Mr. Arun Kumar, Mandi Gobindgarh V. ITO, W-1, Mandi Gobindgarh

MA 143/CHANDI/2019

AI Insights

The case involves Mr. Arun Kumar, the appellant, who filed a Miscellaneous Application under section 254(2) of the Income Tax Act, 1961, seeking recall of an ex-parte order passed against him for the assessment year 2011-12. The ex-parte order was issued due to the non-appearance of the appellant's counsel, who failed to inform the Tribunal about the appellant's inability to receive the notice for the hearing, as he had closed his business and vacated the premises. The Tribunal considered the circumstances leading to the non-appearance and the delay in filing the appeal, which was attributed to the personal loss suffered by the appellant's new accountant. The Tribunal also examined the legal precedents and rules governing the limitation period for filing such applications.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133725 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 8 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-03-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 17-07-2019
• Other Referred Cases: Om Prakash Sangwan vs ITO, Ward-33 (4), New Delhi, Om Parkash Sangwan Vs ITO, New Delhi, ACIT Vs Ansal Housing and Construction, Khaitan Paper and Industries Ltd. Vs CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation
• Section: 274; 254(2); 48

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,च瀃डीगढ़ 瀈यायपीठ च瀃डीगढ़ 瀈यायपीठच瀃डीगढ़ 瀈यायपीठ च瀃डीगढ़ 瀈यायपीठ , च瀃डीगढ़ च瀃डीगढ़च瀃डीगढ़ च瀃डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’ CHANDIGARH BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER M.A. 143/CHD/2019 in आयकर आयकरआयकर आयकर अपील अपीलअपील अपील सं संसं सं./ ITA No. 851/CHD/2018 Assessment Year. : 2011-12 Mr. Arun Kumar, C/o Arjun Trading Co., Mandi Gobindgarh. बनाम VS The ITO, Ward-1, Mandi Gobindgarh. 瀡थायी लेखा सं./PAN /TAN No: ACIPK2408E अपीलाथ牸/Appellant 灹瀄यथ牸/Respondent िनधा榁琇रती क琉 ओर से/Assessee by : Shri Anil Khanna, CA राज瀡व क琉 ओर से/ Revenue by : Shri Akashdeep, JCIT, Sr.DR तारीख/Date of Hearing : 17.03.2023 उदघोषणा क琉 तारीख/Date of Pronouncement : 28.03.2023 आदेश आदेशआदेश आदेश/ORDER PER DIVA SINGH By the present Miscellaneous Application moved u/s 254(2) of the Income Tax Act, 1961 in ITA No 851/CHD/2018 pertaining to 2011-12 assessment year, the assessee prays for recall of the ex-parte order dated 30.11.2018. Reliance was placed on the application dated 18.07.2019. For ready reference, the arguments recorded in para 2 of the application are reproduced hereunder : 2. That on 29.11.2018 the then counsel could not a p p e a r due to the reason that assessee has not received the notice for appearing before you due to the reason that assessee had closed the business and vacated the premises .He failed to inform your honor due to oversight for which an affidavit is hereby enclosed. He has joined as accountant with GOYAL & Co Loha Bazar M.Gobindgarh . M.A. 143/CHD/2019 In ITA 851/CHD/2018 A.Y. 2011-12 Page 2 of 5 2. Addressing the delay pointed out by the Registry, it was submitted that the ex-parte order dated 30.11.2018 was received by the assessee on 28.02.2019 wherein there is a delay of 48 days. The ld. AR relying upon the correctness of the facts as asserted in the application filed by the assessee submitted that in the facts of the present case, for no fault of the assessee and due to reasons beyond its control, the delay has occurred. Considering the unfortunate circumstances as addressed in the application relatable to him as the counsel, it was his prayer that the delay may be condoned. The reasons as explained by the assessee relied upon by the ld. AR read as under : “The delay in filing the appeal was due to the reason that I had approached Shri Anil Khanna Chartered Accountant of Ludhiana for filling appeal. He was mentally disturbed as his younger brother had expired in young age on 10 th Jan. 2019 due to cancer. He failed to reconcile that shock and was not coming on work for three four months. When he came he prepared the appeal and handed over to me and I submitted it on 18.07.2019. Further we want to submit that limitation period of three month does not apply on M.A. as decided by Delhi High Court in the case of Om Prakash Sangwan vs ITO, Ward-33 (4), New Delhi. (Copy of judgment is enclosed).” 3. The ld. Sr.DR Mr. Akashdeep appearing on behalf of the Revenue submitted that there is a delay of almost a year. Accordingly, the limitation spelt out in the Statute cannot be permitted to be further increased. He submitted that he has certain orders of the ITAT including the order of the Nagpur Bench which clearly lays out that the statutory M.A. 143/CHD/2019 In ITA 851/CHD/2018 A.Y. 2011-12 Page 3 of 5 limitation cannot be extended. Accordingly, it was his prayer that the application may be dismissed. 4. The ld. AR relying upon decision of the Delhi High Court dated 22.05.2018 in the case of Om Parkash Sangwan Vs ITO, New Delhi submitted that the issue stands addressed by the decision of the Hon'ble Delhi High Court. Copy filed. 5. We have heard the parties and perused the material available on record. In the light of the submissions of the parties before the Bench and on considering the record, we are satisfied that the non-appearance of the assessee on the date of hearing was not intentional or deliberate. The dismissal of the assessee's appeal in limine, we find does not create any vested right in favour of the Revenue as the dismissal is solely on the grounds of non-representation and the decision is not on the merits of the appeal. The objections of the ld. Sr.DR we find stand addressed by the decision of the Hon'ble Delhi High Court dated 22.05.2018 in the case of Om Parkash Sangwan Vs ITO, New Delhi wherein their Lordships were seized of rectification sought beyond the statutory time limit. It is seen that considering a near identical fact wherein the appeal of the assessee was not decided on merits by the ITAT. The dismissal of rectification application referring to Rule 25 of the ITAT Rules was held to be a failure on the part of the ITAT. Their Lordships considering the Rules opined that the said Rule does not stipulate any period of M.A. 143/CHD/2019 In ITA 851/CHD/2018 A.Y. 2011-12 Page 4 of 5 limitation for the aggrieved party to approach the Tribunal. Hence, the order of the ITAT had been set aside holding that it is open to the appellant to approach the ITAT seeking a disposal on merits. For ready reference, relevant discussion from the decision is extracted hereunder : “The appellant's grievance is that the ITAT vide its impugned order rejected the rectification application. The ITAT's order dismissing the appeal was dated 16.06.2016; however, the appellant moved under Section 254(2) of the Income Tax Act, 1961 (hereinafter referred to as the "Act") by an application on 02.6.2017 which was dismissed by the impugned order. Learned counsel for the appellant sought to impress upon the Court that the period mentioned in Section 254(2) of the Act only applied when the Tribunal notices the error and decides to proceed ahead to rectify it and per se does not indicate any limitation within which the aggrieved party (assessee or Revenue) can approach it. He relied upon the judgments of the Allahabad High Court titled Vijay Kumar Ruia v. Commissioner of Income Tax [2011] 15 taxmann.com (Allahabad) and Gujarat High Court titled Liladhar T Khushlani Vs. Commissioner of Customs Tax Appeal No.915 of 2016 delivered on 25.01.2017 for this purpose. This Court is of the opinion that those judgments cannot afford the appellant any comfort. Section 254(2) of the Act was advisably amended to curtail extended period of four years which had been provided to either class of litigants to approach the ITAT for a rectification. In this case, the Court has considered the submissions of the parties. In this case, the ITAT did not decide the appeal on the merits as it is mandated to but rather rejected for non-prosecution. 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 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. Appeals are disposed of in the above terms.” (emphasis supplied) 5.1 Accordingly, relying upon the aforesaid decision of the Hon'ble Delhi High Court qua the objections of the Department on limitation and M.A. 143/CHD/2019 In ITA 851/CHD/2018 A.Y. 2011-12 Page 5 of 5 drawing support from the decision of the Hon’ble Delhi High Court in the case of ACIT Vs Ansal Housing and Construction (2005) 274 ITR 131 (Del) and Khaitan Paper and Industries Ltd. Vs CIT 273 ITR 234 (Calcutta) the ex-parte order dated 30.11.2018 is recalled. Said order was pronounced in the open court at the time of hearing itself in the presence of the parties. 6. After considering the convenience of the parties, the appeal is directed to be fixed for hearing on 23.05.2023. Said date was announced in the presence of the parties, accordingly sending of separate notices for the hearing is dispensed with. 7. In the result, the Miscellaneous Application filed by the assessee is allowed. Order pronounced in the Open Court on 28 th March, 2023. Sd/- Sd/- (VIKRAM SINGH YADAV) (DIVA SINGH) लेखा लेखालेखा लेखा सद瀡य सद瀡यसद瀡य सद瀡य/ Accountant Member 瀈याियक 瀈याियक瀈याियक 瀈याियक सद瀡य सद瀡यसद瀡य सद瀡य/ Judicial Member “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2.灹瀄यथ牸/ The Respondent 3.आयकर आयु猴/ CIT 4.िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5.गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar