GOLDSTONE TRADING CO P. LTD, V. JTCIT,

MA 425/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8195 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-05-2012
• Appeal Filed By: Assessee
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 11-08-2011
• Court: TRIBUNAL
• Department Lawyers: P K B MENON

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G BEFORE SHRI D. MANMOHAN (VP) & SHRI N.K. BILLAIYA ( AM) M.A. NO. 425/MUM/2011 IN I.T.A.NO. 4814/MUM/2008 (ASSESSMENT YEAR : 2005-06) GOLDSTONE TRADING CO. PVT. LTD. B-502, ASTER TOWER VASANT VALLEY COMPLEX-II GEN. A.K. VIDYA MARG MALAD EAST MUMBAI-400 097. VS. JCIT 15(3) MATRU MANDIR MUMBAI-400 007. APPELLANT RESPONDENT PAN/GIR NO. : AACCG1763B ASSESSEE BY : SHRI RAJIV KHANDELWAL DEPARTMENT BY : SHRI P.K.B. MENON DATE OF HEARING : 13.4.2012 DATE OF PRONOUNCEMENT : ORDER PER D.MANMOHAN (VP) :- BY THIS APPLICATION THE ASSESSEE SEEKS RECALL OF T HE ORDER DATED 27.4.2011 ON THE GROUND THAT NON-APPEARANCE ON THE DATE FIXED FOR HEARING IS SUPPORTED BY SUFFICIENT CAUSE. 2. IT MAY BE NOTICED THAT THE ASSESSEE PREFERRED AN APPEAL IN THE YEAR 2008 AND NOTICE SENT BY THE REGISTRY OF ITAT WAS RE TURNED UNSERVED. UNDER THE CIRCUMSTANCES, VIDE ORDER DATED 24.7.2009 , ITAT G BENCH MUMBAI DISMISSED THE APPEAL FILED BY THE ASSESSEE F OR WANT OF PROSECUTION. 3. A MISCELLANEOUS APPLICATION WAS MOVED BY THE ASS ESSEE IN 2010, WHICH WAS NUMBERED AS M.A. NO. 40/MUM/2010 WHEREIN IT WAS SUBMITTED THAT THE NOTICE SENT BY THE REGISTRY WAS NOT SERVED FOR NO FAULT OF THE ASSESSEE SINCE ORDER PASSED BY THE TRIBUNAL DISMISSING THE APPEAL WAS SERVED AT THE SAME ADDRESS. HAVING REGARD TO TH E CIRCUMSTANCES, THE GOLDSTONE TRADING CO. PVT. LTD. 2 TRIBUNAL RECALLED ITS EARLIER ORDER AND DIRECTED TH E REGISTRY TO POST THE APPEAL FOR FRESH HEARING. 4. ACCORDINGLY CASE WAS POSTED FOR HEARING ON NUMBE R OF OCCASIONS AND EVERY TIME ASSESSEES COUNSEL REQUESTED FOR ADJ OURNMENT, CITING DIFFERENT REASONS; ON 7.9.2010 ADJOURNMENT WAS SOUG HT ON THE GROUND THAT MR. RAJIV KHANDELWAL WAS OUT OF TOWN AND THE C ASE WAS ADJOURNED TO 3.11.2010, WHEREIN AGAIN THE ASSESSEE SOUGHT ADJ OURNMENT AND THE CASE WAS POSTED FOR HEARING ON 12.1.2011. ONCE AGAI N A REQUEST WAS MADE FOR ADJOURNMENT ON THE GROUND THAT THE COUNSEL IS SUFFERING FROM SLIPPED DISC. THEREAFTER ON 22.2.2011, IT WAS SUBMI TTED THAT COUNSEL WILL NOT BE ABLE TO ATTEND THE APPEAL ON ACCOUNT OF FAMI LY FUNCTION. SINCE CASE WAS ADJOURNED ON NUMBER OF OCCASIONS, CASE WAS FINA LLY POSTED FOR HEARING ON 6.4.2011 BY CLEARLY MENTIONING THAT IT I S A LAST CHANCE GIVEN TO THE ASSESSEES COUNSEL. HOWEVER, VIDE LETTER DAT ED 5.4.2011 LEARNED COUNSEL REQUESTED FOR ANOTHER DATE ON THE GROUND TH AT MR. RAJIV KHANDELWAL WOULD NOT BE ABLE TO ATTEND THE APPEAL O N ACCOUNT OF POOJA TO BE CONDUCTED AT HIS RESIDENCE ON ACCOUNT OF DEATH A NNIVERSARY OF HIS GRANDFATHER. SINCE IT WAS A RECALLED MATTER AND NUM BER OF ADJOURNMENTS WERE GRANTED, PARTICULARLY ON ACCOUNT OF THE FACT T HAT LAST CHANCE WAS GIVEN, THE BENCH REFUSED TO GRANT ADJOURNMENT AND B Y GIVING DETAILED REASONS IT DECIDED TO DISPOSE OF THE MATTER EXPARTE , QUA THE ASSESSEE. ELABORATE REASONS WERE GIVEN IN PARAGRAPH 2 OF ITS ORDER DATED 27.4.2011. IT IS NOT IN DISPUTE THAT THE APPEAL WAS DISPOSED OF ON MERITS. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT TH ERE WERE SUFFICIENT REASONS FOR NON-APPEARANCE ON THE DATE F IXED FOR HEARING AND HENCE MATTER DESERVES TO BE RECALLED UNDER RULE 24 OF THE APPELLATE TRIBUNAL RULES. IT WAS SUBMITTED THAT LEARNED AR WA S NOT AWARE OF THE DATE OF ANNUAL CEREMONY AS ON 21.2.2011 (DATE OF SE EKING ADJOURNMENT). THE BENCH HAVING ADJOURNED THE CASE TO 6.4.2011, ON 5.4.2011 LEARNED AR REQUESTED FOR FRESH DATE OF HEARING. LEARNED CO UNSEL SUBMITTED THAT FOR THE FAULT OF A COUNSEL ASSESSEE SHOULD NOT SUFF ER AND APPEAL OF THE ASSESSEE OUGHT NOT HAVE BEEN DISPOSED OF EX-PARTE. IN THIS REGARD HE RELIED UPON THE DECISION OF HON'BLE MADHYA PRADESH HIGH COURT IN THE GOLDSTONE TRADING CO. PVT. LTD. 3 CASE OF MAHAVIR PRASAD JAIN VS. CIT, 172 ITR 331. L EARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF HON'B LE MADRAS HIGH COURT IN THE CASE OF RAVI PRAKASH KHEMKA, 288 ITR 362. 6. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT THE ASSESSEE BEING A COMPANY, IT WAS AWARE OF THE STATUTORY OBLIGATIONS AND THE APPEAL HAVING BEEN DI SPOSED OF EXPARTE ON AN EARLIER OCCASION AND LATER RECALLED, ASSESSEE SH OULD BE MORE VIGILANT IN ENSURING ATTENDANCE OF COUNSEL IN A RECALLED MATTER THAT TOO WHEN A LAST CHANCE IS GIVEN. ONUS IS UPON THE ASSESSEE TO BE MO RE CAUTIOUS AND, IF NECESSARY, IT HAS TO TAKE SUITABLE ACTION AGAINST T HE COUNSEL FOR CASUAL HANDLING OF THE MATTER. IN OTHERWORDS, IN A RECALLE D MATTER, ASSESSEE CANNOT TAKE SHELTER ON THE GROUND OF BONAFIDE FAITH ON COUNSEL. IN FACT, THE BENCH PROCEEDED TO DISPOSE OF THE APPEAL EXPART E, QUA THE ASSESSEE, AFTER CONSIDERING THE CIRCUMSTANCES AND HENCE IT CA NNOT BE CONSIDERED TO BE A MISTAKE APPARENT ON RECORD. HE RELIED UPON THE FOLLOWING DECISIONS:- CIT VS. ITAT, 196 ITR 564 (ORISSA) 47 SOT 501 (HYD) 7. JOINING THE ISSUE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE DECISIONS CITED BY LEARNED DEPARTMENTAL REPRESE NTATIVE ARE DISTINGUISHABLE ON FACTS. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. 9. AT THE OUTSET WE MAY REFER TO THE DECISION OF HO N'BLE BOMBAY HIGH COURT IN THE CASE OF CHEMIPOL VS. UOI, WHEREIN THE COURT OBSERVED THAT THOUGH THE ACT DOES NOT GIVE ANY POWER OF DISMISSAL , IT IS A AXIOMATIC THAT NO COURT OR TRIBUNAL IS SUPPOSED TO CONTINUE A PROCEEDING BEFORE IT, WHEN THE PARTY WHO HAS MOVED IT HAS NOT CARED TO RE MAIN PRESENT; IF A PARTY IS NOT PRESENT, A CONSTITUTIONAL BODY IS UNDE R NO OBLIGATION TO KEEP THE MATTER PENDING BEFORE IT OR TO PURSUE THE MATTE R ON BEHALF OF THE PARTY WHO HAD INSTITUTED THE PROCEEDINGS, SINCE THA T IT NOT THE FUNCTION OF THE TRIBUNAL. HON'BLE JURISDICTIONAL HIGH COURT FURTHER OBSERVED THAT GOLDSTONE TRADING CO. PVT. LTD. 4 UNLESS THE STATUTE CLEARLY REQUIRES THE TRIBUNAL TO HEAR THE APPEAL AND DECIDE IT ON MERITS, IT CAN DISMISS THE APPEAL FOR NON-PROSECUTION. HON'BLE COURT HAS REFERRED TO THE DECISION OF HON'B LE APEX COURT IN THE CASE OF CHENNIAPPA MUDALIAR (74 ITR 41) IN THIS REGARD. IN FACT RULE 24 OF THE APPELLATE TRIBUNAL RULES PROVIDES THAT IF A PAR TY HAS NOT REPRESENTED THE CASE ON THE DATE FIXED FOR HEARING, THE TRIBUNA L IS ENTITLED TO DISPOSE OF THE APPEAL EX-PARTE, ON MERITS; THE APPELLANT HO WEVER MAY SEEK RECALL OF THE EX-PARTE ORDER ONLY UPON PROVING BUT THERE W AS SUFFICIENT CAUSE FOR NON-APPEARANCE. THUS ONUS IS UPON THE ASSESSEE TO P ROVE THAT THERE WAS SUFFICIENT CAUSE. 10. IN THE CASE OF MAHAVEER PRASAD JAIN, HON'BLE MA DHYA PRADESH HIGH COURT (172 ITR 331)(INDORE BENCH) HAD TAKEN NO TE OF CERTAIN OBSERVATIONS MADE BY HON'BLE SUPREME COURT IN THE CASE OF RAFIQ VS. MUNSHILAL (AIR 1981 SC 1400) TO HOLD THAT IF AN APP LICANT HAD ENGAGED A COUNSEL, HE IS JUSTIFIED IN PRESUMING THAT HE WOULD ATTEND TO THE CASE AND THE APPLICANT CANNOT BE MADE TO SUFFER FOR THE NEGLIGENCE OF THE COUNSEL. HON'BLE HIGH COURT HAS NOT ELABORATED THE CIRCUMSTANCES UNDER WHICH COUNSEL WAS NOT PRESENT OR WHY PARTY HAS ASSU MED THAT THE COUNSEL WOULD TAKE CARE OF THE CASE PROPERLY. WITH UTMOST RESPECT WE MAY OBSERVE THAT HON'BLE MADHYA PRADESH HIGH COURT MERELY REPRODUCED THE FACTS IN THE CASE OF RAFIQ VS. MUNSH ILAL TO RESTORE THE MATTER WITHOUT ANALYSING THE FACTS BEFORE THEM. THE REFORE IT IS FOR US TO LOOK INTO THE OBSERVATIONS IN THE CASE CITED SUPRA. HON'BLE APEX COURT OBSERVED AS UNDER:- THE PARTY MAY BE A VILLAGER OR MAY BELONG TO A RUR AL AREA AND MAY HAVE NO KNOWLEDGE OF THE COURTS PROCEDURE. AFT ER ENGAGING A LAWYER, THE PARTY MAY REMAIN SUPREMELY CONFIDENT TH AT THE LAWYER WILL LOOK AFTER HIS INTEREST. AT THE TIME OF THE H EARING OF THE APPEAL, THE PERSONAL APPEARANCE OF THE PARTY IS NOT ONLY NOT REQUIRED BUT HARDLY USEFUL. THEREFORE, THE PARTY HA VING DONE EVERYTHING IN HIS POWER TO EFFECTIVELY PARTICIPATE IN THE PROCEEDINGS CAN REST ASSURED THAT HE HAS NEITHER TO GO TO THE H IGH COURT TO INQUIRE AS TO WHAT IS HAPPENING IN THE HIGH COURT W ITH REGARD TO HIS APPEAL NOR IS HE TO ACT AS A WATCHDOG OF THE AD VOCATE THAT THE LATTER APPEARS IN THE MATTER WHEN IT IS LISTED. IT IS NO PART OF HIS JOB. GOLDSTONE TRADING CO. PVT. LTD. 5 11. IN OUR CONSIDERED OPINION PROCEEDINGS UNDER THE INCOME TAX ACT STAND ON A DIFFERENT FOOTING. THE ASSESSEE IS A COM PANY AND REGULAR TAX PAYEE. AN ORDINARY CITIZEN MAY NOT BE AWARE OF THE LITIGATION AND ITS NUISANCES AND MAY HAVE TO FACE CIVIL OR CRIMINAL PR OCEEDINGS ONCE IN A LIFE TIME AND IN SUCH CASE A VILLAGER OR A PERSON F ROM RURAL AREA - AS RIGHTLY OBSERVED BY HON'BLE APEX COURT - MAY HAVE T O COMPLETELY DEPEND UPON THE COUNSEL AND IF, THERE IS ANY NEGLIGENCE ON BEHALF OF THE COUNSEL IT MAY NECESSITATE ACTION AGAINST SUCH COUNSEL. HOW EVER, IN THE INCOME TAX PROCEEDINGS, A CORPORATE ASSESSEE IS ORDINARILY AWARE OF A STAND TAKEN BEFORE THE TRIBUNAL AND EITHER CONSULTANT APP OINTED OR DIRECTOR CONCERNED WOULD BE IN CLOSE TOUCH WITH THE COUNSEL TO EXPLAIN FACTS OF THE CASE. OUR EXPERIENCE IN THIS FIELD IS THAT IN N UMBER OF CASES PARTIES ARE MORE VIGILANT THAN SOME OF THE NOT SO REGULAR COUNSELS. ADDED TO THAT WHEN THE APPEAL WAS DISMISSED EX-PARTE ON 24.7 .2009 THE DIRECTOR OF THE ASSESSEE-COMPANY HAD TO PAY INSTITUTION FEES AND FILED A MISCELLANEOUS APPLICATION SEEKING RECALL OF EARLIER ORDER WHICH WOULD HAVE MADE THE COMPANY VIGILANT ENOUGH AND TO REALIS E THAT IT HAS TO ENSURE PROPER ATTENDANCE AND CANNOT SIMPLY RELY UPO N THE COUNSEL. WHEN THE FIRST ORDER WAS RECALLED BY THE BENCH AND SPECIFIC DATE IS GIVEN, AT LEAST AT THAT STAGE, THE ASSESSEE SHOULD HAVE BE EN VIGILANT ENOUGH TO PURSUE AS TO WHY THE CASE HAS NOT BEEN TAKEN UP FOR HEARING. ON 22.2.2011 WHEN THE ASSESSEES COUNSEL SOUGHT ADJOUR NMENT, THE BENCH SPECIFICALLY MENTIONED IN THE ORDER-SHEET THAT NO F URTHER OPPORTUNITY WOULD BE GIVEN AND ANNOUNCED THE FRESH DATE OF HEAR ING WITH SPECIFIC MENTION THAT IT IS A LAST CHANCE. IF IT IS A CALA MITY OR SUDDEN ILL HEALTH IT CAN BE CONSIDERED AS A RARE CIRCUMSTANCE TO GRANT F URTHER ADJOURNMENT BUT, HERE IS A CASE WHERE THE COUNSEL SEEKS ADJOURN MENT ON THE GROUND THAT THERE IS A POOJA AT HIS RESIDENCE ON ACCOUNT O F DEATH ANNIVERSARY OF HIS GRANDFATHER. DATES OF ANNUAL CEREMONIES ARE KNO WN IN ADVANCE AND HE SHOULD NOT HAVE ACCEPTED THAT DATE. THUS HE HAD NO RIGHT TO SEEK ADJOURNMENT PARTICULARLY WHEN LAST CHANCE IS GIVEN AND HE SHOULD HAVE INFORMED THE PARTY ACCORDINGLY OR HE SHOULD HAVE RE QUESTED THE BENCH ON 22.2.2011 ITSELF FOR A DIFFERENT DATE. THE ASSES SEE HAS NEVER MADE SUCH REQUEST ON 22.2.2011 AND MERELY FILED AN APPLI CATION IN THE EVENING OF THE PREVIOUS DAY I.E. ON 5.4.2011. IN THE BACKDR OP OF THE GOLDSTONE TRADING CO. PVT. LTD. 6 CIRCUMSTANCES, THE BENCH WAS OF THE VIEW THAT NEITH ER THE ASSESSEE NOR THE COUNSEL IS INTERESTED IN PURSUING THE MATTER. H OWEVER BEARING IN MIND THE PROCEDURE PRESCRIBED UNDER RULE 24 AND ALS O IN THE LIGHT OF THE DECISION OF HON'BLE BOMBAY HIGH COURT (SUPRA) THE A PPEAL WAS DISPOSED OF EX-PARTE AFTER HEARING LEARNED DEPARTMENTAL REPR ESENTATIVE. SINCE THE BENCH HAS DISCUSSED THE REASONS GIVEN IN THE PETITI ON ELABORATELY, WHILE DISPOSING THE APPEAL EX-PARTE, IT CANNOT NOW BE SAI D THAT THE SAME REASON CONSTITUTE SUFFICIENT CAUSE FOR NON-APPEARAN CE, SO AS TO INVOKE PROVISO TO RULE 24 OF THE INCOME TAX (APPELLATE TRI BUNAL) RULES, 1963. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH IS IS NOT A FIT CASE FOR INVOKING THE SAID RULE AND WE DO NOT FIND ANY INFIR MITY IN THE ORDER PASSED BY THE TRIBUNAL ON MERITS AND HENCE THERE IS NO MISTAKE APPARENT ON RECORD SO AS TO CONSIDER THE SAME UNDER RULE 24. 12. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS REJECTED. ORDER HAS BEEN PRONOUNCED ON 2 ND DAY OF MAY, 2012. SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER SD/- (D. MANMOHAN) VICE-PRESIDENT DATED : 2 ND MAY APRIL, 2012. COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS