S.Latha, Coimbatore V. ACIT, Coimbatore

MA 80/CHNY/2023

AI Insights

The case revolves around the recall of an ex-parte order by the Income Tax Appellate Tribunal. Mrs. S. Latha, the appellant, initially faced an ex-parte dismissal of her appeal due to a two-day delay in filing and the absence of a condonation petition. The Tribunal's earlier decision was contested by Mrs. Latha, who, assisted by her son and a new Chartered Accountant, argued that her previous representative had failed to manage the appeal properly, leading to her unawareness of the dismissal until legal proceedings were initiated against her. The Tribunal considered precedents and the lack of a time limit for recall under Rule 24, ultimately deciding in favor of a rehearing on the merits of the case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133877 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-06-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 28-03-2023
• Other Referred Cases: PCIT Vs ITAT in WP No.2858 of 2019, Om Prakash Sangwan Vs ITO in ITA Nos.625 & 626 of 2018, M/s. Saravana Stocks Investments P. Ltd. vs. ACIT in M.A. No.174/Chny/2022
• Laws Referred To: Income Tax Act, Income Tax (Appellate Tribunal) Rules, 1963
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Bonafide belief; Reasonable cause; Condonation of delay
• Section: 143(3)

Judgement Text

आयकर अपीलीय अिधकरण ‘डी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ,ी मनोज कु मार अ0वाल ,लेखा सद5 एवं माननीय ,ी मनोमोहन दास, ाियक सद5 के सम9। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM, AND HON’BLE SHRI MANOMOHAN DAS, JUDICIAL MEMBER M.A. No.80/Chn y/2023 (In ITA No.1381/Chny/2017 (िनधा@रण वष@ / Assessment Year: 2012-13) Mrs. S.Latha Propx. M/s.Athika Infrastructure 49, T.V.Samy Road (East), R.S.Puram, Coimbatore-641 002. बनाम / V s . ACIT Non-Corporate Circle-2 Coimbatore. थायी लेखा सं. /जीआइ आर सं. /P AN / G I R No . AC D PL - 500 5-H (अ पीलाथ#/Appellant) : ($%थ# / Respondent) अपीलाथ# की ओरसे/ Appellant by : Ms. N.V. Lakshmi (Advocate)-Ld. AR $%थ# की ओरसे/Respondent by : Shri P. Sajit Kumar (JCIT) –Ld. Sr. DR सुनवाई की तारीख/Date of Hearing : 09-06-2023 घोषणा की तारीख /Date of Pronouncement : 12-06-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this Miscellaneous Application, the assessee seeks recall of ex-parte order passed by the Tribunal in captioned appeal ITA No.1381/Chny/2017 vide order dated 24.06.2019. Upon perusal of the order, it could be seen that the appeal of the assessee has been dismissed by the bench since the appeal was filed with a delay of 2 days and the assessee did not file any condonation petition. The appeal was thus termed as defective appeal and none appeared for M.A No.80/Chny/2023 - 2 - the assessee during hearing. Therefore, the appeal was held to be not maintainable and accordingly, dismissed. The Ld. AR, drawing attention to the petition, sought recall of the order and pleaded for another opportunity of hearing on merits. The Ld. AR referred to certain decisions to seek recall of the order under Rule 24 of Income Tax (Appellate Tribunal) Rules, 1963. 2. The Ld. Sr. DR opposed the plea of Ld. AR and submitted that the petition has been filed with a considerable delay of 1183 days and the assessee do not have any reasonable cause seeking recall of the order. The Ld. Sr. DR further submitted that the assessee did not appear even before learned first appellate authority and there are contradictions in the averment made by the assessee in the petition. Having heard rival submissions, the petition is disposed-off as under. 3. The reasons adduced by the assessee in the petition seeking condonation of delay as well as recall of the order are as under: - 1. The above appeal was disposed-off by the Hon'ble Tribunal by its order dated 24.06.2019. The appellant above named beg to present this application for recalling the said Order. 2. I, S.Latha, had filed the aforesaid appeal against the order of the Commissioner of Income Tax (Appeals) ['CIT (A)']-2, Coimbatore, who upheld the order of the assessing officer passed under section 143(3) of the Act dated 30.03.2015 for AY 2012-13. 3. I had preferred further appeal before the Hon'ble Income Tax Appellate Tribunal against the said order of the CIT(A). I state that I am an individual carrying out real estate business with the assistance of my husband Mr Sathishkumar K. I state that myself and my husband do not have much knowledge of Income-tax proceedings and compliances. I further state that, my husband was coordinating with some professionals and looking after all the works relating to accounting, audit and tax matters. 4. I state that the assessing officer completed the assessment vide his order dated 30.03.2015 determining a total income of Rs.4,05,40,660/-. I state that we had engaged one Mr. G Gokul, Chartered Accountant to take advice on further course of action pursuant to the order of the assessing officer. I state that I was advised to file an appeal before the Commissioner of Income Tax (Appeals) ['CIT(A)'] and the same was handled by the same Chartered Accountant. I state that I had given power of attorney to my Chartered Accountant to appear in the said case. I state that all the hearing notices were forwarded to the Chartered M.A No.80/Chny/2023 - 3 - Accountant and I was not aware of the fact that he did not represent the appeal before the CIT(A). I state that the appeal was dismissed ex-parte. On receipt of the order of the CIT(A), I had taken the order to my Chartered Accountant to understand the contents of the said order and to understand the further course of action. 5. I state that my Chartered Accountant advised that further appeal is to be filed. He had advised me to sign few documents and informed me that the appeal would be taken care by him. I state that since I did not have any knowledge of tax matters, I went by the advise of my Chartered Accountant. 6. I further state that my Authorized Representative discontinued his practice and started his own business. I was not aware of his discontinuance of his practice and I was under the bonafide impression that my Authorized Representative has been representing my case before this Appellate Tribunal. 7. I state that I had duly forwarded the hearing notices received to my Chartered Accountant under the bonafide belief that the case would be taken care by him. I state that I was totally unaware that he had not been representing the matters and had discontinued the practice. 8. I state that when the matter was taken up for hearing before this Hon'ble Tribunal, the matter was dismissed ex-parte since there was no representation for my case. I state that the non appearance of the Chartered Accountant was on account of reasons beyond my control. If further state that, the delay in filing the appeal before this Hon'ble Tribunal was also because of the Chartered Accountant. I reiterate that I was not even aware that the Chartered Accountant did not file the appeal on time, he did not appear for my case before this Hon'ble Tribunal and the fact that he had discontinued his practice. 9. I state that upon receipt of ITAT order in ITA No 1381/Chny/2017 dated 24.06.2019, I did not understand the contents of the order and I was advised that there was no further action required. 10. I state that in the meantime, the department had initiated prosecution proceedings on me under section 276C(2) of the Act. I state that I had received the copies of the complaint along with the order of all the authorities on 10.10.2022. But I was under the bonafide belief that the same was for the appeal filed before the Income Tax Appellate Tribunal. I state that even at this stage, I was only advised that there was nothing to be done. I state that I was under the bonafide belief that the appeal filed by me in ITA No 1381/Chny/2017 was pending till such date. 11. I state that recently my son Mr S Kubandiran had completed his studies. I state that since the case was pending for longtime, I had shown him the copies of the documents received on 10.10.2022 and asked him to read and explain the contents of the same. I state that only then I understood that the appeal in ITA NO 1381/Chny/2017 was dismissed long back and there was no proper representation for my case. 12. I state that my son had immediately consulted another senior Chartered Accountant, who advised that since appeal was dismissed ex-parte, a petition for recall the appeal is to be filed under the provisions of Rule 24 of the Income Tax Appellate Tribunal Rules. 13. I state that there is no time limit prescribed under Rule 24 of the Income Tax Appellate Tribunal Rules. I state that I was under the bonafide belief that the appeal was pending all these days. Only recently I came to know (through my son) that the appeal in ITA NO 1381/Chny/2017 was dismissed. Immediately on M.A No.80/Chny/2023 - 4 - knowing the same, I am filing the present petition to recall the order of this Hon'ble Tribunal in ITA NO 1381/Chny/2017 dated 24.06.2019. 14. I state that the failure to rectify the defect and represent the case was on account of failure of my Authorized Representative to communicate about the discontinuance of his practice and status of my case. I state that the aforesaid failure was not on account of any fault from my end. Hence I submit that the aforesaid reasons are bonafide and sufficient cause for non-appearance in the course of the proceedings before this Hon'ble Tribunal. 15. I state that it would not be in my interest to not prosecute the appeal or cure the defects in the appeal. The non appearance is only on account of the bona fide reasons stated above and is neither wilful nor wanton. I state that grave prejudice will be caused to me if the order of this Hon'ble Tribunal in ITA No. 1381 / Chny / 2017 dated 24.06.2019 is not recalled and the appeal is not heard on merits. Whereas, there would be no prejudice caused to the revenue if the order is recalled and appeal is heard on merits. I state that the balance of convenience is clearly in my favour. 16. In view of the aforementioned submissions, it is prayed that the Hon'ble Tribunal may be pleased to recall its order in ITA 1381 /Chny/2017 dated 24.06.2019 and post the case of the appellant for adjudication on merits and render justice.” Upon perusal of the pleadings, it could be gathered that the assessee was dependent on the services of a Chartered Accountant who left the practice subsequently. The assessee was not aware of the fact that the appeal was dismissed ex-parte. It was only when the prosecution proceedings were initiated against the assessee, the assessee came to know of this fact. Accordingly, the assessee is seeking recall of the ex-parte order under Rule 24 of Income Tax (Appellate Tribunal) Rules, 1963. This rule does not prescribe any time limit for recall of ex- parte order. This has been held by Hon’ble High Court of Bombay in the case of PCIT Vs ITAT in WP No.2858 of 2019 dated 24-01-2020 reported in 425 ITR 581 (Bom) as well as by Hon’ble High Court of Delhi in the case of Om Prakash Sangwan Vs ITO in ITA Nos.625 & 626 of 2018 dated 22-05-2018. Following these decisions, similar view has been taken by Chennai Tribunal in the case of M/s. Saravana M.A No.80/Chny/2023 - 5 - Stocks Investments P. Ltd. vs. ACIT in M.A. No.174/Chny/2022 dated 17.02.2023. A copy of all these decisions is on record. 4. Considering the ratio of these decisions as well as considering the principle of natural justice, we are inclined to accept the argument of Ld. AR particularly in view of the fact that there was only a minor delay of 2 days in the appeal. The appeal has been disposed-off ex- parte. Therefore, we recall the captioned appeal and restore the appeal back to its original status. The registry is directed to fix the appeal for fresh hearing before regular bench in due course after intimating both the sides. 5. The application stands allowed. Order pronounced on 12 th June, 2023. Sd/- (MANOMOHAN DAS) ाियक सद5 / JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद5 / ACCOUNTANT MEMBER चे5ई / Chennai; िदनांक / Dated : 12-06-2023. DS आदेश की Wितिलिप अ0ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3 आयकर आय ु त/CIT 4. वभागीय त न ध/DR 5. गाड फाईल/GF