M/S. AJANTA CONSTRUCTION COMPANY,PATNA V. DY. CIT, PATNA

MA 8/PAT/2024

AI Insights

The case involves M/s. Ajanta Construction Company, which had its appeal dismissed in limine by the ITAT on 12.04.2017 due to non-appearance and procedural issues. The company later filed a Miscellaneous Application to recall the order, citing lack of communication and an apparent mistake in the case number mentioned in the order. The Tribunal, after considering the submissions and the peculiar facts of the case, decided to recall the ex parte order and restore the appeal, emphasizing the need to adjudicate on the merits and provide a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46696 (ITAT-PATNA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Other Referred Cases: CIT Vs. Multiplan India Pvt. Ltd., Commissioner of Income-tax, Kolkata-IV v. Alcove Industries Ltd., Golden Times Services (P.) Ltd. v. Deputy Commissioner of Income-tax
• Laws Referred To: Income-tax (Appellate Tribunal) Rules, 1963, Section 254(2) of the Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Question of law; Period of limitation; Recovery proceedings
• Section: 254(2); 113

Judgement Text

"आयकर अपीलीय अधिकरण पटना पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH AT KOLKATA [वर्चुअल कोटु] [Virtual Court] श्री प्रदीप क चमार र्ौबे, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company Vs. DCIT, Circle-4, Patna (Appellant) (Respondent) PAN: AAFFA9559H Appearances: Assessee represented by : Dinesh Choudhary, Adv. Department represented by : Ashwani Kr. Singal, JCIT. Date of concluding the hearing : January 17th, 2025 Date of pronouncing the order : April 11th, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: The appeal in this case was heard and the order dated 12.04.2017 was passed and the appeal was dismissed in limine by observing as under: “3. Considering the facts and the provisions of Rule 19(2) of the ITAT Rules as was considered in the case of CIT Vs. Multiplan India Pvt. Ltd., 38 ITD 320, we treat the appeal as un-admitted. We further add that in case the assessee is serious in pursuing the appeal filed, so assessee would be at Page | 2 M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company. liberty to pray for a recall of this order by moving an appropriate petition, as per law.” 2. The assessee filed a Miscellaneous Application on 21.06.2024 requesting as under: “1. That this application being filed to recall the order dated 12.04.2017 by which the Hon'ble Tribunal was pleased to dismiss the appeal filed by assessee in limine, with liberty the appellant to pray for a recall of the order dated 12.04.2017 by moving a appropriate petition as per law. 2. That when appellant not received any information regarding his appeal from the Hon'ble ITAT, went to Tribunal on 18.06.2024 to know the position of the appeal. Assessee was informed that his appeal was dismissed in limine. 3. That on the same day i.e. 18.06.2024 assessee applied for certified copy of the same and received certified copy on 19.06.2024. 4. That there is a apparent mistake on the face of order that case No. ITA No. 244/PAT/2012 is mentioned in the place of case no. ITA No. 244/PAT/2013 need correction. 5. That the assessee state that he not received any letter regarding the date of the hearing of the aforesaid appeal fixed on 12.04.2017. So, he could not appeared on that day and case was dismissed in limine with liberty to assessee to pray for recall of this order by moving appropriate petition as per law. 6. That the appellant request your Honour for recalling the order dated 12.04.2017 and for giving an opportunity for hearing of the appeal on merit. Therefore, it is prayed to your honour to restore the appeal in interest of justice.” 3. The registry has mentioned that the MA is time-barred by 85 months and no application for condonation of delay has been filed. In the course of the hearing, it was submitted by the assessee that it was not aware that its appeal in ITA No. 244/Pat/2013 had been dismissed and came to know the same only on 18.06.2024. Further, since the ITA No. which is mentioned in the order of the Tribunal is ITA No. 244/PAT/2012 A.Y. 2009-10 and the order does not have any discussion on the issues raised, therefore, the assessee was under the Page | 3 M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company. impression that its appeal is still pending. It was therefore requested that in the interest of justice, the order of the Tribunal may be recalled and the appeal be heard on merit. 4. Rival submissions were heard and the record and the submissions made have been examined. The Ld. Sr. DR was required to inform whether any complication was made to the assessee regarding the order of the Tribunal and whether any recovery proceedings were taken up after the order of the Tribunal as the assessee was expressing ignorance about passing of the order of the Tribunal. As per the provision of section 254(2), the application for mistake apparent record or to have been moved within 6 month from the date of the order which in the present case, has been filed after a delay of 7 years and 2 months and as per the statute, the limitation is from the date of the order and not from the date on which the order was received. It was informed by the Ld. Sr. DR that as per the report received from the Ld. AO, no communication was made with the assessee after the terminals order was passed and the attachment of the accounts was made only subsequent to the order of the Ld. CIT(A), i.e. Prior to the order of the Tribunal. Subsequently, no communication was made with the city and the recovery was made as the Ld. CIT(A) had confirmed order of the Ld. AO. Although the Tribunal has no power to condone the delay in filing the application for correcting mistakes, however in the peculiar facts of the case, it could not be said that appeal was decided as the appeal number mentioned in the order of the Tribunal is different from that mentioned in Form No. 36 and the assessee is denying any receipts of the order of the Tribunal prior to 19.06.2024 nor the department had any communication in this regard with the assessee. Page | 4 M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company. 3. We have heard the ld. Counsel for the assessee. Rule 24 of the Income-Tax (Appellate Tribunal) Rules, 1963 states as under: 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. 3.1 Further, in Commissioner of Income-tax, Kolkata-IV v. Alcove Industries Ltd. [2016] 65 taxmann.com 311 (Calcutta), it has been held that where the assessee was prevented by sufficient cause from appearing before Tribunal, Tribunal was justified in recalling its ex parte order and rehearing appeal. The relevant extract from the order is as under: 3. Mrs. Anupa Banerjee, learned advocate for the respondent submits that after ex parte order dated 21st February, 2003 was passed, her client had filed a Miscellaneous Petition under Section 254(2) of the Act before the Tribunal praying for recall of the order dated 21st February, 2003 which is not annexed to the Paper Book. Submission is though it has been submitted on behalf of the appellant that the Tribunal has no power to recall the order and to rehear the appeal on merits, however, in view of the judgments of the High Court in ITO v. Murlidhar Sarda [1975] 99 ITR 485 and Khaitan Paper & Industries Ltd. v. CIT [2005] 273 ITR 234/148 Taxman 326 (Cal.), as the settled position of law is the Tribunal has the power to restore and rehear an appeal already disposed of on merits and as in the instant case it is evident from the documents filed that the assessee was prevented by sufficient cause from not appearing before the Tribunal, the Tribunal was justified in recalling the order and rehearing the appeal. Let a copy of the Miscellaneous Petition under section 254(2) of the Act filed before the Tribunal, furnished be kept on record. 4. Admittedly Paper Book filed by the appellant does not contain the Miscellaneous Petition filed by the respondent before the Tribunal for recalling the order dated 21st February, 2003 and the order passed thereon. As it appears that the Tribunal had recalled the order dated 21st February, 2003 Page | 5 M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company. and had proceeded to hear the appeal afresh after giving notice to the parties and had passed the impugned order, in view of the law laid down in Murlidhar Sarda (supra) and in Khaitan Paper & Industries Ltd (supra), the question no.(i) is answered in the negative, against the Revenue and in favour of the assessee. 3.2 As regards the delay in filing the application for amending any mistake apparent from record, it has been held in the case of Golden Times Services (P.) Ltd. v. Deputy Commissioner of Income-tax [2020] 113 taxmann.com 524 (Delhi) that the starting point of limitation provided under section 254(2) has to commence from date of actual receipt of judgment and order passed by Tribunal which is sought to be reviewed. The facts of the case were that the petitioner company filed its return of income for the assessment year 2006-07 on 30-11-2006, declaring a total loss and the said return was assessed at income. The Commissioner (Appeals) granted partial relief by deleting the addition, however, the addition of Rs. 19,00,000 was confirmed. The petitioner-company then challenged the said order before the Tribunal by filing an appeal on 11-12-2014, which was heard on 30-8- 2016 and later dismissed vide order dated 18-10-2016. On recall of the said order, the Tribunal, while noting that no one was present on behalf of the assessee at the time of hearing, proceeded to dispose of the appeal. The Tribunal, thus held that the assessee was presumably not serious in pursuing the appeal and dismissed the same in limine. On writ, the petitioner-company submitted that on 8-2-2018, when an enquiry was made about the status of the appeal, it came to its knowledge that the appeal had been dismissed ex parte for non- prosecution. Thereafter, on 8-3-2018, an application was filed for recall of the order dated 18-10-2016. The petitioner company filed the application giving grounds for non-appearance, with an explanation that the absence was beyond its control. However, to the petitioner Page | 6 M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company. company's dismay, the same was dismissed vide order dated 30-8- 2019, on the ground that the same was barred by limitation under section 254(2). On these facts, it has been held by the Hon'ble Delhi High Court as under: ■ To hold the date of the order to be the relevant date for the purpose of calculating the period of six months envisaged under section 254(2), can lead to several absurd and anomalous situations. An order passed without the knowledge of the aggrieved party, would render the remedy against the order meaningless as the same would be lost by limitation while the person aggrieved would not even know that an order has been passed. Such an interpretation would not advance the cause of justice and would not be the correct approach and, thus, cannot be countenanced. A person who is aggrieved or concerned with an order would legitimately be expected to exercise his rights conferred by the provision and unless the order is communicated or is known to him, either actually or constructively, he would not be in a position to avail such a remedy. The words 'six months from the end of the month in which the order was passed' therefore, cannot be given a narrow and restrictive interpretation. [Para 10] {emphasis supplied} ■ In this situation, the assessee has claimed that it did not have the knowledge of the earlier order passed by the Tribunal on 18-10-2016 and the period of limitation of six months should commence from the date of the receipt of the order. The limitation would begin to run when the affected person has the knowledge of the decision. The date when the order was passed cannot be solely determined by referring to the date when the same was signed by the Tribunal. Further, it is found that under section 254 (3), the law stipulates that the Tribunal shall send a copy of the order passed by it to the assessee and the Principal Commissioner. Further, rule 35 of the Tribunal Rules also requires that the orders are required to be communicated to the parties. [Para 12] ■ From the provisions of section 254(3), 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) becomes critical and determinative for the commencement of the period of limitation. The Tribunal has not applied its mind on this aspect and has been swayed by the literal and mechanical construction of the words 'six months from the end of the month in which the order was passed'. The Tribunal failed to even delve into the question whether the affected party, either actually or constructively, was in knowledge of the order passed by the Tribunal. [Para 13] Page | 7 M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company. ■ The assessee had challenged the ex parte order dated 18-10-2016 and consequently, keeping in view, the aforesaid decisions, the starting point of limitation provided under section 254 (2) has to commence from the date of the actual receipt of the judgment and order passed by the Tribunal which is sought to be the reviewed. [Para 15] ■ Pertinently, adjudication on the merits of the case by the Tribunal is essential for High Court to hear an appeal and the Tribunal could not have dismissed the same solely on account of non-appearance of a party. As a result, the petitioner company is faced with the situation where it cannot exercise its remedy of filing the statutory appeal under section 260A, 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. Thus, the approach adopted by the Tribunal in dismissing the application for recall of an order, cannot be countenanced, particularly, since rule 24 of the ITAT Rules, mandates the Tribunal to decide the appeal on merits. In fact this approach has rendered the liberty granted in the order dated 18-10-2016 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 Tribunal, especially, when there is no limitation provided in rule 24 of the ITAT Rules. The Tribunal has misread the provision of law and has erroneously dismissed the application for recall. It was necessary for the Tribunal to exercise its jurisdiction and afford an opportunity of rehearing the appeal that had been dismissed in the absence of the appeal. Even otherwise, it is the duty and obligation of the Tribunal to dispose of the appeal on merits after giving both the parties an opportunity of being heard. The Tribunal 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. [Para 16] ■ For the foregoing reasons, the course adopted by the Tribunal 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. Therefore, there is no hesitation in quashing the impugned order. Accordingly, the present petition is allowed. [Para 17] 4. Hence, in view of the peculiar facts of the case, the evidence filed and the submissions made before us, and since the facts are identical to the facts of the case of Golden Times Services (P.) Ltd. (supra) and also in view of the judicial pronouncement of the Hon'ble Jurisdictional High Page | 8 M.A. No.: 8/PAT/2024 Arising out of I.T.A. No.: 244/PAT/2013 Assessment Year: 2009-10 M/s. Ajanta Construction Company. Court cited in the preceding para, we are of the view that the assessee had sufficient cause for non-appearance and the application is filed in time and is not delayed if the limitation is counted from the date of receipt of the ex parte order and the ex parte order needs to be set aside and the appeal be restored. The order in I.T.A. No. 1484/KOL/2024 is hereby recalled and the appeal is restored. The Registry may fix the appeal in the normal course of hearing. 5. In the result, the Miscellaneous Application filed by the assessee is allowed. Order pronounced in the open Court on 11th April, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 11.04.2025 Bidhan (P.S.) Copy of the order forwarded to: 1. M/s. Ajanta Construction Company, 175, P.C. Colony, Patna-20. 2. DCIT, Circle-4, Patna. 3. CIT(A)-Dhanbad. 4. CIT- 5. CIT(DR), Patna Bench, Patna. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "