Shri Manesh Bansilal Shah, Vadodara V. The Income tax Officer, Ward-1(2)(3), Vadodara

MA 129/AHD/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5223 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 22-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Question of law; Reasonable cause
• Section: 260A

Judgement Text

, ‘C’ । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD (Convened through Virtual Court) BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMEBR MISCELLANEOUS APPLICATION No. 129/Ahd/2021 (in ITA No. 467/Ahd/2017) ( Assess ment Ye ar : 2013-14) Sh ri M an es h Ba ns i lal Sh ah G-2 , Ba ns ur i Fl ats , 28, Pu rs hot ta mn ag ar S oci et y, Ak ota , Va do da ra / V s . In co me T ax Of fi ce r W ar d - 1( 2)( 3) , Aa yk a r Bh av an , Ra ce Co ur se Ci rc le, Va d o dar a / /P A N / G IR N o . : A F E P S 3 0 1 4 D ( Appellant) . . ( / Respondent) /Appellant by : No ne / Respondent by : Shri S. S. Shukla, Sr. D.R. ु D a t e o f H e a r i n g 04/02/2022 !"# /D a t e o f P r o n o u n c e m e n t 10/02/2022 ORDER PER MAHAVIR PRASAD, JM: By virtue of this Miscellaneous Application filed by the Assessee u/s 254(2) of the Act, the Assessee intends to recall the impugned ex parte order dt. 18-09-2018 passed by this Tribunal. MA No. 129/Ahd/2021 [Shri Manesh B. Shah vs. ITO] AY 2013-14 - 2 - 2. The assessee by his miscellaneous application submitted before us as under: “1. The present Application is filed by the above mentioned applicant/appellant for dismissing the appeal of the assessee in limine by order dated 18-09- 2018 passed by Hon'ble Tribunal ex-parte. 2. The Hon'ble ITAT in its order in para Nos. 2 has observed as under. – 2. At the time of hearing, none appeared on behalf of the appellant- assessee. Last notice dated 14/06/2018 of hearing was sent to the assessee fixing the date of hearing on 28/08/2018 at the address indicated in column No. 10. Despite this, the assessee remained unrepresented. In the aforementioned peculiar facts and circumstances of the case, in the absence of any representation on behalf of the assessee or petition seeking time, it can be safely presumed that the assessee is not serious in pursuing the appeal filed. 3. The applicant/appellant most respectfully submits that the facts of the case are as under. – 3.1 That the above mentioned appeal was filed by the assessee on 23-02-2017. Thereafter, in accordance to the order passed by the Hon'ble ITAT, the hearing for this matter was fixed on 28-08-2018, However, as none of the party appeared or took adjournment on the date of hearing on behalf of the assessee, the Hon'ble ITAT has dismissed the appeal of the assessee ex-parte. However, the reason for non appearance before Hon'ble ITAT on the date of hearing was that, the notice for hearing was not received to the assessee. Moreover, even the copy of ex-parte order passed by the Hon'ble ITAT is also not received to the assessee till today. Further, when penalty notice from CIT(A) dated 04/08/2021 (Copy of the said notice is attached herewith marked as Annexure-A) was received on email of AR of the assessee, the assessee verified the status of quantum appeal on ITAT website and thereafter, it was came to the knowledge to the assessee about the ex- parte order has been passed by the Hon'ble ITAT dated 28.08.2018. Hence, due to above mentioned reason that copy of hearing notice and copy of ex-parte order was not at all received to the assessee, the hearing was left to be attended on the date of hearing. 3.2 In support of the above contention, the affidavit of Shri Manesh B Shah, is attached herewith for your Honours kind perusal. Thus, this being a reasonable cause in the interest of the natural justice and equity, the assessee requests your Honours to kindly grant a fresh opportunity to the assessee to represent his case on merits, and thus thereby requesting your Honours to recall the appeal by setting aside the Ex-parte Order. Otherwise it may cause great injustice and hardship to the applicant. Needless to say for this act of kindness, the applicant as is duty bound shall forever pray and remain grateful. MA No. 129/Ahd/2021 [Shri Manesh B. Shah vs. ITO] AY 2013-14 - 3 - 4. Thus, on account of above mentioned facts your Honours will appreciate that there was a sufficient & reasonable cause of failure to attend/seek adjournment on the date of hearing. It was not attributable to the willful or deliberate neglect or omission on the part of the applicant. Hence we request your good Honours to revive the appeal in the light of above facts and circumstances. In addition to above assessee request that considering the proviso to Rule-24 of Income Tax (Appellate Tribunal) Rules, 1963, the appeal may be restored for hearing since there was a sufficient cause for non-appearance. Moreover, Hon'ble Supreme Court in the case of Sangram Singh v. Election Tribunal, AIR 1955 SC 425 has observed that the procedural law is based on the principles of natural justice which require that no one should be condemned unheard and that a decision of dismissing the appeal ex-parte should not be taken. Hence, in the letter and spirit of law the appellant/applicant requests your good honor to kindly restore the appeal. 5. The Hon'ble Tribunal be pleased to accept the prayer of the applicant/appellant to restore the matter for hearing.” 3. The assessee stated that relief can be granted under ITAT Rule 24 which contemplates 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. A bare perusal of Rule 24 supra reveals that in case the Hon'ble Tribunal disposes off any appeal on merits after hearing the respondent and later, assessee satisfies the Hon'ble Tribunal that there was a "sufficient cause" for his non-appearance, then the Tribunal shall pass an order setting aside the ex-parte order and restore the appeal. Hence, firstly, the Hon'ble Tribunal ought to have disposed of the appeal on merits. Secondly, the Assessee having already explained "sufficient cause" for non-appearance before Hon'ble Tribunal here- in-above and hence, in light of Proviso to Rule 24 of The Income Tax (Appellate Tribunal) Rules, 1963, the ex-parte order passed by Hon’ble ITAT deserves to be set-aside and the main appeal deserves to be restored.” MA No. 129/Ahd/2021 [Shri Manesh B. Shah vs. ITO] AY 2013-14 - 4 - 3.1 The assessee stated that in the case of Golden Times Services P. Ltd. W.P.(c) No. 402/2020, Hon’ble Delhi High Court has held as under: “16. 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. 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. 17. 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.” MA No. 129/Ahd/2021 [Shri Manesh B. Shah vs. ITO] AY 2013-14 - 5 - 3.2 The assessee stated that ITAT Visakhapatnam Bench in M.A. Nos. 03 to 09/Viz/2018 & M.A. No.10/Viz/2018, Arunachalam Manickavel vs. DCIT & Anr. Order dated 16.11.2018 has allowed miscellaneous applications on similar facts and circumstances. 4. Since, the appeal was dismissed on account of non prosecution and there is a delay of 878 days, after considering the ITAT order and respectfully following the Hon’ble Delhi High Court judgment, same is condoned. 5. On the other hand the ld. DR raised no objection if the matter is recalled for fresh adjudication as per the provision of law. 6. Heard rival submissions and perused the record. On perusal of the order dt. 18-09-2018, we find that in spite of service of notices by the Registry neither any one appeared nor there was any adjournment application filed on behalf of assessee for the hearing on 28-08-2018. Thus, following the various decisions in the cases of Multiplan India (P) Ltd reported in 38 ITD 320 (Del), Hon'ble Madhya Pradesh High Court in the case of Estate of late Tukojirao Holkar Vs. CWT reported in 223 ITR 480(MP) the Tribunal dismissed the appeal of assessee by passing ex parte order for non prosecution. We find that there was sufficient reason for the assessee in not appearing before the Tribunal on the said date of hearing [28-08-2018]. Therefore, in view of submission of assessee we recall the order dated 18-09-2018 by allowing this Miscellaneous Application filed by the assessee. MA No. 129/Ahd/2021 [Shri Manesh B. Shah vs. ITO] AY 2013-14 - 6 - 7. Next date of hearing in this matter is 30/03/2022 and same has been communicated to both the parties and no separate notice will be sent to any of the parties. 8. In the result, the miscellaneous application filed by the Assessee is allowed. Sd/- Sd/- ( ANNAP UR NA GUP TA) (MAHAVIR PRASAD) ACC OUNTANT MEMB ER JUDICIAL MEMBER Ahmedabad: Dated 10/02/2022 True Copy S.K.SINHA ेश ! " #े" / Copy of Order Forwarded to:- $ / Revenue 2 द / Assessee ' ( )* ु + / Concerned CIT 4 ु + - / CIT (A) . / 0 1 2 2 )*3 )* #3 45द ( द / DR, ITAT, Ahmedabad 6 1 78 9 / Guard file. By order/ द श 3 उ / 4 )* #3 45द ( द । This Order pronounced in Open Court on 10/02/2022