LATE SHRI TEJ RAM SHARMA L/H CHITTARMAL SHARMA,JAIPUR V. ITO WARD 7(2), JAIPUR

MA 13/JPR/2022

AI Insights

The case involves an appeal by the legal heir of Late Shri Chittarmal Sharma against an ex-parte order of the ITAT, which dismissed the appeal for non-prosecution without deciding on the merits. The assessee argued that they did not receive notice of the hearing or the ex-parte order, and only became aware of the dismissal years later. The ITAT, after considering the circumstances and relevant legal provisions, decided to recall the ex-parte order and restore the appeal for a decision on the merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314311 (ITAT-JAIPUR)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Other Referred Cases: Om Prakash Sangwan v. ITO, Ward 33(4), New Delhi, M/s. Maa Tara Agro Industries v. ITO, Ward 4, Murshidabad, Raja Harish Chandra Raj Singh v. Dy. Land Acquisition Officer, State of Punjab Vs. Qaisar Jehan Begum & Anr., Madan Lal vs. State of U.P., D. Saibaba vs. Bar Council of India, Vijay Kumar Ruia vs. CIT, Petlad Bulakihidas Mills Co. Ltd vs. Raj Singh, Golden Times Services Private Limited v. DCIT, M/s. Techknoweledgy Interactive Partners Pvt. Ltd. v. ITO, Ward 8(3)(3), Mumbai, Getwell Health & Education Samiti, Sikar v. CIT(E), Jaipur, Raj Kumar Dey v. Tarapada Dey, Rameshbhai V. Prajapati v. Deputy Commissioner of Income Tax, Gandhinagar, Smt. Manjulaben C. Tomar v. ITO Ward 12(3), Ahmedabad, CIT vs. S.Chenniappa Mudaliar, Daryapur Shetkari Sahakari Ginning and Pressing Factory v. Assistant Commissioner of Income Tax, Amravati Circle
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUP SINGH
• Assessee Lawyers: R.S. POONIA
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Question of law; Period of limitation; Right to appeal; Time period of passing order; Recovery proceedings
• Section: 11; 54B; 260A

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,’B’ JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI M.A. No. 13/JP/2022 (Arising out of ITA No. 841/JP/2012) fu/kZkj.k o\"kZ@Assessment Years : 2007-08 Shri Tej Ram Sharma L/H Late Shri Chittarmal Sharma Village Sarangpura, Post Thikaria, Tehsil Sanganer, Jaipur cuke Vs. ITO, Ward-7(2), Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BJHPS 1556 C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. R. S. Poonia (CA) jktLo dh vksj ls@ Revenue by : Sh. Anup Singh (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 03/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 05/05/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. The present miscellaneous application filed by the assessee seeks restoration of the appeal filed by the assessee in ITA No. 841/JP/2012 pertaining to the assessment year 2007-08 which was dismissed for want of prosecution vide order 04.11.2016. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 2 2. At the outset of the hearing this MA, the registry has pointed out that the present MA is barred by limitation of 1828 days. The assessee in the petition for condonation of delay contended as under : Hon’ble Sir, The above miscellaneous application has been filed by assessee to recall the ex-parte order passed by Hon’ble ITAT, Jaipur Bench dated 04.11.2016. Further, aassessee is submitting the following facts and submission in respect to the Miscellaneous Application for your kind consideration and for allowing appropriate relief: Brief Facts of the Case: 1. Appellant is an agriculturist and having not regular taxable income. This appeal is related to taxation of sale of agriculture land. The question of debate is, whether the agriculture land is within the 8 kms of municipal limit or beyond the 8 kms from the municipal limit. Appellant is not convergent to the taxation laws. Moreover, the case is defend in the capacity of legal heir. 2. Appellant Shri Chitarmal Sharma L/H of Shri Teji Ram Sharma having PAN- BJHPS1556C filed an appeal before your good self against the order dated 31.10.2012 passed by Ld. CIT (Appeals) having appeal No. ITA 841/JP/2012 for A.Y. 2007-08. The case was fixed for hearing on 04.11.2016. 3. That appellant did not receive the notice for hearing of the appeal for the above mentioned hearing date 04.11.2016. 4. That in the said circumstances appellant could not appear before Hon’ble ITAT, Jaipur Bench on 04.11.2016. 5. That Hon’ble ITAT, Jaipur Bench dismissed the appeal in limine on account of not prosecution and without deciding the appeal on merits on the same date (i.e. 04.11.2016). 6. That appellant did not receive the ex-parte order passed by Hon’ble ITAT, Jaipur Bench of dismissing the appeal. 7. When the appellant came to know about the dismissal of ex- parte order, appellant immediately filed the Miscellaneous Application along with affidavit dated 03.06.2022. 8. Further, the Registry has pointed out the defect that the miscellaneous application is time barred by 1828 days. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 3 With Reference to the above Subject the submission of the Case are as follows: A. The Miscellaneous Application is not delay & not barred by limitation as NO time limit prescribed in Rule 24 of ITAT Rules and Second para of Section 254(2) of the I.T. Act, 1961. Whether, the limitation is applicable or not? For decide this question, first we go through the Section 254(2) of the I.T. Act, 1961 and analyze the same. Section 254(2):- “The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub- section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the 2 Assessing] Officer: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this. sub- section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard.” while analyzing Section 254 of the Act, prior to the amendment of 2016, while considering a different question, has observed that Section 254 (2) of the Act is divided in two parts. In the first part, the ITAT may, at any time, within four years [as stipulated in the erstwhile provision], from the date of order rectify any mistake apparent from the record and amend an order passed by it under sub-section (1). Under the second part of Section 254 (2) of the Act, provision has been made for the amendment of the order passed by the Tribunal under sub-section (1), when the mistake is brought to its notice by the assessee or the assessing officer through an application. The first part of Section 254 (2) of the Act refers to suo moto exercise of the power of rectification by the ITAT whereas the second part refers to rectification and amendment on an application being made by the assessing officer or the assessee pointing out the mistake apparent from the record. As noted above, Section 254(2) of the Act has undergone certain amendments. However, there is no dispute that the provision still retains the distinctive two parts as observed by the Supreme Court in the abovenoted case. We are presently concerned with a scenario under Section 254 (2) of the Act where the assessee has invoked its MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 4 jurisdiction seeking rectification / amendment of the order passed by the ITAT. In this situation, the assessee has claimed that it did not have the knowledge of the ex-parte order without decided on merits passed by the ITAT on 04.11.2016. There is nowhere mention, when the appellant will apply for rectification or amendment of the order passed by the ITAT. The force of our argument comes from proviso of Rule 24 of ITAT Rules and Rule 35 and Section 254(3). For deciding this, it is necessary to consider the provisions contained under Section 254(3), Rule 24 & Rule 35, which are as follows: Rule 24:- \"Hearing of appeal ex parte for default by the appellant. Where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent Provided that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restoring the appeal.\" Section 254(3):“The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner or Commissioner.” Rule 35: Order to be communicated to parties. “The tribunal shall, after the order is signed, cause it to be communicated to the assessee and to the commissioner.” Here in our case, the order is not communicated as per Section 254(3) & Rule 35. So, in the said circumstances the ITAT has to recall the ex- parte order passed without deciding on the merit, even after filing the MA beyond 6 months from the date of order. Reliance is placed on the following judgments:- 1. Om Prakash Sangwan v. ITO, Ward 33(4), New Delhi [2018] 94 taxmann.com 394 (Delhi):-“Rule 24 of the Income Tax Appellate Tribunal's Rules and the other provisions of both the Income Tax Act and Rules indicate that the ITAT has to decide the appeals or matters before it on the merits. In these circumstances, the ITAT's failure to do so, implies that it exceeded its jurisdiction and instead of deciding on MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 5 the merits, rejected the appeal merely for non-prosecution. In the given circumstances and keeping in view the fact that Rule 25 does not stipulate any period of limitation within which the aggrieved party can approach the Tribunal, it is open to the appellant to approach the Tribunal with a suitable application for restoration of the appeals; in such event, the appeals could be considered on their merits and decided in accordance with law after hearing both the parties, provided, the application is presented before the ITAT within thirty days from today.” 2. M/s. Maa Tara Agro Industries v. ITO, Ward 4, Murshidabad, MA No. 179/Kol/2018 (Kolkata Tribunal):-“I have heard the arguments of both the sides and also perused the relevant material available on record. At the outset, it is noticed that this miscellaneous application seeking recall of the ex-parte order of the Tribunal dated July 12, 2017 has been filed by the assessee on 25.09.2018 and the same having been filed by the assessee after 237 days from the period of 6 months from the end of the month in which the corresponding order was passed by the Tribunal, there is a delay of 237 days in filing the same in terms of section 254(2) as pointed out by the registry. After considering the submissions of both the sides on this aspect of delay, I find that the same is squarely covered in favour of the assessee by the decision of Hon’ble Delhi High Court in the case of OM Prakash Sangwan vs ITO (2018) 94 taxmann.com 394 (Delhi) wherein it was held that rule 24 of the Income Tax Appellate Tribunal’s Rules and the other provisions of both the Income Tax Act and the Rules indicate that the ITAT has to decide the appeals or matters before it on merits and its failure to do so implies that it exceeded its jurisdiction and instead of deciding on the merits, rejected the appeal merely for non- prosecution. It was held that since rule 24 does not stipulate any period of limitation within which the party aggrieved by ex-parte order can approach the Tribunal, it is open to the applicant to approach the Tribunal with the suitable application for restoration of the appeals and the time period stipulated in section 254(2) of the Act is not applicable. Following this decision of Hon’ble Delhi High Court in the case of OM Prakash Sangwan, I hold that this application filed by the assessee for recall of the ex-parte order and restoration of its appeal is not barred by limitation.” B. The Miscellaneous Application is not delay & not barred by limitation as limitation starts from knowledge/communication of order. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 6 Section 254(3):“The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner orCommissioner.” Rule 35: Order to be communicated to parties. “The tribunal shall, after the order is signed, cause it to be communicated to the assessee and to the commissioner.” From the above noted provisions, it emerges that the Section and the Rule mandates the communication of the order to the parties. Thus, the date of communication or knowledge, actual or constructive, of the orders sought to be rectified or amended under Section 254(2) of the Act becomes critical and determinative for the commencement of the period of limitation. Because there is right of apply for restoration of ex-parte order, there must be remedy. But, if the order passed against the appellant and left without service to the appellant, then the appellant will remedy less. Hence, the phrase, “from the date of the order” construed from the date of communication of the order. In our case the date of communication of order is 01.06.2022. Hence, the limitation starts from 01.06.2022. Reliance is placed on the following judgments:- 1. Raja Harish Chandra Raj Singh v. Dy. Land Acquisition Officer [AIR 1961 SC 1500 : (1962) 1 SCR 676] . “Section 18 of the Land Acquisition Act, 1894 contemplates an application seeking reference to the court being filed within six months from the date of the Collector's award. It was held that \"the date of the award\" cannot be determined solely by reference to the time when the award is signed by the Collector or delivered by him in his office. It must involve the consideration of the question as to when it was known to the party concerned either actually or constructively. If that be the true position, then placing a literal and mechanical construction on the words \"the date of the award\" occurring in the relevant section would not be appropriate. It is fair and just that a decision is communicated to the party whose rights will ultimately be affected or who will be affected by the decision. The knowledge, either actual or constructive, of the party affected by such a decision, is an essential element which must be satisfied before the decision can be brought into force. Thus construed, the making of the award cannot consist merely of the physical act of writing an award or signing it or even filing it in the office of the Collector; it must involve the communication of the said MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 7 award to the party concerned either actually or constructively. A literal or mechanical way of construing the words \"from the date of the Collector's award\" was held to be unreasonable. The Court assigned a practical meaning to the expression by holding it as meaning the date when the award is either communicated to the party or is known by him either actually or constructively. Based on the above observations, the Apex Court held that the order of the Collector should be deemed to be made on the date on which it was communicated to the affected party and that the objections to the award (i.e. the findings in the order) may be filed within six months from the date of communication of the order.” 2. In case of Raja Harish Chandra Raj Singh’s case (supra) by two- Judges Bench of the Supreme Court was affirmed by a three- Judges Bench of this Court in State of Punjab Vs. Qaisar Jehan Begum & Anr., (1964) 1 SCR 971. The Apex Court, bettered its earlier decisions by taking one step further by adding that- “the knowledge of the award does not mean a mere knowledge of the fact that an award has been made; the knowledge must relate to the essential contents of the award.” 3. Madan Lal vs. State of U.P. ( 1975 AIR 2085)A similar issue again before the Ho’ble Supreme Court in this case, in terms of appeal provisions in section 17 of the Indian Forest Act, 1927. Here, the prescription in the section was that the appeal was required to be filed with period of three months from the date of the order. Here also, the issue cropped that what should be the fate of the appellant, who had filed the appeal – not within the period of three months from the date of the order, but rather – when he came to know of the order passed against him. The Supreme Court held as under – “• The Act, we are concerned with, does not state what would happen if the Forest Settlement Officer made an order under sec. 11 without notice to the parties and in their absence. In such a case, if the aggrieved party came to know of the order after the expiry of the time prescribed for presenting an appeal from the order, would the remedy be lost for no fault of his ? It would be absurd to think so. • It is a fundamental principle of justice that a party whose rights are affected by an order must have notice of it. This principle is embodied in Order 20, Rule 1 of the Code of Civil Procedure; though the Forest Settlement Officer adjudicating on the claims under the Act is not a court, yet the principle which is really a principle of fair play and is MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 8 applicable to all tribunals performing judicial or quasi- judicial functions must also apply to him.” 4. In a subsequent elaborate judgment, the Hon’ble Supreme Court in the case of D. Saibaba vs. Bar Council of India (2003) 6 SCC 186- while interpreting the expression \"sixty days from the date of the order\" used in appellate provisions of section 48AA of the Advocates Act, 1961, observed as under:- • “So far as the commencement of period of limitation for filing the review petition is concerned, we are clearly of the opinion that the expression ‘the date of that order’ as occurring in Section 48AA has to be construed as meaning the date of communication or knowledge of the order to the review-petitioner. Where the law provides a remedy to a person, the provision has to be so construed in case of ambiguity as to make the availing of the remedy practical and the exercise of power conferred on the authority meaningful and effective. A construction which would render the provision nugatory ought to be avoided. 5. Allahabad High Court in the case of Vijay Kumar Ruia vs. CIT (2011) 334 ITR 38 (Allahabad). The decision concerned an appeal preferred by the assessee under Rule 86 of recovery proceedings in Schedule II of the Income Tax Act, 1961. The rule prescribed that the appeal must be preferred by the assessee within 30 days of the order passed by the Tax Recovery Officer. The question before the High Court was whether words “date of the order” in Rule 86 should be construed as “date of service or communication of the order” to the assessee ? The Allahabad High Court held as under – • “The second point of determination is as to whether the limitation for filing the appeal would run from the actual date of the order or from the date of service of the order and, consequently as to whether the appeal is barred by limitation. There is no dispute to the fact that the order confirming the sale was passed on 25-4-1988 and the sale certificate was also issued on the same day. The appeal was presented under rule 86 on 19-9-1988. The limitation for filing the appeal under rule 86(2) is 30 days ‘from the date of the order’. Thus, the appeal apparently appears to be beyond time by 117 days. However, the argument is that the limitation for filing the appeal would start running from the date when the order was served and the date of service of the order would be recognised as the date of the order. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 9 • Generally speaking, judicial and quasi-judicial orders are required to be passed in the presence of the parties or their representatives and where parties or their representatives are not present, normally the orders are communicated, especially where the order is appealable or revisable so as to enable the party to avail of the remedy so provided. Therefore, communication and knowledge of the order passed is necessary and in consonance with the principles of fair play. If the party aggrieved is not made aware of the order it cannot be expected to take recourse to the remedy available against it. Therefore, the fundamental principle is that the party whose rights are affected by any order must have the knowledge of the order. • Thus, it can be said that for the purposes of calculating limitation the expression ‘from the date of the order’, is to be construed to mean ‘the date of communication or knowledge of the order’. In the instant case, the date of knowledge of the order, according to the petitioner is 18-8- 1988 and the date of actual service and communication undisputedly happens to be 29-8-1988. The appeal was preferred on 19-9-1988. On 18-9-1988 there was a holiday. Thus, the appeal was within limitation both from the date of knowledge of the order and its service. In this view of the matter, the appellate authority manifestly erred in law in dismissing the appeal as barred by time.” 6. The decision of the Bombay High Court in the case of Petlad Bulakihidas Mills Co. Ltd vs. Raj Singh (1959) 37 ITR 284 (Bom),where the High Court was concerned with the revision proceedings u s 33A (2) of the Income Tax Act, 1922 (analogous to the present section 264 of the Income Tax Act, 1961). The requirement of the section 33A (2), was that an application for revision to the Commissioner must be preferred by the assessee within one year from date of the order of the AAC (Appellate Assistant Commissioner). The question before the High Court was whether “the date of communication of the order” by the AAC to the assessee should be taken as “the date of the order” of the AAC for the purposes of section 33A (2) – more particularly from the point of view that if the order of the AAC is belatedly communicated to the assesse, then the period of limitation available to him to file the revision application would be unfairly curtailed? The Bombay High Court ruled as under – • “If the word ‘order’ used in the expression ‘from the date of the order’ means a unilateral arriving at a decision by the AAC – without the person affected having any knowledge of that decision, then undoubtedly limitation would begin to run from the date when the AAC MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 10 chosen to pass the order. In this view of the case, the AAC may make the order, put it in a drawer, forget about it, and if a year has passed after it the right of the assessee to go in revision would be barred. Now that seems to be an entirely untenable contention. • If the Legislature gave the right of revision to the assesse under section 33A of the 1922 Act, it was an effective right and if the Legislature provided a period of limitation that period must equally be an effective period. “Effective\" means that the whole period must be permitted to the person affected by the order within which he can prefer the application for revision. The assessee should know that he has a year’s time within which he has to make up his mind whether he should apply for revision or not. • If the revenues contention were to be accepted, one would be driven to this extraordinary conclusion that the period of limitation provided by the Legislature could be cut down by the action of the AAC. The AAC could at his sweet will determine what the period of limitation was. He need not promulgate the order for a month, two months, or six months, and the period of limitation would depend upon when he chose to intimate to the party affected the nature of his order. Surely that could not have been the intention of the Legislature. • Therefore, the expression \"order\" means an order of which a party affected has actual or constructive notice. The right of appeal is given to an assessee against the order, and that right of appeal can only be effectively exercised if the party affected has knowledge of that order. • It is not to suggest that the knowledge must be, in every case, actual knowledge. It may be constructive knowledge. The AAC may announce that he is going to pass this order on a particular date. The assessee may not choose to turn up on that date. In such a case the assessee cannot contend that he had no knowledge of that order, because he could have had knowledge if he was present on the date announced for publication of the order. But if the assessee has neither actual nor constructive knowledge, it cannot possibly be suggested that there is an order within the meaning of section 33A(2) of the 1922 Act against which the assessee could possibly have appealed.” The High Court found that if the limitation of one year for filing the revision application was reckoned from the date on which assessee had knowledge of the order of the AAC and not from the date on which the order was passed. It accordingly held that the Commissioner was in error in coming to the conclusion that the application for revision of the petitioner was barred by limitation and it was therefore the MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 11 statutory duty of the Commissioner to hear his application. The appeal was thus allowed in the assessee’s favour. 7. Delhi High Court in case of Golden Times Services Private Limited v. DCIT W.P. (C) 402/2020:- “Pertinently, adjudication on the merits of the case by the ITAT is essential for this Court to hear an appeal and the ITAT could not have dismissed the same solely on account of non-appearance of a party. As a result, as of today, the petitioner company is faced with the situation where it cannot exercise its remedy of filing the statutory appeal under Section 260A of the Act, since order dated 18.10. 2016, dismissing the appeal of the appellant, does not adjudicate on the merits of the case. For the assessee to file an appeal under the said provision before this Court, it is required to satisfy that the case involves a substantial question of law. As the order is not touching upon the merits of the case, it deprives this Court to evaluate, if any, substantial question of law under Section 260A of the Act arises on merits, thereby impinging upon assessee's right to get the issue decided by the final fact finding authority. Thus, the approach adopted by the ITAT in dismissing the application for recall of an order, cannot be countenanced, particularly, since Rule 24 of the ITAT Rules, extracted hereinabove mandates the ITAT to decide the appeal on merits. In fact this approach has rendered the liberty granted in the order dated 18th October, 2016 as nugatory. The sufficient cause for non-appearance of the petitioner company at the time of disposal of the appeal, as provided in the proviso to Rule 24 of the ITAT Rules has also lost its meaning because of the approach adopted by the ITAT, especially, when there is no limitation provided in Rule 24 of the ITAT Rules. For the foregoing reasons, the course adopted by the ITAT at the first instance, by dismissing the appeal for non-prosecution, and then compounding the same by refusing to entertain the application for recall of the order, cannot be sustained. We, therefore have no hesitation in quashing the impugned order. Accordingly, the present petition is allowed. The order dated 30.08.2019 is quashed and the matter is remanded back to the ITAT with a direction that they shall hear and dispose of ITA No. 6739/De1/2014 on merits. The parties shall now appear before the ITAT on 05.02.2020. The registry is directed to send a copy of this order to the ITAT.” 8. M/s. Techknoweledgy Interactive Parteners Pvt. Ltd. v. ITO, Ward 8(3)(3), Mumbai, MA No. 69/Mum/2021 (ITAT Mumbai):- “It is MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 12 thus clear that in order to make the scheme of section 254(2) workable and to ensure that the limitation period for filing of the appeal is to be computed in a manner in harmony with the law laid down by the Hon’ble High Court above, the limitation period is to be counted from the date of service of order and not the date of the order. No contrary judicial precedent has been brought to our notice. We are humbly bow to the wisdom of the Hon’ble High Court above. In this view of the matter and having regard to the fact there is no evidence of service of order and that there is no reason to dispute or doubt the statement made by the assessee including on the affidavit, we are of considered view that the plea of the DR deserves to be rejected and the Miscellaneous Application deserves to decided on merits. We have also noticed that there is no adjudication on merits in the related order of the tribunal. The Hon’ble High Court above had time and again held that whether the assessee or his representative appears or not, the Tribunal is duty bound to decide the matter on merits. In any case, given the fact that admittedly no notice of hearing was served on the assessee, as the related notice had come back unserved and no efforts were made to serve the same to the ld. DR of the Income Tax Department either. In view of the above discussions, and taking into account the peculiar facts of this case, we deem it fit and proper to recall the impugned order dated 30.03.2010. The Registry is directed to fix the matter for hearing in the month of October, 2021. We may also add that since the original record before the Tribunal appears to have been weeded out, it is a case in which the file has to be reconstructed. The registry is directed to initiate the process of reconstruction of the appeal file, so that the matter can be taken upon for hearing in October, 2021. Learned counsel of the assessee as also the learned Departmental Representative are directed to fully co- operate in reconstruction of the file by submitting the copies of the relevant documents from their records. With these observations, the Miscellaneous Application filed by the assessee is allowed.” 9. M/s. Getwell Health & Education Samiti, Sikar v. CIT(E), Jaipur, MA No. 22/JP/2018 (ITAT, Jaipur Bench):- In this case the bench held that “the ex-parte order passed by the Co-ordinate Bench dated 02.03.2017 is hereby recalled and Registry is directed to fix the matter to hear the arguments on merits on 02.05.2018. In the result, miscellaneous application of the assessee is allowed with above directions.” MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 13 C. That without deciding the appeal on merits, deprive the appellant for appeal in High Court. As per Section 260A of the I.T. Act, appellant can only approach the Jurisdictional High Court only when there is substantial question of law and without deciding the case on merits, assessee cannot approach to High Court. So, in these circumstances the case needs to be decided on merits. Reliance is placed on the Judgment of Delhi High Court in case of Golden Times Services Private Limited v. DCIT W.P. (C) 402/2020:- Pertinently, adjudication on the merits of the case by the ITAT is essential for this Court to hear an appeal and the ITAT could not have dismissed the same solely on account of non-appearance of a party. As a result, as of today, the petitioner company is faced with the situation where it cannot exercise its remedy of filing the statutory appeal under Section 260A of the Act, since order dated 18.10.2016, dismissing the appeal of the appellant, does not adjudicate on the merits of the case. For the assessee to file an appeal under the said provision before this Court, it is required to satisfy that the case involves a substantial question of law. As the order is not touching upon the merits of the case, it deprives this Court to evaluate, if any, substantial question of law under Section 260A of the Act arises on merits, thereby impinging upon assessee's right to get the issue decided by the final fact finding authority. Thus, the approach adopted by the ITAT in dismissing the application for recall of an order, cannot be countenanced, particularly, since Rule 24 of the ITAT Rules, extracted hereinabove mandates the ITAT to decide the appeal on merits. In fact this approach has rendered the liberty granted in the order dated 18th October, 2016 as nugatory. D. The Law does not expect to fulfill impossible condition. In this it is submitted that ex-parte order was passed by Hon’ble Bench without the knowledge of the appellant except its author. The ex-parte order maybe kept in the file and consigned to the record room or the file may lie unattended, unwittingly or by carelessness. In the said circumstances the remedy against the order would be lost by limitation and appellant who is aggrieved or affected does not even know what order has been passed. Such an interpretation cannot be countenanced. Reliance is placed on the following judgments:- In Raj Kumar Dey v. Tarapada Dey [(1987) 4 SCC 398] “this Court pressed into service two legal maxims guiding and assisting the court while resolving an issue as to calculation of the period of limitation MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 14 prescribed, namely, (i) the law does not compel a man to do that which he could not possibly perform, and (ii) an act of the court shall prejudice no man. These principles support the view taken by us hereinabove. Any view to the contrary would lead to an absurdity and anomaly. An order may be passed without the knowledge of anyone except its author, maybe kept in the file and consigned to the record room or the file may lie unattended, unwittingly or by carelessness. In either case, the remedy against the order would be lost by limitation though the person aggrieved or affected does not even know what order has been passed. Such an interpretation cannot be countenanced. How can a person concerned or a person aggrieved be expected to exercise the right of review conferred by the provision unless the order is communicated to or is known to him either actually or constructively? The words \"the date of that order\", therefore, mean and must be construed as meaning the date of communication or knowledge, actual or constructive, of the order sought to be reviewed.\" E. The case of Multi Plan India Ltd. 38 ITD 320 (Del) and Estate of Late Tukojirao Holkar vs. CWT: 223 ITR 480 (M.P) referred by Hon’ble Bench while passing ex-parte order dated 04.11.2016 is not applicable in our case. Reliance is placed on the following judgments:- Delhi High Court in case of Golden Times Services Private Limited v. DCIT W.P. (C) 402/2020:-“The ITAT has chosen to rely upon its own decision in Commissioner of Income-Tax vs. Multi Plan India (P) Ltd. 38 ITD 320 (Del) and Estate of Late Tukojirao Holkar vs. CWT: 223 ITR 480 (M.P), which is completely misplaced. The ITAT has misread the provision of law and has erroneously dismissed the application for recall. It was necessary for the ITAT to exercise its jurisdiction and afford an opportunity of rehearing the appeal that had been dismissed in the absence of the appeal. Even otherwise, we are of the view that it was the duty and obligation of the ITAT to dispose of the appeal on merits after giving both the parties an opportunity of being heard. The ITAT should have been conscious of the fact that the appellant was not afforded the opportunity to argue the case on merits and for this reason it had given the liberty to apply afresh, while dismissing the appeal for non-prosecution. There was thus no cogent reason for the tribunal not to entertain the application for recall. The ITAT has ignored the decision of the Supreme Court in CIT vs. S.Chenniappa Mudaliar (supra) in the correct perspective”. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 15 F. Without prejudice to the above, even if there is delay. Then, the non service of order is the good, sufficient & reasonable cause to Condon the delay. For this contention assessee is relying on following judgments:- Rameshbhai V. Prajapati v. Deputy Commissioner of Income Tax, Gandhinagar [2021] 127 taxmann.com 674 (Ahmedabad- Tribunal):Section 254 of the Income-tax Act, 1961, read with rule 24of the Income-tax (Appellate Tribunal) Rules, 1963 -Appellate Tribunal - Powers of (Condonation of delay) -Appeal of assessee was dismissed vide ITAT order as noneappeared on behalf of assessee on date of hearing -Assessee had explained reason for not filing MiscellaneousApplication within prescribed time supported by anaffidavit and copies of other documents/details – Assesseehad also pointed out that previous tax consultant had notattended tax matter satisfactorily and new tax consultanthad obtained various documents, and that thesecircumstances and his ill health caused delay in filing thisappeal against ex parte order which was passed on accountof non- prosecution. - After taking into consideration factsnarrated by assessee supported by an affidavit/documents,it appeared that there was reasonable cause for nonappearanceand delay in filing Miscellaneous Application -Whether therefore, keeping in view of Rule 24 of Incometax(Appellate Tribunal, 1963), delay in filingMiscellaneous Application was to be condoned - Held, yes. Smt. Manjulaben C. Tomar v.ITO Ward 12(3), Ahmedabad (M.A. No. 238/Ahd/2019) ITAT AHMEDABAD: “In view of the above, we find that firstly there is no delay in terms of Rule 24 and 25 of the Income Tax (Appellate Tribunal) Rules,1963 in seeking to recall the exparte order passed in the impugned appeal and even if so held the assessee has adduced sufficient cause for the same, being the mistake of his counsel who failed to take note of the amendment in law, brought about a few months prior to the passing of the order by the Ld.CIT(A) ,restricting the time period for filing of rectification applications before us from four years to six months..And keeping in mind the small background of the assessee and the huge additions made to his income, punishing him in the shape of tax liability by not recalling the earlier order dismissing his appeal is highly disproportionate to the negligence of the assessee in the delay in filing the present application. And therefore taking a sympathetic view we deem it appropriate to even otherwise condone the delay. Having held so and noting that the dismissal of the appeal was not on merits, in terms of Rule 24 of the ITAT Rules, 1963, therefore we MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 16 recall the order passed, restoring the appeal to its original position to be fixed for hearing on 25/05/2022. 8. Application of the assessee is allowed.” G. The Order is void abinitio and no east:-The order passed by Hon’ble ITAT, Jaipur Bench was void ab initio and no east because of the following reasons, which are as follows:- A. Non service of Hearing Notice:- That in the case of assesse the hearing notice dated 04.11.2016 was not served to assessee. In terms of Rule 24, the tribunal is duty bound to decide the appeals on merit after hearing the appellant. For deciding the controversy, it is necessary to consider provision contained in Rule 24 of the Rules of 1963 which is as per under: Rule 24:-“Where on the day fixed for haring or on any other date to which the hearing may be adjourned, the Appellant does not appear in person or through an authorized representative, when the appeal is called on for hearing, the Tribunal may dispose of the Appeal on merits after hearing the respondent; Provided That where an appeal has been disposed of as provided above and the appellant appears afterwards, and satisfies th Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex-parte order and restoring the appeal.” Rule 24 is clear terms mandates that when the appeal is called on for hearing and the appellant does not appear, the Tribunal is required to dispose of the appeal on merits after hearing the respondent. Further, The Hon'ble Supreme Court in S. Chenniappa Mudaliar (supra)by taking into consideration the provisions of section 33(4) of theIncome-tax Act, 1922 along with rule 24 of the Income-taxAppellate Rules, 1946 as it then stood has held that in an appeal,the Tribunal is required to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done bygiving a decision on the merits on question of fact and law andnot by merely disposing of the appeal on the ground that the party concerned has failed to appear. It was thus held that undersection 33(4) of the Act of 1922, the Tribunal had to dispose ofthe appeal on merits and not by dismissing it by default. The ratioin S. Chenniappa Mudaliar (supra) is reiterated in Balaji Steel RerollingMills (supra) and is being consistently followed by thevarious High Courts. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 17 That taking consideration the language used in Rule 24 of the Rules of 1963 and applying the principles laid down in S. Chenniappa Mudaliar (supra), we have no hesitation to come to the conclusion that the impugned order passed by the Tribunal thereby dismissing the appeals in limine for non-appearance of the appellant holding that the assessee is not interested in prosecuting the appeals is unsustainable. The Tribunal was duty bound to decide the appeals on merits after hearing the respondent - Revenue as per mandate of rule 24 and in terms of ratio in S. Chenniappa Mudaliar (supra). Moreover, assessee is relying on following judgments:- Bombay High Court in the case of Daryapur Shetkari Sahakari Ginning and Pressing Factory v. Assistant Commissioner of Income Tax, Amravati Circle [2021] 123 taxmann.com 127 (Bombay):-“The substantial question is answered by holding that in view of language used in rule 24, the ITAT was not justified in dismissing the appeals for absence of assessee in limine and it ought to have decided the appeals on merits even if the appellant or his representative was not present when the appeals were taken up for hearing. The impugned order therefore, being contrary to rule 24 of the Rules of 1963 is unsustainable and the same is liable to be quashed and set aside. Hence, the following order. (a) Income Tax Appeals are allowed. (b) Order dated 1-2-2013 passed in ITA Nos. 96/Nag/2010, 97/Nag/2010 and 98/Nag/2010 is set aside. (c) The respective appeals are restored for adjudication on merits before the Income-tax Appellate Tribunal, Nagpur. (d) The parties shall appear before the Tribunal on 7-12- 2020. (e) The appeals shall be decided on their own merits and in accordance with law.” (f) Respective contentions of the parties on merits are keptopen. (g) The parties shall bear their own costs. In the said circumstances it is submitted that Tribunal should consider the main provision as enriched in Rule 24 of the ITAT Rules, which requires the ITAT to dispose of the appeal on merits after hearing the respondent. Rule 24 of the ITAT Rules, as noted above, enjoined the ITAT to decide the appeal on merits. Therefore, dismissal of the appeal without deciding the merits of the case, merely on the ground for non-prosecution, was certainly unwarranted. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 18 B. Order was not served to assessee:-In this connection, it is submitted that the ex-parte order passed vide dated 04.11.2016 was not served to assessee. Section 254, Sub-section(2 and 3) of the I.T. Act, 1962 states that the Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit and shall communicate any such orders to the assessee and to the Commissioner. It is incumbent, therefore, to determine if any such order had been communicated to the assessee or can be said to have been communicated to him in law. Rule 35 of the Rules and Orders relating to Appellate Tribunal also is in the following words: “The Tribunal shall, after the order is signed cause it to be communicated to the assessee and to the Commissioner”. In this connection it is submitted that assessee did not receive the ex- parte order passed by Hon’ble ITAT, Jaipur Bench. Further, when assessee came to know about the dismissal of ex-parte order and received certified copy of ex-parte order on 01.06.2022 Moreover, assessee filed Miscellaneous application for restoring this said appeal on 03.06.2022 So, in the given circumstances and without communication of any such order to assessee, this miscellaneous application will be treated as within the stipulated time period as per the Act.Kindly allow this Miscellaneous application and restore the income tax appeal (having appeal No. ITA/841/2012). So, that substantial justice can be delivered. The assessee prays accordingly.” 3. During the course of hearing, the ld. DR not objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice as delay is of three days only. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 19 4. We have heard the contention of the parties and perused the materials available on record. The prayer by the assessee for condonation of delay of three days has merit and we concur with the submission of the assessee. Thus the delay of three days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause. 5. At this juncture before proceeding further in the matter it would be appropriate to list the chronology of events in this case as the assessee has preferred his third MA which is arising out of an order passed by the co-ordinate bench on 04.11.2016. The event chart that has been filed by the assessee is reproduced here in below; S. No. Particular Page No. 1 Order of Appeal dismissed dated 15.06.2015 1-3 2 Copy of 1st MA dated 25.05.2016 4-6 3 Copy of affidavit with first MA 7-8 4 Adjournment request of first MA 9 5 Copy of order of recall first MA dated 23.09.2016 10-12 6 Copy of order sheet of First MA 13-14 7 Request dated 19.04.2022 for inspection 15 8 Request for certified copy filed on 24.05.2022 16 9 Copy of order sheet of appeal No. 841/JP/2012 17-20 10 Certificate of Tehsildar dated 15.12.2008 21 11 Certificate of Jaipur Nagar Nigam dated 19.02.2014 22 MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 20 6. As it is evident that the appeal in ITA no. 841/JP/2012 was disposed off without dealing with the merits of the case and only because the assessee on the date of hearing not appeared and even the assessee has not instructed to ld. AR appear in the appeal so filed by the assessee. Therefore, the bench observed that the assessee is not serious in pursuing appeal which it mentioned was evident by the fact that it did not appear on the dated fixed for hearing. In support of this third MA ld. AR of the assessee submitted justifying as to why there is a reason to prefer this third MA. The content of the MA and the submission in this regards is reproduced here in below : “Hon’ble Members, Most respectfully, the appellant submits the following facts in respect to the Miscellaneous Application for your kind consideration and for granting the relief that is fit and appropriate: 1. Appellant Shri Chhitarmal Sharma L/H of Shri Teji Ram Sharma having PAN- BJHPS1556C filed an appeal before your good self against the order passed by Ld. CIT (Appeals) having appeal No. ITA 841/JP/2012 for A.Y. 2007-08 on 31.10.2012. 2. (i). The Hon’ble ITAT Bench decided this appeal ex-parte on 15.06.2015. (ii). Then, the appellant file M.A. on 25.06.2016 for recall the ex-parte order dated 15.06.2015. (iii). The M.A. number 127/JP/2016 arised out of appeal No. 841/JP/2012 was fixed for hearing on 23.09.2016. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 21 (iv). On 23.09.2016, the appellant filed an adjournment application & a person from his A/R’s office named Kishanlal appeared for adjournment on the very same date of hearing. (v). But, the Hon’ble Bench did not allowed the adjournment, but noticed the mistake in ex-parte order dated 15.06.2015, that no notice of hearing was served upon appellant. So, the Hon’ble Bench passed an order on 23.09.2016 on the M.A. for recall the ex-pate order dated 15.06.2015 & direct the registry to fix the case for fresh hearing. 3. Again, Hon’ble Income Tax Appellate Tribunal, Jaipur Bench dismissed the appeal filed by appellant vide an ex-parte order dated 04.11.2016. 4. The appellant came to knowledge about the ex-parte order on 18.04.2022 by telephonic information from an Income Tax official and thereafter obtained the certified copy of this ex-parte order on 01.06.2022 and filed this M.A. for restoring the appeal No. 841/JP/2012. 5. That the reason stated by Hon’ble ITAT Jaipur Bench in the order passed dated 04.11.2016 was that the appellant or his representative did not attend the hearing in spite of the date of hearing being noted. The Hon’ble Tribunal observed that by this fact it is apparent that appellant is not very much interested in hearing of his case. 6. Further, appellant submits that he did not receive the ex-parte order passed by Hon’ble ITAT, Jaipur Bench dated 04.11.2016. 7. That appellant’s case was fixed for hearing on 04.11.2016 and on the same date the appeal was dismissed by Hon’ble ITAT, Jaipur Bench by hearing the case as ex-parte and passed an order vides dated 04.11.2016. Further, it is submitted that appellant had no knowledge about the hearing of the case and moreover, appellant did not received the hearing notice dated 04.11.2016. 8. That on 18th April, 2022 appellant received a call from Income Tax Department regarding recovery of outstanding demand for A.Y. 2007-08 and appellant informed the Income Tax Department official that his appeal is pending before Hon’ble ITAT, Jaipur Bench. Then the Income Tax Official informed the appellant that his appeal was dismissed a long time ago. 9. (i). After this, appellant contacted CA Raghuveer Singh Poonia and authorized him to do inspection of the appeal file. MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 22 (ii). A/R of the appellant applied for inspection of appeal file on 19.04.2022 in Hon’ble ITAT, Jaipur Bench. (iii). A/R of appellant inspected the file of appeal on 23.05.2022. (iv). After inspection of file, appellant get to know that his appeal was dismissed by the Hon’ble ITAT, Jaipur Bench a long time ago. (v). Thereafter, appellant obtained certified copy of order dated 04.11.2016 on 01.06.2022 and filed this Miscellaneous Application to restore the said appeal. (vi). On inspection of order sheet of the case A/R of appellant observed that after 15.06.2015, the next date of hearing was fixed on 04.11.2016 (as per entry No. 9 & 10 of order sheet. Hence no question of noting of date by the appellant arises as mentioned in the opening of paragraph No. 2 of ex-parte order dated 04.11.2016which is also mistake in order. 10. In the above circumstances & facts and in light of Rule 20, 23, 24 & 35 of Appellate Tribunal Rules, 1963 & Section 254(2) of the I.T. Act, 1961, appellant prays to recall the ex-parte order dated 04.11.2016 and restore the appeal. ” 7. In support of the application filed by the assessee, he has filed a paper book containing page number 118. The content of the enclosures attached in this paper book for of the assessee is tabulated here in below : Sr. No. Case Name Court by which order is passed Page No 1 Omprakash Sangawan v. ITO, New Delhi Delhi High Court 1 to 3 2 M/s Maa Tara Agro Industries v. ITO Kolkata, ITAT 4 to 6 3 Raja Harish Chandra Raj singh v. Dy. Land Acquisition Officer Supreme Court 7 to 12 4 State of Punjab v. Qaisar Jehan Begum and others Supreme Court 13 to 16 5 Madan Lal v. State of U.P Supreme Court 17 to 23 MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 23 6 D. Saibaba v. Bar Council of India and others Supreme Court 24 to 32 7 Vijay Kumar Ruia vs. CIT Allahabad High Court 33 to 47 8 Petlab Bulakhidas Mills Co. Ltd., vs. Raj Singh Bombay High Court 48 to 51 9 Golden Times Services Pvt. Ltd. v. DCIT Delhi High Court 52 to 69 10 M/s Techknowledgy Interactive Partners Pvt. Ltd. vs. ITO ITAT, Mumbai 70 to 73 11 Getwell Health & Education Samiti vs. CIT(E), Jaipur ITAT, Jaipur 74 to 76 12 Rajkumar Dey vs. Tarapada Dey Supreme Court 77 to 80 13 Ramesh Bhai Prajapat v. DCIT, Gandhinagar ITAT, Ahmedabad 81 to 93 14 Manjulaben C. Tomar v. ITO Ward 12(3), Ahmedabad ITAT, Ahmedabad 94 to 101 15 CIT vs. Chenniappa Mudaliar Supreme Court 102 to 113 16 Daryapur Shetkari Sahakari Ginning v. ACIT, Amaravati Circle Bombay High Court 114 to 118 8. The ld. AR of the assessee submitted that the present miscellaneous application filed by the assessee. The fact that there is delay of 1828 days in filling the said MA and hold that the tribunal has no jurisdiction / power to condone the delay in filling the MA, thus the belated MA was held as not maintainable and held being barred by the limitation u/s. 254(2) of the Act. The ld. AR of the assessee relying on the rule 24 of the income tax appellate Tribunal rules submitted that this rule requires that where MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 24 none appears for the assessee, the appeal to be disposed of on merits after hearing the respondent and further after having done so, the assessee appears thereafter and satisfy the tribunal that there was a reasonable cause for nonappearance when the appeal was called for hearing. Then the tribunal shall set aside the ex parte order and restore the appeal. Rule 24 of the Income Tax Rules is reproduced herein for clarity: Hearing of appeal ex parte for default by the appellant. 24. Where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent : Provided that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restoring the appeal. 9. Since the present application relates to the ex-party disposal of order, it is not an application seeking rectification in the order passed by the ITAT in terms of section 254(2) of the act, but, merely seeking a recall of the ex- party order in terms of rule 24 of Income tax Appellate Tribunal Rules, 1963 as noted above. The limitation for running removing an application prescribed under section 254(2) of the act therefore, does not apply to the present MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 25 case. This view has been taken by the honourable High Court of Delhi as stated here in above. Moreover, the ld. AR appearing on behalf of the counsel has submitted the assessee is all the time guided by the tax experts and based on the advice so received he has acted in due care and is serious in taking the matter to a logical conclusion. Therefore, even the first application which was disposed merely on the reasons that the same is filed belatedly which is not in violative of provision of section 254(2) of the Act but it is in accordance with the rule 24 of the ITAT rules, the alleged delay in filing the present application for recalling the ex-party order, stating that the assessee being a very small assessee is also dependent on the service of the practitioners of tax laws, he further pointed out that the assessee was a very small assessee in whose case the additions were made without considering the merits of the case and the profit was estimated arbitrary and deposit made in the bank account was considered as unexplained money, against the meagre return of income of Rs, 97,990/- which was assessed at Rs. 6,09,540/-and the assessee will caused prejudice of not having been heard on merits of the case if he was not given an opportunity of being heard, that too on account of the MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 26 fault of his counsel. He therefore prayed for recalling the ex-party order restoring the original appeal, giving the assessee opportunity to argue the case in the interest of justice. 10. The ld DR is heard who has relied on the findings of the lower authorities. 11. In the light of the discussion so made we find that firstly there was delay of 1828 days which is not delay in terms of rule 24 and rule 25 of the income tax appellate Tribunal rules, seeking to recall ex-party order passed in the impugned appeal, and even if so held, the assessee has adduced sufficient, cause for the same, being the mistake of his counsel. Keeping in mind the small background of the assessee and the decision is made to his return of income, pushing him in the shape of tax liability by not recalling the earlier orders. Dismissing his appeal is highly disproportionate to the negligence of the assessee in the delay in filing the present application. And therefore, taking a sympathetic view of the matter we deem it fit and appropriate even otherwise to condone the delay based on the decision of the Delhi HC in the case of Cement Corporation of India Vs. ACIT [ 149 taxmann.com 192(Delhi) ] MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 27 wherein the high court held that \"Where assessee claimed that there was delay in filing miscellaneous application to recall ex parte order of Tribunal on account of concerned persons in department being temporarily transferred and some persons retiring during relevant period, Tribunal could not have dismissed such miscellaneous application on ground of limitation and thus, appeal was to be heard on merits\". 12. Cosidering the overall facts and circumstances as discussed the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing an opportunity of being heard to the assessee. Based on this observation, the Miscellaneous Application filed by the assessee is allowed. 13. Now after recalling the order the case needs to be decided on merits afresh. 14. On the merits of the case the ld. AR of the assessee submitted that the matter relates to the assessment year 2006-07 and that of the deceased though legal heirs. The legal heirs are of MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 28 the considered view that dispute relates to agricultural land sale and transaction were through banking account as is evident from the assessment order and the assessee has claimed the deduction u/s. 54B of the Act which was not granted the deceased was fastened with the substantial liability on the legal heris which are in the nature of legally allowable and therefore, the matter is required to be send back to the ld. AO to decide a fresh. 15. Per contra ld. DR relied upon the orders of the lower authority but at the same time did not oppose to the prayer of the assessee in restoring the matter back to the file of the ld. AO. 16. Heard the parties perused the record. The bench noted that in this case the assessee has filed her return of income declaring income of Rs. 1,57,117/- along with that she has also disclosed agricultural income of Rs. 55,150/-. The ld. AO was having the information that the assessee has deposited a sum of Rs. 2,99,51,000/- in the Central Bank of India bank account, Bad-ke- Balaji Branch, Jaipur. Out of that amount she has issued a cheque of Rs. 1,50,00,000/- to his son and Rs. 99,50,000/- was withdrawn MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 29 from the bank. The assessee has also in that assessment claimed to have invested in purchase of agricultural land for Rs. 99,00,010/-, 73,87,500/- and Rs 40,00,000/- invested in the residential house. Those deduction were not allowed by the ld. AO. When the matter carried before the ld. CIT(A) the same was not considered on the reasons that the assessee could not support the claim of deduction. The bench noted that in this case against the returned income of 1,57,117/- additions was made for an amount of Rs. 2,91,86,455/- without allowing the deduction of investment made by the assessee in agricultural land and house. As stated by ld. AR of the assessee that case of the assessee was not argued properly and therefore as prayed we considered his prayer to restore the matter back to the file of the ld. AO as the lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee in that perspective of the matter we considered that prayer of the assessee. Thus, considering overall facts of the case and peculiar facts of the case, we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the matter and charge the correct income in MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 30 hands of the assessee if so to be taxed in accordance with law after affording due opportunity to the assessee’s legal representative. 17. Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law. In the light of the above discussion, we allowed the Miscellaneous Application filed by the assessee and after recalling the said ex-party order of ITAT we consider the appeal of the assessee as allowed based on the discussion so recorded here in above. In the result, Miscellaneous Application as well as appeal of the assessee is allowed for statistical purposes. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member MA No. 13/JP/2022 Late Shri Tej Ram Sharma L/H Chittarmal Sharma vs. ITO 31 Tk;iqj@Jaipur fnukad@Dated:- 05/05/2025 *Ganesh Kumar, PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Late Shri Tej Ram Sharma L/H Chittarmal Sharma, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward-7(2), Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File {MA No. 13/JP/2022} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar "