon’ble Supreme Court or by the Hon’ble jurisdictional High Court on the said issue, directed the Assessing Officer to file appeal against the impugned order. It is not a case where the present person was setting in judgment of the earlier order passed by him but was acting in the capacity of administrator wherein the issues were put before higher forum to adjudicate the same.

(ii) The reliance by the Ld. AR for the assessee on the ratio laid down by the Allahabad High Court in the case of Mohd. Chand And Another (supra) is misplaced as in the facts before the Hon’ble High Court, the person who had passed the basic order was later sitting in appeal and was hearing the appeal against his own order. In such circumstances, the Hon’ble High Court held that the principles of natural justice that no man can be a judge in his own cause, was attracted. Further the Ld. AR for the assessee placed reliance on the ratio laid down by the Hon’ble Supreme Court in the case of Ashok Kumar Yadav and Others (supra) wherein also similar principle of jurisprudence that no man can be a judge in his own cause was looked into and it was observed that where there was a reasonable likelihood of bias then such decision should not be taken. The Hon’ble Apex Court held that the basic principle underlying in this rule is that justice must not only be done but must also appear to be done and this rule has received wide recognition in several decisions of the Court. It is also important to note that this rule is not confined to cases where judicial power stricto sensu is exercised. It is appropriately extended to all cases where an independent mind has to be applied to arrive at a fair and just decision between the rival claims of parties.

(iii) The principle propounded by the Hon’ble Supreme Court was in respect of a decision between rival claims of the parties. However, in the facts of the present case, the situation was at variance where the CIT(A) had passed the impugned assessment order and then as Commissioner of Income Tax Administration had directed the Assessing Officer to file an appeal before the Tribunal against the said order and the decision on the rival claims of the parties had to be taken by the Tribunal and not by the Commissioner of Income Tax Administration.