GANESH ATMARAM MOKASHE, PUNE V. DCIT CEN CIR 39, MUMBAI

MA 234/MUM/2020

AI Insights

The case involves Ganesh Atmaram Mokashe, the appellant, who sought the recall of ex-parte orders issued by the Income Tax Appellate Tribunal for the assessment years 2006-07 and 2009-10. The orders were initially passed due to the non-appearance of the assessee. The assessee argued that his non-appearance was due to a bonafide belief that his tax matters were being handled by the auditors of M/s Jai Corp group, following a search operation in 2009. The Tribunal considered precedents and rulings from the Bombay and Delhi High Courts, which supported the view that there is no prescribed time limit for recalling an ex-parte order under Rule 24 of the Appellate Tribunal Rules, provided there is sufficient cause for the non-appearance.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124010 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 18-05-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 15-09-2020
• Other Referred Cases: PCIT vs. ITAT (WP No.2858 of 2019), Om Praksh Sangwan vs. ITO (2018)(94 taxmann.com 394)
• Laws Referred To: Income Tax (Appellate Tribunal) Rules, 1963
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Period of limitation
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI ‘G’ BENCH, MUMBAI. Before Shri B.R. Baskaran (AM) & Shri Pavan Kumar Gadale (JM) M.A. No. 233/Mum/2020 in I.T.A. No. 4522/Mum/2014 (A.Y. 2006-07) M.A. No. 234/Mum/2020 in I.T.A. No. 4523/Mum/2014 (A.Y. 2009-10) Ganesh Atmaram Mokashe Flat No. 6/2B, Dhanraj Complex, Near Ashok Theatre, Pimri Pune - 411 017. PAN : AKKPC9094Q Vs. DCIT, Central Circle, 39 Air India Building Nariman Point Mumbai-400 021. (Appellant) (Respondent) Assessee by Dr. Prayag Jha Department by Shri Manoj Kumar Sinha Date of Hearing 19.05.2023 Date of Pronouncement 22.05.2023 O R D E R Per B.R.Baskaran (AM) :- The assessee has filed these miscellaneous applications seeking recall of the ex-parte order dated 27-07-2016 passed by the Tribunal ex-parte for assessment year 2006-07 and 2009-10. 2. The assessee has filed these applications on 16-09-2020 with considerable delay. When questioned about the same, the Ld A.R submitted that the assessee seeks recall of the orders under Rule 24 of the Appellate Tribunal Rules and for that purpose, no time limit is prescribed. In this regard, the Ld A.R placed his reliance on the decision dated 30-07-2021 rendered by the Tribunal in M A No.02/Mum/2021, wherein the Tribunal has followed the decision rendered by Hon’ble Bombay High Court in the case of PCIT vs. ITAT (WP No.2858 of 2019) and recalled the ex-parte order. The Ld A.R also placed his reliance on the decision rendered by Hon’ble Delhi Ganesh Atmaram Mokashe 2 High Court in the case of Om Praksh Sangwan vs. ITO (2018)(94 taxmann.com 394). He further submitted that the assessee is required to show that there was sufficient cause for not appearing before the bench on the date of hearing for the purpose of Rule 24 of Appellate Tribunal Rules. 3. The Ld A.R submitted that there was sufficient cause for the assessee in not appearing before the Tribunal on the date of hearing of appeal.Inviting our attention to the affidavit filed by the assessee, the Ld A.R submitted that the assessee was acting as a land aggregator for M/s Jai Corp group. The said group assigned the work of acquiring 200 acres to the assessee and he was fully engaged in that work. M/s Jai Corp group was subjected to search in March, 2009 and consequent thereto, the assessee was also subjected to search. Subsequent to the search operations, M/s Jai Corp gave assured the assessee that their auditors would take care of assessee’s income tax matters also. The Ld A.R submitted that the assessee was under bonafide belief that all his income tax problems will be taken care of by them. However, the assessee came to know that his tax matters have not been properly handled, when he received call from tax recovery officer. Subsequently, the assessee pursued the matter with the auditors of Jai Corp and did not get proper response. Hence the assessee was constrained to engage another tax consultant. After engaging new tax consultant, these miscellaneous applications have been filed. Accordingly, the Ld A.R submitted that there was sufficient cause for the assessee in not appearing before the Tribunal on the date of hearing of appeal. Accordingly, he prayed for recall of the ex- parte, common order. 4. We heard Ld D.R, who submitted that the assessee should have been vigilant in pursuing income tax matters. He submitted that the assessee only would have received the notices from the ITAT and hence, it cannot be said that the assessee was not aware of the date of hearing. Ganesh Atmaram Mokashe 3 5. We heard the parties and perused the record. Before us, the ld A.R submitted that the no time limit is prescribed under Rule 24 of Appellate Tribunal Rules for recall of an ex-parte order. We have perused the decisions relied upon by Ld A.R. In the case of PCIT vs. Income tax Appellate Tribunal (supra), the Hon’ble jurisdictional Bombay High Court has observed as under:- “14. Rule 24 of the Income tax (Appellate Tribunal) Rules, 1963 (Rules) is relevant. Rule 24 reads 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. 15. From a reading of Rule 24 as extracted above, it is seen that Tribunal is vested with the power to recall an ex-parte order. Requirement of the proviso is that Tribunal must be satisfied that there was sufficient cause for non-appearance of the appellant. No time limit is prescribed in Rule 24.” 6. The Hon’ble High Court of Delhi in the case of Om Prakash Sangwan in ITA 625/2018 & CM APPL 21436/2018, ITA 626/2018 & CM APPL 21437/2018 has also expressed an identical view that there is no time limit for recalling the order under rule 24 of Appellate Tribunal Rules. The relevant portion of the decision rendered by Hon’ble Delhi High Court is reproduced herein below:- “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 of2016 delivered on 25.01.2017 for this purpose. This Court is of Ganesh Atmaram Mokashe 4 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 IT AT 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 25does 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.” 7. We also notice that various benches of Tribunal has recalled the ex-parte orders under Rule 24 of Appellate Tribunal Rules following the decision rendered by the Hon’ble Delhi High Court, referred supra. Some of the orders of Tribunal are listed out below:- (a) the Kolkatta bench of Tribunal in the case of Arati Engineering & Construction Co. (MA No.82/Kol/2018 dated 29-8-2018) (b) the Bangalore bench of Tribunal in the case of M/s Mini Life Sciences P Ltd vs. ITO (M P No.121/Bang/2020 dated 18.12.2020) (c) the Ahmedabad bench of Tribunal in the case of SmtManjulaben C Tomar vs. ITO (MA No.238/Ahd/2019 dated 21-04-2022) 8. Accordingly, we are of the view that the ex-parte order may be recalled under Rule 24 of Appellate Tribunal Rules, if the assessee demonstrates sufficient cause in not appearing before the Tribunal on the date of hearing of appeal. It is submitted that the assessee’s tax matters were entrusted to the auditors of M/s Jai Corp group and the assessee was under the bonafide belief that they will take care of the matter. Accordingly, it is stated that the assessee did not appear on the date of hearing. Even though, there is merit Ganesh Atmaram Mokashe 5 in the submissions made by the assessee, yet, as pointed out by Ld D.R, the assessee has also got responsibility to pursue the matter with the auditors. As submitted by Ld D.R, the assessee alone would have received notices issued by the ITAT. After handing over the said notices to the auditors, the assessee appears to have not followed the same. Hence, we are of the view that the assessee should be imposed a cost for being delinquent. Accordingly, we impose a cost of Rs.25,000/- (Rupees twenty five thousand) upon the assessee for being delinquent and the same shall be paid to the credit of Income tax department as other fees within two months from the date of receipt of this order. 9. Subject to the payment of above cost, we recall the impugned ex-parte common order dated 27-07-2016 passed in ITA No.4522/Mum/2014 and ITA No.4533/Mum/2014. The registry is directed to post both the appeals in the normal course under intimation to the parties. 10. In the result, both the miscellaneous applications of the assessee are allowed. Pronounced accordingly in the open Court on 22.5.2023. Sd/- Sd/- (PAVAN KUMAR GADALE) (B.R. BASKARAN) Judicial Member Accountant Member Mumbai; Dated : 22/05/2023 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(Judicial) 4. PCIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai