Mr. Ashish Arora, Ludhiana V. DCIT, Ludhiana

MA 11/CHANDI/2022

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5483 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-11-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 13-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Period of limitation; Reasonable cause; Time period of passing order
• Section: 13(2)

Judgement Text

आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ “ए” , च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH (VIRTUAL COURT) ᮰ी आकाश दीप जैन, उपा᭟यᭃ एवं ᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM Miscellaneous Application No. 11/Chd/2022 In आयकर अपील सं./ ITA NO. 1152/Chd/2014 िनधाᭅरण वषᭅ / Assessment Year : 2010-11 Mr. Ashish Arora B-2, Kitchlu Nagar, Ludhiana बनाम The DCIT Ludhiana ̾थायी लेखा सं./PAN NO: ADKPA1111B अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri Sudhir Sehgal, Advocate राज᭭व कᳱ ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr. DR सुनवाई कᳱ तारीख/Date of Hearing : 03/11/2023 उदघोषणा कᳱ तारीख/Date of Pronouncement : 08/11/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : The present miscellaneous application has been filed by the Assessee against the order passed by the Coordinate Bench dt. 27/07/2016 in ITA No. 1152/Chd/2014 for Assessment Year 2010-11. 2. In the Miscellaneous Application, it has been submitted as under: MISCELLANEOUS PETITION IN INCOME TAX APPEAL NO.1152/CHD/2014 FOR ASSESSMENT YEAR 2010-2011 IN THE CASE OF MR. ASHISH ARORA, B-2, KITCHLU NAGAR, LUDHIANA; PAN: ADKPA1111B 1. That in the above said case the appellant had filed appeal before the Hon'ble Bench listed as ITA No. 1152/Chd/2014. 2. That the assessee has been carrying on the business under the name and style of three Proprietorship concerns namely M/s Shiva ji Traders, M/s Shanti Knit Fab and M/s Parvati Textiles, which have since been closed down due to the severe financial crises and other serious medical issues of the family. 3. That the appeal in the above said case was filed before the Hon'ble Bench against the quantum order, which was also passed ex-parte vide order dated 27.07.2016 in ITA No. 1152/Chd/2014 as per copy of the order is being filed herewith. Even the Ld. CIT(A) had passed the ex-parte order due to the circumstances beyond the control of the assessee. 4. That the appeal was filed giving address as B-2, Kitchlu Nagar, Ludhiana. 2 5. That as per the order of the Hon'ble Bench, the appeal was fixed before the Hon'ble Bench on 29.07.2015, 02.11.2015, 29.01.2016, 06.04.2016 and finally on 26.07.2016. The assessee had sought adjournments on some dates, due to serious heart relates issues of his father, for which, evidences were furnished and also on account of certain attachment/possessions, having been taken over by bankers of the business premises and other personal properties of the self & family. That on 19.07.2016, the constituted Bench was cancelled and the Bench was reconstituted for 26.07.2016. 6. That the Hon'ble ITAT, Chandigarh Bench had dismissed the appeal of the appellant for non-prosecution and have not decided the appeal of the appellant on the merits, as envisaged in Rule 24 of Appellate Tribunal Rules 1961. 7. The assessee was not having any information regarding fixation of hearing in the case before the Hon'ble Bench reconstituted for 26-072016, due to peculiar adverse circumstances being faced by the appellant, at the relevant point of time and thereafter. 8. Non-attendance of the appellant on 26-07-2016 was due to sufficient cause; and it was neither deliberate nor due to negligence on the part of the appellant. In such circumstances, it is prayed that the appeal of the appellant may be restored keeping in view proviso to Rule 24 of the Appellate Tribunal Rules 1961. 9. In fact during the period 2014 to date, the appellant is engaged in protracted litigation due to recovery proceedings initiated under Section 14 of SARFASI Act, 2002 by issue of Notice dated 7-7-2014 for recovery of loan of Rs.30 Crores. Plus accrued interest of approx. 9 Crores, outstanding against family concern viz. M/s Shanti Sales India Pvt. Ltd., in which father of the appellant viz. Ashwani Arora is the Managing Director. The immovable properties owned by the appellant, his parents and other family members were lying pledged with the aforesaid Bank, against loan amount of Rs.30 crores. 10. The aforesaid Bank had issued Possession Notices for takeover of immovable properties owned by the appellant and his parents including residential House No.2-B, Kitchlu Nagar, Ludhiana. 11. The Bank had put the immovable properties, pledged with the Bank, by publishing notices e-auction, in Newspapers. The Bank had informed about publications of e-auction of immovable properties vide letters dated 25-06-2016, 30-06-2016, 3-01-2017, 10-01-2018, 6- 11-2018, 701-2020. 12. Due to closure of the business, an adverse recovery proceeding, by the Bank, father of the appellant had become patient of hyper tension, and has been suffering from hyper tension since 2012. He had to undergo major cardiac surgery during FX 2015/16 and was not in a position to look after the adverse proceedings initiated by the said Bank for recovery of outstanding loan. 13. That it is submitted no petition to restore the appellate proceedings could be made until now due to the following circumstances: a). In fact, the address as given in Appeal Memo viz., B-2, Kitchlu Nagar, Ludhiana is that of Residential House in the name of parents of the assessee, namely Sh. Ashwani Arora and Smt. Asha Arora. b). In fact, the assessee's father, Sh. Ashwani Arora had taken loan of Rs.30 crores from Bank of India in the name of his company namely M/s Shanti Sales India Pvt. Ltd., in which, he was managing director. 3 c). In fact on account of non-payment of loan to the aforesaid Bank, the Bank Account of M/s Shanti Sales India Pvt. Ltd., was declared as NPA, resulting in recovery proceedings started by the Bank by issue of Notice dated 7-07-2014 issued u/s 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFASI Act, 2002 in short) to the aforesaid company as well as against the appellant, his mother Smt. Asha Rani W/O Shri Ashwani Arora, his father Shri Ashwani Arora being Guarantors for Cash Credit Loan amount of Rs.30 crores; copy of notice is enclosed. d). The residential house bearing house No. B-2, Kitchlu Nagar, Ludhiana belonging to Sh. Ashwani Arora and Smt. Asha Arora was pledged with the Bank of India by way of equitable mortgage in their capacity as Guarantor. That the aforesaid house was put to auction in June 2016 and was ultimately sold in September 2016. e) In fact the appellant alongwith his parents had shifted to the house of his paternal uncle, Sh. Madan Mohan, elder brother of Sh. Ashish Arora at Gurdev Nagar, Ludhiana. f) That immovable properties belonging to the appellant was also lying mortgaged with Bank of India, as Guarantor for loan of Rs.30 crores given by Bank to the aforesaid company of my father. That e-auction of the immovable properties were carried out by the aforesaid Bank as per letter dated 20.06.2022 enclosed. g) That counsel of the appellant, Shri J.M. Chaitley, CA, attending to tax matters of the appellant had expired on 6-62018 after prolonged illness. h) That, being the only son of his parents, the appellant had to attend to recovery proceedings initiated by the Bank against the aforesaid company as well as against the family members, who had mortgaged/pledged their immovable properties with the Bank, as Guarantors. i) That the appellant and his family had to pass through a bad phase due to Covid-19. On this account, the Hon'ble Supreme Court vide their order dated January 10,2022 passed in Misc. application No. 21 of 2022 has directed to exclude period from 15-03-2020 till 28-02- 2022; and further granted limitation period of 90 days from 1-03-2022. 15. The appellant case is squarely covered by the judgment of Hon'ble High Court of Punjab & Haryana High Court in the case of Devinder Singh Pannu Vs. ITO delivered on 27th July, 2020 in ITA No. 86 of 2010 (O&M) wherein it has been held by the Hon'ble High Court "that the appellant has the statutory remedy of filing an application for restoration of appeal which was dismissed for non-prosecution and in view of Rule 24 of the Rules, there no period of limitation prescribed within which the aggrieved party can approach the Tribunal for the purpose of restoration." 16. That the assessee having been prevented by sufficient and reasonable cause in not appearing before the Hon'ble Bench on the date fixed for hearing and, as such, it is prayed that the order as passed in ITA No.1152/Chd/2014 for Asstt. Year 2010-115 may, please, be recalled and a fresh hearing be given and the assessee assures the full cooperation for the early disposal of the above said case. 17. That in future, the notices, if any, may, please, be sent at the new address i.e. Chamber No. 413, 4th Floor, K-10 Tower, Feroze Gandhi Market, Ludhiana.” 3. The Ld AR is heard who has referred to the aforesaid misc. application filed under Rule 24 and has prayed for recall of the order in the interest of justice. 4 4. Ld. DR is heard who has relied on the order passed by the Coordinate Bench. 5. After hearing both the parties and considering the material available on the record, we find that the matter has been decided ex-parte qua the assessee on account of non- prosecution. Further, on perusal of the misc. application moved under Rule 24, we find that there was reasonable cause for non-appearance by the assessee on the scheduled date of hearing. Following the dicta laid down by the Hon’ble Punjab and Haryana High Court in case of Devinder Singh Pannu Vs. ITO (supra) wherein the Hon’ble High Court has held that the appellant has statutory remedy of filing an application for restoration of appeal which was dismissed for non prosecution and under Rule 24 there is no period of limitation which is prescribed for the aggrieved party to approach the Tribunal for the purposes of restoration of the appeal. In the instant case, even though the Registry has pointed out delay in moving the present Misc. Application by 1989 days, given that the application has been moved under Rule 24, following the decision of the Hon’ble Punjab & Haryana High Court, the Misc. Application is allowed. The order passed by the Coordinate Bench is recalled to hear the arguments on merits. The matter is scheduled for hearing on 03/01/2024. Since pronouncement in the open Court, separate notice is dispensed with. 6. In the result, Misc. Application filed by the Assessee is allowed. Order pronounced in the open Court on 08/11/2023 Sd/- Sd/- आकाश दीप जैन िवᮓम ᳲसह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा᭟यᭃ / VICE PRESIDENT लेखा सद᭭य/ ACCOUNTANT MEMBER AG Date: 08/11/2023 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. आयकर आयुᲦ (अपील)/ The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 6. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar