Ms.Sneha Nerli, Belgaum V. Income-Tax Officer, Ward-2(2), Belgaum

MA 101/BANG/2022

AI Insights

This case involves a miscellaneous application by Ms. Sneha Nerli seeking the recall of an ex-parte order from the Income Tax Appellate Tribunal, which had sustained an addition of Rs.10.10 lakhs under section 69A read with section 115BBE of the Income Tax Act. The initial appeal was heard ex-parte as the assessee did not appear, leading to a decision based on the merits presented by the Departmental Representative. The assessee later contended that she was not properly served notice of the hearing due to her travel commitments, which prevented her from appearing or arranging for representation. The Tribunal, considering the circumstances and the evidence of travel provided, decided to recall the ex-parte order and remit the matter back to the AO for a detailed examination of the financial transactions in question.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129958 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 18-08-2022
• Other Referred Cases: Reliance Telecom Ltd. In Civil appeal No.7110/2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69A; 254(2)

Judgement Text

MP No.101/Bang/2022 Ms. Sneha Nerli, Belgaum IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER MP No.101/Bang/2022 ITA No.233/Bang/2022 Assessment Year: 2017-18 Sneha Nerli FFO 3, 4 TH Floor Mahant Residence Sec No.12, Mahantesh Nagar Belgaum 590016 Karnataka PAN NO : AHZPN7345M Vs. ITO Ward-2(2) Belgaum APPELLANT RESPONDENT Appellant by : Smt. Suman Lunkar, A.R. Respondent by : Shri Ganesh R. Gale, Standing Counsel for Department Date of Hearing : 06.01.2023 Date of Pronouncement : 09.01.2023 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This miscellaneous application filed by the assessee seeking the recall of ex-parte order of the Tribunal in ITA No.233/Bang/2022 dated 12.5.2022. On earlier occasion, the assessee came in appeal before this Tribunal with regard to sustaining addition of Rs.10.10 lakhs made u/s 69A r.w.s. 115BBE of the Act. The assessee has not appeared before the Tribunal even though notice has been issued to the assessee fixing the case for hearing on 12.5.2022. Hence, the Tribunal heard the ld. D.R. and disposed the appeal on merits. Now the contention of the ld. A.R. is MP No.101/Bang/2022 Ms. Sneha Nerli, Belgaum Page 2 of 7 that notice of the Tribunal fixing the case for hearing on 12.5.2022 has not been served to the assessee in person. 2. On the other hand, it has been sent through post to Belgaum address, which was received by Smt. Ratna, wife of one watchman Girimalla Bijjanawar. However, the said notice has not been handed over to the assessee since assessee has been travelling. Further, she submitted the travel details of her as follows: Travelling date From To Ticket details 05.04.2022 Belgaum Mumbai Spicejet SG-3745 05.04.2022 Mumbai Chandigarh Indigo 6E-5284 06.05.2022 Chandigarh Delhi Indigo 6E-2193 07.05.2022 Delhi Dubai Indigo 6E-23 2.1 In support of this, the ld. A.R. drew my attention to the relevant air ticket copies, Boarding passes and passport to suggest that she has been travelling in these days and is absent from her residential address given in Form No.36. 3. The ld. D.R. submitted that during this time, the assessee has been in India and not made proper arrangement for appearance before this Tribunal. Hence, the order of the Tribunal need not be recalled. 3.1. Further, the ld. D.R. submitted that in view of the judgement of Hon’ble Supreme Court in the case of Reliance Telecom Ltd. In Civil appeal No.7110/2021 dated 3.12.2021, the Tribunal cannot recall the order for fresh adjudication and drew my attention to the para 3.1 of said judgement which reads as follows: MP No.101/Bang/2022 Ms. Sneha Nerli, Belgaum Page 3 of 7 “3.1 We have considered the order dated 18.11.2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013 as well as the original order passed by the ITAT dated 06.09.2013. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribun0 is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record.” In view of the above, he submitted that the Tribunal may adjudicate the appeal itself instead of recalling the same. 4. I heard the rival submissions and perused the materials available on record. Admittedly, the case has been fixed originally on 9.5.2022. None appeared for assessee. Registered notice has been issued fixing hearing on 12.5.2022. Now the contention of the ld. A.R. is that notice by RPAD fixed case for hearing on 12.5.2022 was received by assessee’s watchman’s wife Smt. Ratna only on 12.5.2022. During this period, she has been travelling as below and not at Belgaum in given address: Travelling date From To Ticket details 05.04.2022 Belgaum Mumbai Spicejet SG-3745 05.04.2022 Mumbai Chandigarh Indigo 6E-5284 06.05.2022 Chandigarh Delhi Indigo 6E-2193 07.05.2022 Delhi Dubai Indigo 6E-23 MP No.101/Bang/2022 Ms. Sneha Nerli, Belgaum Page 4 of 7 4.1 Further, she has not been able to make proper arrangement to appear before this Tribunal by engaging any advocates or Chartered Accountants. In my opinion, the reason advanced by her is bonafide. 5. I carefully gone through the case records. As seen from the above facts, it is clear that the notice for hearing has been issued on 9.5.2022 by RPAD by fixing the case for hearing on 12.05.2022, which is very short time and during this time, she has not been residing at Belgaum and travelling to Mumbai-Chandigarh, which has been proved by travelling details furnished by her. 5.1 The Tribunal has inherent power to rectify a wrong and / or correct error committed by it. In my view, while disposing off assessee’s appeal ex–parte, the Tribunal has committed error which can be rectified under section 254(2) of the Act. As discussed earlier, assessee’s appeal though was heard ex–parte, however, it was decided on merits on the basis of facts and material available on record. Under Rule–24 of the Income Tax (Appellate) Tribunal Rules, 1963, empowers the Tribunal to decide the appeal filed by the appellant ex–parte if the appellant does not appear in person or through an authorised representative when the appeal is called for hearing. However, the Tribunal has to decide the appeal on merit. Of course, the proviso to the said rule carves out an exception by empowering the Tribunal to recall the ex–parte order if the assessee appears afterwards and satisfies the Tribunal that there was sufficient cause for his non–appearance when the appeal was called for hearing. Thus, a reading of section 254(2) of the Act along with rule 24 of the ITAT rules would make it clear that the Tribunal can recall an appeal order under two situations. Firstly, if there is a MP No.101/Bang/2022 Ms. Sneha Nerli, Belgaum Page 5 of 7 mistake apparent on the face of record as per section 254(2) and secondly, if the appeal order is passed ex–parte, the Tribunal can recall it under rule 24 of the ITAT rules if it is satisfied that the non– compliance of the assessee was for sufficient cause. Therefore, the recall of the appeal order is not automatic but bound by certain conditions. In the facts of the present case, apparently, there is no mistake in the order of the Tribunal as envisaged under section 254(2) of the Act. Therefore, only provision under which the order could have been recalled is rule 24 of the ITAT rules subject to fulfilment of the conditions prescribed thereunder. 6. In the present case, in my opinion, there is a good and sufficient reason for not appearing for hearing on 12.5.2022 by assessee or by her counsel. Accordingly, exercising power under Rule 24 of ITAT, I recall the order for deciding the same on merit. The miscellaneous petition filed by the assessee is allowed. 7. After recalling the order, the ld. A.R. made submission on merit of the case. According to her the amount of Rs.10.10. lakhs addition sustained by ld. CIT(A) u/s 69A of the Act has been properly sourced from the amount she brought it from Dubai to India on various occasions at Rs.11.5 lakhs and this has been supported by her frequent withdrawals and deposit into her bank account in India and foreign bank accounts and salary certificate issued by her employer in abroad. According to her, these evidences are not properly examined by the lower authorities and prayed that addition may be deleted on the basis of above evidence. 8. On the other hand, ld. D.R. submitted that the assessee have no enough foreign remittances to her bank accounts and MP No.101/Bang/2022 Ms. Sneha Nerli, Belgaum Page 6 of 7 only submitted that assessee brought these cash frequently while visiting to India from abroad, which is not supported by proper evidence. Hence, addition to be sustained. 9. I heard the rival submissions and perused the materials available on record. In my opinion, the assessee has placed before me various evidences with regard to frequent bringing of money on her visit to India from Dubai and also furnished her bank account details with India and abroad and also salary certificate from her employer. In view of these details, it is appropriate to remit the issue in dispute to the file of AO for fresh consideration. Accordingly, the issue is remitted to the file of AO for fresh consideration so as to examine whether there are enough sources to deposit the money into bank account at Rs.10.10 lakhs during the demonetization period after 10.11.2016. 10. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. 11. The Miscellaneous petition filed by the assessee is allowed. Order pronounced in the open court on 9 th Jan, 2023 Sd/- (Chandra Poojari) Accountant Member Bangalore, Dated 9 th Jan, 2023. VG/SPS MP No.101/Bang/2022 Ms. Sneha Nerli, Belgaum Page 7 of 7 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.