THE issues before the Bench are - Whether adjournment should necessarily be granted in a case where the counsel for the assessee has certain reservations against the Judicial Member of the Bench and a representation is pending before the ITAT President; Whether when a contempt case is pending before the High Court on a reference from the Judicial Member, such Member should not hear cases and grant adjournment merely because a good number of cases before the Bench are represented by the Advocate and the CA accused of contempt; Whether when the counsel for the assessee does not want to represent the case before a particular Bench, the assessee should be hiring the services of other professionals to represent them before the Bench; Whether the counsel of a taxpayer can choose his own judicial member in the Bench; Whether seeking repeated adjournments on the ground of a complaint being lodged against the Judicial Member amounts to holding the Tribunal to ransom and Whether such behaviour of an advocate amounts to de facto boycott of the judicial proceedings. And the verdict goes against the assessee's counsel.
Facts of the case
At the time of hearing on May 31, 2013, the counsel for the assessee Praeep Kumar Kapoor, Chartered Accountant moved two sets of applications for adjournment in his individual capacity and not on behalf of the assessee. In one application it was contended that the High Court of Allahabad has restored the appeal to the Tribunal to decide the appeal expeditiously, preferably within a period of six months from the date of production of certified copy of this order. Therefore, the time limit would expire in the month of September, 2013. Against said judgment of the High Court, a petition dated 30th May, 2013 has been moved before the Hon'ble High Court for certain clarification. Copy of the same was enclosed along with the application. It was further contended that looking to the general practice followed by the Tribunal, it is expected that the President would be pleased to constitue a Bench in the month of July 2013. In this application it was also contended by the Counsel that the Judicial Member has reclused himself from hearing of S. K. Garg, Advocate and Pradeep Kumar Kapoor, C. A., therefore, it would have been in fitness of the things that the matter be referred to the President for constituting Bench for deciding the said appeals of which the Judicial Member was not a party. Through second set of application it was stated that S. K. Garg, Advocate had come back after attending the proceedings before the Settlement Commission. However, he could not make proper preparation of the case therefore, the matter be adjourned to July, 2013. Mr Garg further contended that since the contempt proceedings have been initiated by the High Court of Allahabad, Lucknow Bench against him and Pradeep Kumar Kapoor, CA, on reference made by the Judicial Member, and the judicial proprietary demands that the matter represented through him should not be heard by the Bench constituting Judicial Member as a party of it. Therefore, in the interest of justice, the hearing may be adjourned.
The CIT, D.R. K. M. Dixit strongly opposed the request of adjournment with the submission that High Court of Allahabad had restored the matter to the Tribunal with the direction to decide the appeal on merit within a period of six months. This order was passed in March, 2013, therefore, the time of six months would expire in first week of September, 2013. He also pointed out that the Lucknow Bench of the Tribunal was not regularly functioning. Now the Accountant Member had come on tour only for two weeks, therefore, the matter should be heard and disposed of within the prescribed period.
Having heard the parties, the ITAT held that,
++ we find that the High Court of Allahabad has restored the matter to the Tribunal with a direction to dispose of the appeal on merits on other points vide judgment dated 05/03/2013 within six months. Therefore, the time available with the Tribunal for the disposal of the appeal on merits is upto first week of September, 2013. It is pertinent to mention here that Lucknow Bench of the Tribunal is not regularly functioning since November, 2012 and thereafter the Accountant Member was only sent on tour in the month of March, 2013 for two weeks and 2nd time in the month of May, 2013 again for two weeks. In the light of these facts, it cannot be assumed or presumed that the Accountant Member may come on tour in the month of July, 2013. Therefore, it is in the fitness of things when the Accountant Member is on tour, this appeal should be heard and disposed of pursuant to the directions of High Court. So far as issue of reclusal of the Judicial Member from hearing of the case of S. K. Garg, Advocate and Pradeep Kumar Kapoor, C. A. is concerned, we would like to place certain facts on record in order to understand the real controversy arisen in this Bench.
++ on filing of copy of representation made by Shri S. K. Garg, Advocate to the President of I.T.A.T. in the case of Sumit Kumar Rastogi in I.T.A. No.472/Lkw/2011 and C.O. No.42/Lkw/2012 on 30th August, 2012 containing contemptuous and scurrilous allegations against the Judicial Member, the Judicial Member reclused him from hearing of those cases which were being represented by Shri S. K. Garg, Advocate by passing a speaking order. Copies of the proceedings were duly sent to the President of the I.T.A.T. with a request to issue necessary instructions as to how to deal with the situation but the President instead of issuing necessary instructions in this regard, has chosen to remain salient on the subject. In order to maintain the dignity of the Institution, the Judicial Member took cognizance of the representation made by Shri S. K. Garg, Advocate to the President, I.T.A.T. and made a reference on 19/10/2012 for criminal contempt of court u/s 15(2) of the Contempt of Court Act, 1971 against Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, CA. to the High Court of Allahabad and consequent thereto the High Court has taken a cognizance of the same and criminal contempt case against Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A. was registered vide Contempt No.310 of 2013 and now the matter is subjudice before the High Court Allahabad at Lucknow Bench in the case styled as State of U.P. vs. Shri S. K. Garg, Advocate and Another;
++ it was brought to the notice of Judicial Member in the administrative capacity that almost 25% of the appeal pending before the I.T.A.T., Lucknow Bench are being represented by Shri S. K. Garg, Advocate, therefore, it would not be fair to keep all the appeals in abeyance as substantial amount of revenue is involved therein and Revenue is pressing hard for its fixation. Having realized these facts, the Judicial Member, in the administrative capacity, has directed the Registry to list all the appeal for hearing vide order dated 15/10/2012. Thereafter, one appeal in the case of Omkar Nagreeya Sahkari Bank Ltd. I.T.A. No.572/Lkw/2012 of Shri S. K. Garg, Advocate was listed before the Judicial Member, while hearing the SMC case and the learned Counsel for the assessee Shri Pradeep Kumar Kapoor, C. A. sought adjournment, which was strongly opposed by learned D.R. While disposing of this adjournment application, it was categorically observed by the Tribunal that the reclusal of the Judicial Member from hearing the case being represented by Shri S. K. Garg, Advocate was made in a peculiar circumstances. Later on a cognizance of the representation was taken and reference for criminal contempt of court was made against Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A. to the Hon'ble High Court of Allahabad and the matter is subjudice before the Hon'ble High Court, therefore, the Judicial Member has no reservation in hearing the appeals of any assessee being represented by any Advocate/Chartered Accountant including Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A. Thereafter, the appeal was argued by Shri Pradeep Kumar Kapoor, C. A. and the appeal was disposed of vide order dated 16/04/2013. The order passed by the Judicial Member in SMC has not been challenged by the assessee. Therefore, once it has been made clear by passing a judicial order vide order dated 08/02/103 in the case of Onkar Nagriya Sahkari Bank vs. CIT in I.T.A. No. 572/Lkw/2012, that the Judicial Member has no reservation in hearing the appeals of any assessee being represented by Shri S. K. Garg, Advocate or Shri Pradeep Kumar Kapoor, C. A. after making a reference of criminal contempt of court against Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A. to the High Court, the controversy with regard to the reclusal of Judicial Member from hearing cases of Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A. no longer subsists;
++ it is pertinent to mention here that I.T.A.T. is creation of Income Tax Act through section 252 of the I. T. Act and u/s 252 the Central Government shall constitute an Appellate Tribunal to adjudicate the issues raised between the assessee and the Income-tax Department. The professionals either Advocates or Chartered Accountants can be engaged to prosecute the appeals on behalf of the assessees in a manner in which the assessee wants. Infact after filing the Power of Attorney, the professionals (Advocate or Chartered Accountant) will step into the shoes of the assessee and they will represent the case in a manner beneficial to the assessee. If a particular Advocate or a Chartered Accountant is not comfortable or has reservation with a particular judicial forum, it is his sweet will for making a representation before the said judicial forum but for that reason the judicial forum cannot be forced to adjourn all the matters for an unlimited period where the stakes of the revenue are substantially involved. The I.T.A.T. is created to adjudicate the disputes amongst the Income-tax Department and the assessee. If a particular advocate has some reservation with a particular Bench, it is for him to take a decision in this regard. Similar is the position with regard to the assessee as he has to take a final decision with regard to the appointment of his advocate or representative to represent his case before the judicial authority. The judicial authority, be it may be the Tribunal are concerned about the material placed before them while adjudicating the issues involved irrespective of the personalities of the Advocates appearing before him representing the case of the parties. In the light of these facts, when the Judicial Member has already withdrawn his order of reclusal from hearing of the cases being represented by Shri S. K. Garg, Advocate or Shri Pradeep Kumar Kapoor, C. A., there is no valid reason for the adjournment on the ground that the Judicial Member has reclused himself from hearing the cases of Shri S. K. Garg, Advocate and more so in the light of the facts that about 25% of the appeals pending before the Bench are being represented by Shri S. K. Garg, Advocate or Shri Pradeep Kumar Kapoor, C.A;
++ the conduct of the Advocates with regard to the representation on behalf of its clients was examined by the Apex Court in various judgments. In the case of Pandurang Dattatraya Khandekar vs. Bar Council of Maharashtra Bombay & Others 1984 (2) SCC 556, their Lordships have observed that an advocate stands in a loco parentis towards the litigants. Therefore, he is expected to follow norms of professional ethics and try to protect the interests of his client in relation to whom he occupies a position of trust. Counsel's paramount duty is to the client. The client is entitled to receive disinterested, sincere and honest treatment. It was further observed that no advocate can take it for granted that he will appear in the court according to his whim or convenience. It would be against professional ethics for a lawyer to abstain from the court when the cause of his client is called for hearing or further proceedings;
++ in view of settled laws, we are of the considered view that if Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A. have any reservation with the Bench comprising of Judicial Member, they may take independent decision with regard to their representation before the Bench. But for the reason that they do not want to represent the cases, the hearing cannot be adjourned and assessee would be at liberty to make some other arrangement to prosecute his case in effective manner. In the instant case the Judicial Member has already withdrawn his reclusal from hearing the case of Shri S. K. Garg, Advocate vide order dated 08/02/2013 passed in the case of Onkar Nagreeya Sahkari Bank Ltd. I.T.A. No.572/Lkw/2012. Therefore, the appeals being represented by Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A. can be heard by the Bench comprising of the Judicial Member and the assessee would be at liberty to make some alternate arrange if Shri S. K. Garg, Advocate or Shri Pradeep Kumar Kapoor, C. A. do not wish to appear before the said Bench;
++ it is for the assessee to take a decision in this regard as through whom he wants to get his matter represented. There is no dearth of tax experts/Tax Advocates in our country more particularly in Lucknow and the assessee is at liberty to hire the services of any best professionals but for the reason that a particular Advocate or the Chartered Accountant does not want to appear before the Tribunal, the hearing of the appeal cannot be adjourned.
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