Harneet Singh Madan, Ludhiana V. ITO, W-6(1), Ludhiana

MA 22/CHANDI/2021

AI Insights

The case revolves around a Miscellaneous Application filed by Shri Harmeet Singh Madan against an ex-parte order in ITA No. 1005/Chd/2019. The assessee contended that he did not receive any notice of hearing due to a change in his residence and reliance on another occupant to forward his mail, which was not fulfilled. The Departmental Representative argued that the application was barred by limitation. However, the Tribunal found merit in the assessee's claim of non-receipt of notice due to the change of address and the impact of the COVID-19 pandemic on legal timelines, thus allowing the application and recalling the ex-parte order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127574 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-03-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 21-09-2021
• Other Referred Cases: Cement Corporation of India Ltd. Vs. Asst. CIT, Circle 5(2), New Delhi
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Rectification of order; Set aside
• Section: 2; 254(2)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “ए” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “ A ”, CHANDIGARH ी स ु धांश ु ीवा तव, या यक सद य, एवं ी "व#म %संह यादव, लेखा सद य BEFORE: SHRI. SUDHANSHU SRIVASTAVA, JM & SHRI. VIKRAM SINGH YADAV, AM Miscellaneous Application No. 22/Chd/2021 In ( ITA NO. 1005 /Chd/ 2019 Assessment Year : 2011-12 Shri Harmeet Singh Madan H.No. 53-I, BRS Nagar, Ludhiana The ITO Ward-6(1), Aaykar Bhawan Rishi Nagar, Ludhiana PAN NO: ARPPS2409D Appellant Respondent ! " Assessee by : None (Adj. Application) # ! " Revenue by : Shri Manveet Singh Sehgal, Sr. DR $ % ! & Date of Hearing : 17/03/2023 '()* ! & Date of Pronouncement : 21/03/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : The present Miscellaneous Application has been filed by the Assessee against the ex-parte order passed by the Coordinate Bench in ITA No. 1005/Chd/2019 dt. 29/05/2020. 2. None appeared on behalf of the assessee but an adjournment application has been filed by the Ld. AR Shri Kuldeep Singh. However considering the facts that this Miscellaneous Application is pending for quite sometime, we find no useful purpose would be served in adjourning the matter any further. Hence basis the material available on the record and after hearing the Ld. DR the matter is hereby been decided. 3. In the misc. application, it was submitted that the appeal of the assessee was dismissed ex-parte qua the assessee and no notice of hearing has been received by the assessee. It was submitted that the assessee was earlier living in 2 a flat at 53-I, BRS Nagar, Ludhiana and subsequently has shifted his residence to Flat No. 905, D-2, Kendriya Vihar, Sunny Enclave, Mohali and the assessee had requested the occupant of House No. 53-I, BRS Nagar, Ludhiana to receive any letter which is coming in his name and inform him about the same or alternatively redirect the letter to his changed address. However the notice issued by the Tribunal was not received by them nor they have informed the assessee about any notice coming from the Tribunal. It was accordingly submitted that the notice issued by the Tribunal appears to have remained unserved due to non availability of the assessee at the given address. It was submitted that the assessee could not submit his new address at Mohali as it was a rented flat in a Central Government Employees Colony and the assessee did not plan to stay here for long, and he was confident that the present occupant of the house at Ludhiana who had assured him that any letter coming in his name will be received and sent to him. However the assessee could not received any such notice and in view of the same, he could not appear before the Tribunal. It was accordingly submitted that there is no negligence or willful default on the part of the assessee and the ex-parte order so passed by the Tribunal may be recalled and appeal of the assessee be heard on merits. 4. Per contra, the Ld. DR submitted that the order was passed by the Coordinate Bench on 29/05/2020 and the Miscellaneous Application has been filed by the assessee on 20/09/2021 which is beyond the stipulated period of six as per provision under section 254(2) of the Act. It was accordingly submitted that the Miscellaneous Application were filed by the assessee is barred by limitation, therefore cannot be admitted. 5. We have heard the ld DR and perused the material available on the record. As per record of the Registry, it is noticed that the order was sent through the Registered AD at House No. 53-I, BRS Nagar, Ludhiana and same has returned undelivered. Thereafter the Registry has written to the ITO, Ward(6)-1, Ludhiana to serve the order on the assessee and the ITO, Ward 6(1), Ludhiana 3 vide his letter dt. 27/07/2020 has submitted that the order so passed by the Tribunal was tried to be served through the Notice Server, however the order could not be served since the assessee was not residing at the given address i.e; H.No. 53-I, BRS Nagar, Ludhiana. It has also been submitted that the assessee has updated his address in PAN database as “H.No. W S 140, Near Post office, Basti Sheikh, Jalandhar and jurisdiction over the case now lies with ITO Ward 1(2), Jalandhar. We therefore find merit in the contention of the assessee that due to change of address, the order so passed by the Coordinate Bench could not be served on the assessee and which has resulted in delayed receipt of the said order and only on receiving certified copy of the order subsequently from the Registry, the assessee has filed the Miscellaneous Application. 6. Given that the order has been passed by the Coordinate Bench ex-parte qua the assessee, we find that the assessee has a reasonable cause for non appearance on account of change of address and therefore in the interest of substantial justice, the order so passed by the Coordinate Bench is hereby recalled invoking Rule 24 of the ITAT Rules and Miscellaneous Application of the assessee is allowed. 7. On the issue of limitation as contended by the Ld. DR, we find that firstly, the limitation stand extended in view of the fact that the period under consideration falls under the extended covid-19 pandemic period which needs to be excluded in view of the decision of the Hon’ble Supreme Court. Secondly, we find that matter is squarely covered by the decision of Hon’ble Delhi High Court in case of Cement Corporation of India Ltd. Vs. Asst. CIT, Circle 5(2), New Delhi (W.P. (c) 1486/2023 dated 6/02/23) and the findings therein read as under: “6. The reasoning of the Tribunal for rejecting the miscellaneous application is contained in paragraph 4 of the impugned order i.e., the order dated 07.09.2022. 6.1 For the sake of convenience, the same is extracted hereafter: "4. We have heard the rival submissions and perused the records before us. From the record placed before us it is noticed that these Misc. 4 applications were filed on 24.09.2018. The provisions of subsection ( 2 ) of section 254 stipulates the time limit for disposal of Misc. application filed at any time within 6 months from the end of the month in which the order was passed by the Tribunal under section 254(1 ) of the Act. It is noticed that the Tribunal had passed the order under section 254(1) of the Act on 24.01.2018 meaning thereby any Misc. application filed under section 254(2) of the Act with a view to rectify any mistake apparent from record is to be disposed of at any time within 6 months from the end of the month in which the order was passed i.e. before 31.07.2018. In the case of the assessee the Misc. applications were filed on 24th September, 2018 which is beyond the period of 6 months for disposal of the Misc. applications set out in the provisions of section 254(2) meaning thereby the Misc. applications should have been filed before 31st July, 2018. The assessee filed petition requesting for condonation of delay in filing Misc. applications. However, nowhere in the statute provides for condonation of delay in filing Misc. applications before the Tribunal under section 254(2) of the Act. Condonation of delay in filing Misc. applications by the Tribunal is beyond the powers ofthe Tribunal in the absence of any specific provision in the statute. In the circumstances the Misc. applications filed by the assessee are liable to be rejected. " 7. As would be evident, the Tribunal seems to have taken recourse to the provisions of Section 254 of the Act. The Tribunal has alluded to the fact, that since rectification of mistake, apparent from the record, can be made within six months from the end of the month in which the concerned order was passed, the petitioner's application for recall of the order dated 24.01.2018 could not have been entertained. 7.1 In this context, the Tribunal has fixed two points i.e., the date on which the petitioner's miscellaneous application was filed i.e., 24.09.2018, and when the six- month period expired, commencing from the end of the month in which the order was passed i.e., 31.07.2018. Having noticed these dates, the Tribunal has concluded that under Section 254 of the Act, it had no power to condone the delay qua the application for recall of its order, which was filed beyond six months. 8. In our view, the application moved by the petitioner was not moved with a view to rectify any mistake apparent from the record, or even to amend any order. The petitioner simply sought a recall of the order dated 24.01.2018, whereby the appeal was dismissed for non-prosecution. Therefore, in our opinion, the said provision was not applicable for adjudicating the petitioner's application for recall of the order dated 24.01.2018. It appears, that the only avenue available to the Tribunal was as contemplated in Rule 24 of the ITAT Rules. 8.1 For the sake of convenience, the same is extracted hereafter: "[Hearing of appeal ex parte for default by the appellant. 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 : 5 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] " 9. A perusal of the said Rule seems to plainly convey, that if on the date fixed for hearing, or on any other date to which the hearing is adjourned, the appellant does not appear in person or through an authorized representative, when the appeal is called out for hearing, the Tribunal may dispose of the appeal on merits, after hearing the respondent. 10. Furthermore, the proviso appended to the Rule indicates, that where an appeal has been disposed of on merits, and the appellant appears thereafter, the Tribunal may set aside the ex parte order and restore the appeal, if it is satisfied that there was sufficient cause for his nonappearance. Although in the main part of Rule 24, the expression used is "may", when read with the proviso appended thereto, it leads to the conclusion that if the Tribunal chooses to dispose of the appeal on merits after hearing the respondent in the absence of the appellant, and the appellant thereafter appears and shows sufficient cause for not appearing on the date when the appeal is disposed of, the Tribunal is obliged, in law, to set aside the order passed on merits and restore the appeal. As it appears from a perusal of the record, the Tribunal's attention does not seem to have been drawn towards Rule 24 of the ITAT Rules. The Tribunal, as noted above, has, in our view, taken recourse to the wrong provision i.e., Section 254 of the Act. 11. Having heard the learned counsel for the parties in some detail and examined the record, according to us, this matter may deserve a hearing on merits, for the following reason: (i) The petitioner has been denied depreciation allowance, amounting to Rs.53,31,982/- for the period in issue i.e., AY 2011-2012. According to the petitioner, the Commissioner of Income Tax (Appeals) ["CIT(A)"] had denied the depreciation allowance to the petitioner, on the ground that the subject plants had been closed, and the plant and machinery was held only for the purpose of selling the same, in pursuance of the scheme framed by the Board for Industrial and Financial Reconstruction (BIFR) constituted under the Sick Industrial Companies (Special Provisions) Act, 1985. However, the petitioner claims, that in the previous AYs i.e., AY 2003-2004 to AY 2010-2011 and in AY 2014-2015, depreciation claimed with respect to the very same block assets was sustained by the CIT(A). 12. Furthermore, in our view, while there was delay, the appellant seems to have furnished some reasons for explaining the delay. Broadly, the reasons given were that the notice of hearing issued by the Tribunal for the hearing on 24.01.2018 was misplaced, and did not reach the concerned officer of the petitioner, which according to the petitioner, was the primary cause for non- attendance on the said date. Furthermore, as per the petitioner, it was unaware of the passing of the dismissal order dated 24.01.2018, and only came to know about the same only on 05.02.2018. The petitioner also contends, that the inadvertent delay in filing the miscellaneous application was caused on account 6 of the concerned persons in the Department being temporarily transferred to a plant outside Delhi, and some persons retiring during the relevant period. 13. Having regard to the aforesaid, i n our opinion, the appeal deserves to be heard on merits. 13.1 Accordingly, the impugned order dated 07.09.2022 is set aside. The matter is remitted to the Tribunal for disposal of the petitioner's statutory appeal on merits.” 8. In the result, the order so passed by the Coordinate Bench is hereby recalled to hear on merits of the case and the Registry is directed to list the matter in due course. 9. Issue notice at the assessee’s current addresses at Flat No. 905, Block D-2, Kendriya Vihar, Sunny Enclave, Kharar, Mohali and at H.No. W S 140, Near Post office, Basti Sheikh, Jalandhar and also at his email address [e-mail] and also at email address of Counsel of the assessee, Shri Kuldip Singh at [e-mail]. 10. In the result, misc. application is allowed. (Order pronounced in the open Court on 21/03/2023 ) Sd/- Sd/- स ु धांश ु ीवा तव "व#म %संह यादव (SUDHANSHU SRIVASTAVA) ( VIKRAM SINGH YADAV) या यक सद य / JUDICIAL MEMBER लेखा सद य/ ACCOUNTANT MEMBER AG Date: 21/03/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File ( + $ By order, ; # Assistant Registrar