The Ayali Kalan Co-op Agriculture Multi, Ludhiana V. Income Tac Officer, Ludhiana

MA 83/CHANDI/2016

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6352 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 year(s) 1 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 15-10-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice; Reasonable cause; Wrong claim; Set aside
• Section: 56; 271(1)(c); 143(3); 80P; 254(2); 2(19)

Judgement Text

आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ “एस.एम.सी” , च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH (VIRTUAL COURT) ᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य BEFORE: SHRI. VIKRAM SINGH YADAV, AM Miscellaneous Application No. 83/Chd/2016 In आयकर अपील सं./ ITA NO. 259/Chd/2016 िनधाᭅरण वषᭅ / Assessment Year : 2009-10 The Ayali Kalan Co-op Agriculture Multipurpose Society Ltd. VPO- Ayali Kalan, Ludhiana बनाम The ITO Ward III(3) Ludhiana ̾थायी लेखा सं./PAN NO: AAECV5250E अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri Parveen Jindal, CA राज᭭व कᳱ ओर से/ Revenue by : Shri Dharamvir, JCIT, Sr. DR सुनवाई कᳱ तारीख/Date of Hearing : 16/10/2023 उदघोषणा कᳱ तारीख/Date of Pronouncement : 19/10/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : The present Miscellaneous Application has been filed by the Assessee against the order passed by the Coordinate Bench dt. 05/07/2016 in ITA No. 259/Chd/2016 for Assessment Year 2009-10. 2. During the course of hearing the Ld. AR taken us through the Miscellaneous Application filed by the Assessee dt. 02/08/2021 and the contents thereof read as under: “Sub.: Modification of M.A. No. 83/Chd/2016 for setting aside ex-parte order dated 05/07/2016 in Appeal No. IT/259/CHD/2016 for the A.Y. 2009-10 and restoration of the appeal under Rule 24 of the ITAT Rules in the matter of The Avali Kalan Co-op. Agricultural Multipurpose Society Ltd., VPO-Ayali Kalan, Ludhiana Vs. ITO, Ward- III(3), Ludhiana In compliance with the directions of the Hon'ble Tribunal during the hearing held on 17/06/2021, the modified Miscellaneous Application for restoration of the above said appeal is submitted as under 2 1. That the Appellant has filed an appeal before this Tribunal against the order of the CIT (APPEALS)-1, Ludhiana for the A.Y. 2009-10. The appeal was filed on 23/03/2016 by the Appellant through its authorised Chartered Accountant, namely O.P. Garg & Co., Chartered Accountants having its office at B-XIX-643/2, Malerkotla House, Ludhiana. Power of Attorney in favour of the said firm of chartered accountants was also attached with the appeal documents/papers filed with this Hon'ble Tribunal. 2. That the first hearing in the appeal was fixed on 22/06/2016 as per the auto- generated Acknowledgement-cum-Notice dated 23/03/2016. 3. That the appellant was under the bone fide belief that the matter will be taken care of by our Counsel. 4. That as our Counsel namely CA. Manish K. Gupta was scheduled to leave the country on 16/06/2016, he sent a letter dated 15/06/2016 to this Hon'ble Tribunal and requested for adjournment of the hearing to a convenient date after 15/07/2016. The letter was sent through Fax and a copy of the same was also sent through speed-post on 16/06/2016. However, the Hon'ble Tribunal adjourned the hearing to 04/07/2016 although the request was made to adjourn the hearing after 15/07/2016. 5. That the Counsel of the assessee namely Sh. Manish K. Gupta was scheduled to return India on 02/07/2016 (Saturday night) and therefore it was felt that he will not be having sufficient time to prepare for hearing fixed for 04/07/2016 and accordingly a request was made for short adjournment by CA. Parveen Jindal vide letter dated 30/06/2016. This letter was sent to the Hon'ble Tribunal through Fax as well as speed-post on 30/06/2016 itself stating that CA. Manish K. Gupta who is conversant with the matter is out of the country and requested for adjournment to a convenient date after 20/07/2016. 6. That the Counsel was under a bona fide belief that the adjournment will be granted by this Hon'ble Tribunal and therefore in these circumstances, the Counsel/Assessee did not appear before this Hon'ble Tribunal on 04/07/2016 and the appeal was dismissed ex-parte on merits in the absence of the assessee/authorised representative vide order dated 05/07/2016. 7. That the Applicant/Petitioner is conscious of the fact that the order dated 05/07/2016. 7. That the Applicant / Petitioner is conscious of the fact that the order dated 05/07/2016 was ex-parte order on merits but the fact remains that the same was passed by the Hon’ble Tribunal in the absence of the appellant. While rejecting the adjournment request for the hearing fixed for 04/07/2016, the Hon’ble Tribunal has observed in Para-5 of the order that- "The request for adjournment is unnecessary and without substance. The request is made by Shri Parveen Jindal for adjournment who has appeared before ld. CIT(Appeals) and argued the appeal. Therefore, he himself is conversant with the matter and further his Power of Attorney duly signed by him is also available in record. Therefore, there is no reason for seeking adjournment in the matter. The request for adjournment was, therefore, found unnecessary and incorrect. The same is, therefore, rejected." 3 Your Honor, in response to the above observation of this Hon'ble Tribunal, the Applicant wish to state as under: i) Although, it has been correctly observed by the Hon'ble Tribunal at Para-5 of the order dated 05/07/2016 that Shri Parveen Jindal appeared before the CIT(Appeals) in the matter yet the fact remains that he was not fully conversant with the matter. Although, he appeared before the CIT(Appeals) but the replies before the CIT(Appeals) were made and signed by the Counsel i.e. Sh. Manish K. Gupta, Chartered Accountant. Copies of replies dated 20/01/2016 & 21/01/2016 as made before the Ld. CIT(Appeals) are enclosed for your perusal and ready reference as Annexure-1. (Page. No. 1-13) Therefore, considering these facts, the adjournment request for hearing fixed for 04/07/2016 was made for just and reasonable cause. Affidavit of CA. Parveen Jindal inter alia stating that he was not fully conversant with the matter is enclosed as Annexure-2. (Page. No. 14) ii) That the appellant/Counsel had no mala fide intention in seeking adjournment of the hearing fixed for 04/07/2016 and a request was made for short adjournment of the hearing after 15/07/2016. It may be reiterated that 22/06/2016 was the first date of hearing as per the auto-generated Acknowledgement-cum-Notice dated 23/03/2016. The Applicant/Appellant sought first adjournment for the hearing fixed for 22/06/2016 through letter dated 15/06/2016 for a convenient date after 15/07/2016 as CA. Manish K. Gupta who was conversant with the matter was scheduled to leave the country on 16/06/2016. However, this Hon'ble Tribunal adjourned the appeal to 04/07/2016. 8. That the assessee remained unrepresented for no fault of its own. It is prayed that the litigant should not suffer for the default/mistake, if any, of our Authorised Representative/Chartered Accountant. 9. That in view of the above circumstances, there is a sufficient cause within the meaning of Rule 24 of ITAT Rules for setting aside the ex-parte order. The word 'sufficient cause' must receive a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bonafides is imputable to the appellant, as observed by the Hon'ble Supreme Court in the case of Dinabandhu Sahu Vs. Jadumoni Mangaraj and Others (1954 AIR 411). The applicant/appellant was not given sufficient opportunity to support his contention as to why penalty confirmed by the order dated 29/01/2016 of the ld. CIT(A), Ludhiana is ought to be deleted. 1 10. That the assessee has a very strong case on the merits of the matter and is fully confident that in case the appeal is restored, it will be decided in its favour. It is pertinent to mention that the similar appeal of the assessee for the subsequent assessment year i.e. A.Y. 2010-11 has already been decided in favour of the assessee by this Hon'ble Tribunal vide order dated 26/11/2020 in ITA No. 880/Chd/2016. Copy of the order is enclosed as Annexure-3. (Page. No. 15-18) 11. That the applicant-assessee is a Co-operative Society within the meaning of Section 2(19) of the Income-tax Act, 1961. It is a Primary Agricultural Co-operative Society and has been registered under The Punjab State Co-operative Societies Act. The assessee is purely an Agriculture Credit Society and its main objective is 4 to provide short/medium/long term credit facilities for agricultural activities to its members only. The ld. CIT(A) has observed in her order dated 29/01/2016 confirming the levy of penalty u/s 271(1)(c) of the Act that the assessee has consciously and deliberately claimed wrong deduction u/s 80P for interest received on deposits with banks other than co-operative banks in view of the order dated 25/11/2011 of the Hon'ble Tribunal in the case of the assessee for the A.Y. 2007-08. The ld. CIT(A) further observed in the penalty order that the interest income from deposits with non co-operative banks is not a business income and the same is taxable as 'Income from other sources' u/s 56 of the Act. The assessee contends that it has not deliberately or wilfully claimed wrong deduction u/s 80P(2)(a)(i) for the A.Y. 2009-10 in respect of interest on FDRs with banks other than co-operative banks due to the reason that at the time of filing ITR for the A.Y. 2009-10 on 30/09/2009, it had neither the privilege of the order of the Hon'ble Tribunal for the A.Y. 2007-08 which was passed on 25/11/2011 nor the order of the ld. CIT(A)-1, Ludhiana u/s 143(3) for the A.Y. 2007-08 confirming the action of the AO for disallowing claim of the assessee for deduction u/s 80P(2)(a)(i) of the Act in respect of interest received on FDR's with banks other than co-operative banks. The said order by the ld. CIT(A)-1. Ludhiana in quantum addition for the A.Y. 2007-08 was passed on 27/01/2011 but the ITR for the A.Y. 2009-10 was filed on 30/09/2009. The applicant- assessee contends that even the assessment order of the AO u/s 143(3) for the A.Y. 2007-08 was passed on 21/12/2009 i.e. after the date of filing the ITR for the A.Y. 2009-10 (filed on 30/09/2009) in which the assessee claimed deduction u/s 80P for interest received on deposits with banks other than cooperative banks. Moreover, the assessee was claiming the deduction for interest paid on FDRs with banks other than co-operative banks since very long and the same was being allowed. However, for the first time during the assessment proceedings for the A.Y. 2007-08, AO took a different view and held that interest earned on such fixed deposits cannot be considered as business income and accordingly deduction u/s 80P(2)(a)(i) was disallowed. Copy of ITR for the A.Y. 2009-10 and copy of Order dated 25/11/2011 of the Hon'ble ITAT. Chandigarh for the A.Y. 2007-08 are enclosed as Annexure-4. (Page. No. 19-23) 12. That the Hon'ble Chandigarh Tribunal vide order dated 25/11/2011 for the A.Y. 2007-08 while disposing the Revenue's appeal has not decided the issue whether interest received by the assessee-society from banks other than co-operative banks is eligible for deduction u/s 80P of the Act. In fact, the assessee has not preferred any appeal before this Hon'ble Tribunal against the order dated 27/01/2011 of the Ld. CIT(A)-1, Ludhiana for the A.Y. 2007-08 wherein it was held that assessee-society is not eligible for deduction u/s 80P of the Act on interest income on the FDR's kept with banks other than co-operative banks. The Hon'ble Tribunal while disposing the Revenue's appeal for the A.Y. 2007-08 vide its order dated 25/11/2011 has held that only net income from interest received and not the gross receipt of interest is taxable. The Hon'ble Tribunal observed that only that much of interest paid which has direct nexus with the interest received is to be excluded from the interest received. 13. That the applicant contends that the issue related to allowance of deduction u/s 80P(2)(a)(i) in respect of interest received on deposits with banks other than 5 co-operative banks is a debatable issue. This Hon'ble Tribunal (ITAT, Chandigarh) in the case of The Tiara Co-op. Agricultural Service Society Ltd. Vs. ITO, Dharamshala vide recent decision dated 01/05/2018 (ITA No. 905 to 908/Chd/2017) has allowed the deduction of interest received from Nationalized Bank (non-co-operative bank) u/s 80P(2)(a)(i) of the Act. In this context, the applicant contends that in the case of Tiara Co-op. Agricultural Service Society (supra), it has also earned interest on FDR's with banks and the same was allowed u/s 80P(2)(a)(i) of the Act. The findings of this Hon'ble Tribunal at Para-19 of the above order dated 01/05/2018 are as under: "19. Thus we hold that where the FDR'S in banks are made from the operational funds of the cooperative society while carrying out its activity of providing credit to its members, the interest earned thereon being incidental to carrying out the said activity, is attributable to the said activity and hence entitled to deduction Ws 80P(2)(a)(i) of the Act." Further, this Hon'ble Tribunal in the case of ACIT, Chandigarh Vs. Punjab State Fed of Coop. House Building Society Ltd., Chandigarh (ITA No. 1010/Chd/2012) vide decision dated 18/12/2012 has confirmed the action of the Ld. CIT(A) wherein the penalty levied for wrong claim of deduction u/s 80P(2)(d) was deleted and the Revenue's appeal on the matter was dismissed. The copies of the order of this Hon'ble Tribunal in the case of The Tiara Co-op. Agricultural Service Society Ltd. (Page. No. 24-41) and in the case of Punjab State Fed of Coop House Building Society Ltd. (supra) are being enclosed as Annexure- 5. (Page. No. 42-43) 14. That it is pertinent to mention that this Hon'ble Tribunal in the case of assessee itself (as stated in para-10 above), for the subsequent assessment year i.e. A.Y. 2010-11 has already been decided the similar matter in favour of the assessee vide order 26/11/2020 in ITA No. 880/Chd/2016 and deleted the penalty for wrong claim of deduction u/s 80P(2)(d). 15. That what the Applicant/Petitioner wants is only an opportunity to put-forth its case on merits by setting aside the ex-parte order, no harm is going to be caused to the respondents. The principles of natural justice also demands that sufficient opportunity be given to the appellant to state its case on merits. 16. That the Applicant/Petitioner also derives support from decisions of various Courts/Tribunals wherein it was held that ex-parte order on merits is required to be set aside under Rule-24 of the ITAT Rules, if sufficient cause exists for the absence of the appellant on the date of hearing. Copies of the judgements are enclosed as Annexure-6 of this modified application. (Page. No. 44-66) 17. That the applicant/appellant has also submitted affidavits of the Secretary of the assessee-society and its Counsel namely CA. Manish K. Gupta giving the reasons as to why the adjournment was sought for the hearing fixed for 04/07/2016. Affidavit of CA. Manish K. Gupta along with the copy of his passport showing that he was out of India from 16/06/2016 to 02/07/2016 was submitted during the hearing held on 15/12/2017. Affidavit of Sh. Sukhdeep Singh, Secretary 6 of the assessee-society was submitted vide letter dated 12/09/2019 submitted on 16/09/2019. Copy of the above letter dated 12/09/2019 along with affidavit of Sh. Sukhdeep Singh and CA. Manish K. Gupta along with copy of his passport are again enclosed as Annexure-7. (Page. No. 67-72) 18. Brief Synopsis of the matter are being enclosed as Annexure-8. (Page. No. 73- 74) PRAYER It is therefore most humbly prayed that the Hon'ble Tribunal may be pleased and gracious enough to set aside the ex-parte order passed by the Tribunal in ITA No. IT/259/CHANDI/2016 dated 05/07/016 and it is further prayed that the appeal be restored in the interest of justice.” 3. Per contra, the Ld. DR taken us through the written submission filed by the Revenue dt. 07/07/2022 and the contents thereof read as under: “Sub:- Appeal before the Hon'ble ITAT, Chandigarh in the case of The Ayali Kalan Co-op. Agriculture Multipurpose Society Ltd. for M.A. 83/Chd/2016 for the A.Y. 2009-10: Reg.- Kindly refer to the Assessee's letter dated 02.08.2021 related to the Modification of the M.A. cited above. 2. In this regard, it is mentioned that the Assessee in the above mentioned letter had prayed that the Hon'ble Tribunal may set aside the ex-parte order passed by the Tribunal in ITA No. 259/Chd/2016 dated 05.07.2016 on various grounds as mentioned in the said letter. 3. In this regard, it is submitted that the Hon'ble ITAT Tribunal, Chandigarh in its Order dated 05.07.2019 in ITA No. 259/Chd/2016 in Para 5 has mentioned which is reproduced as under: "5. None appeared on behalf of the assessee at the time of hearing of the appeal. On the last date of hearing fixed on 22.06.2016, appeal was adjourned on the request of the assessee to 04.07.2016. On 04.07.2016, none appeared and a request has been received through FAX from Shri O.P. Garg & Co. (Chartered Accountant Shri Praveen Jindal) making a request for adjournment because the counsel Shri Manish K. Gupta conversant with the matter is still out of India. The request for adjournment is unnecessary and without substance. The request is made by Shri Praveen Jindal for adjournment who has appeared before ld. CIT(Appeals) and argued the appeal. Therefore, he himself is conversant with the matter and further his Power of Attorney duly signed by him is also available on record. Therefore, there is no reason for seeking adjournment in the matter. The request for adjournment was, therefore, found unnecessary and incorrect. The same is, therefore, rejected." 7 This clearly establishes that the Shri Parveen Jindal chose not to appear before the Hon'ble ITAT on 04.07.2016 despite having Power of Attorney, though he was well aware that 04.07.2016 was fixed as the Next Date of Hearing. Further, the assessee himself admits that Shri Parveen Jindal appeared before the Ld. CIT (Appeals). It is further stated that Ld. CIT(A) has also mentioned in his Order dated 29.01.2016 that Sh. Parveen Jindal, AR was present for the appellant. Hence it is untenable to hold that he was not fully conversant with the matter. Hence, this M.A. is frivolous and needs to be dismissed. 4. It is further stated that the Hon'ble ITAT while disposing off assessee's appeal ex- parte, has neither committed any wrong or error which can be rectified under section 254(2) of the Act. As discussed earlier, assessee's appeal though was heard ex-parte, however, it was decided on merits on the basis of facts and material available on record. Rule-24 of the Income Tax (Appellate) Tribunal Rules, 1963, empowers the Tribunal to decide the appeal filed by the appellant ex-parte if the appellant does not appear in person or through an authorised representative when the appeal is called for hearing. However, the Tribunal has to decide the appeal on merit. Thus, a reading of section 254(2) of the Act along with rule 24 of the ITAT rules would make it clear that the Tribunal can recall an appeal order under two situations. Firstly, if there is a mistake apparent on the face of record as per section 254(2) and secondly, if the appeal order is passed ex-parte, the Tribunal can recall it under rule 24 of the ITAT rules if it is satisfied that the non- compliance of the assessee was for sufficient cause. Therefore, the recall of the appeal order is not automatic but bound by certain conditions. In the facts of the present case, apparently, there is no mistake in the order of the Tribunal as envisaged under section 254(2) of the Act. Therefore, only provision under which the order could have been recalled is rule 24 of the ITAT rules subject to fulfilment of the conditions prescribed thereunder. After considering the facts stated in M.A., it is certain that the non-appearance of the Counsel before the Tribunal on 04.07.2016 was not due to sufficient cause as C.A. Parveen Jindal despite having Power of Attorney and well aware of the Date of the Hearing i.e. 04.07.2016 didn't appear before the Hon'ble ITAT Bench. 5. It is further prayed that the argument of the assesse that the Counsel was under a bona fide belief that the adjournment will be granted by the Hon'ble Tribunal is unjustifiable. Merely applying for adjournment does not adjourn the matter as adjournment is the sole discretion of the Hon'ble ITAT Bench as stated in Rule-32 of the Income-tax (Appellate Tribunal) Rules,1963: “32. The Tribunal may, on such terms as it thinks fit, and at any stage, adjourn the hearing of the appeal." 6. Therefore, considering the above facts, the Hon'ble ITAT Tribunal is requested to dismiss the said M.A.” 4. In his rejoinder, the Ld. AR drew our attention to the submission dt. 25/07/2022 and the contents thereof read as under: Subject: Submissions in the matter of objections of the Revenue to the Misc. Application No. 83/Chd/2016 for Restoration of Appeal No. ITA/259/Chd/2016 for 8 the A.Y. 2009-10 in case of The Ayali Kalan Co-operative Agricultural Multipurpose Society Ltd. (Fixed for 08/08/2022) The Revenue has filed objections dated 07/07/2022 to the Misc. Application No. 83/Chd/2016 as filed by the Applicant namely The Ayali Kalan Co-op. Agricultural Multipurpose Society Ltd. for set aside of ex-parte order dated 05/07/2016 in ITA No. ITA/259/Chd/2016 for the A.Y. 2009-10. Your Honor, the applicant submits hereunder cross objections to the objections filed by the Revenue: 1) That the assessee filed the appeal on 23/03/2016 and the first hearing in above appeal no. ITA/259/Chd/2016 was fixed on 22/06/2016 as per the auto-generated Acknowledgement-cum-Notice dated 23/03/2016. 2) That the Counsel CA. Manish K. Gupta who was conversant with the matter was scheduled to leave the country on 16/06/2016 and he sent a letter dated 15/06/2016 to this Hon'ble Tribunal requesting for short adjournment of the hearing fixed for 22/06/2016 to a convenient date after 15/07/2016. However, the Tribunal adjourned the hearing to 04/07/2016. It may be clarified that the assessee has not requested for adjournment of the hearing fixed for 22/06/2016 as noted in Para-5 of the ex-parte order dated 05/07/2016 and adjournment request was sent in advance through Fax & Speed-post on 16/06/2016. 3) That it is not disputed that Sh. Parveen Jindal, AR appeared before the Ld. CIT(A), as also noted by the Ld. Sr. DR, during appellate proceedings but he was not fully. conversant with the matter at that time. The replies before the CIT(Appeals) were made and signed by the Counsel i.e. CA. Manish K. Gupta. Copies of replies dated 20/01/2016 & 21/01/2016 as made before the Ld. CIT(Appeals) during appellate proceedings alongwith affidavit of CA. Parveen Jindal have already been submitted before this Hon'ble Tribunal vide modified M.A. dated 02/08/2021. It may be clarified that although, CA. Parveen Jindal appeared before the CIT (Appeals) but he was not fully conversant with the matter. The replies before the CIT (Appeals) were made and signed by the Counsel i.e. CA. Manish K. Gupta. 4) That the Ld. Sr. DR has noted in the objections dated 07/07/2022 that the M.A. filed by the Applicant is frivolous. In connection with the above observation, it may be stated that the appeal as well as the M.A. filed by the assessee is not frivolous. The assessee is a co-operative society within the meaning of Section 2(19) of the Income Tax Act, 1961 and has been registered under The Punjab State Co-operative Societies Act and its main objective is to provide credit facilities for agricultural activities to its members only. The assessee remained unrepresented for no fault of its own. It is pertinent to mention that this Hon'ble Tribunal in the case of Applicant-assessee itself for the subsequent assessment year 2010-11 has already been decided the similar matter in the related appeal in favour of the assessee vide order 26/11/2020 in ITA No. 880/Chd/2016 and deleted the penalty for wrong claim of deduction u/s 80P(2)(d) of the Act. Hence, the M.A. and the related appeal filed by the assessee is not frivolous as noted by the Ld. Sr. DR. 5) That what the Applicant/Petitioner wants is only an opportunity to put-forth its case on merits by setting aside the ex-parte order and no harm is going to be 9 caused to the respondent if the appeal is restored. The principles of natural justice also demands that sufficient opportunity be given to the appellant to state its case on merits. 6) That 22/06/2016 was the first date of hearing fixed through auto generated Acknowledgement-cum-notice dated 23/03/2016. The assessee has sought the first adjournment of the hearing fixed for 22/06/2016 solely for the reason that CA. Manish K. Gupta who was conversant with the matter was out of the country and the other Counsel namely CA. Parveen Jindal was not fully conversant with the matter in appeal and accordingly, in these circumstances, the request for short adjournment was made well in advance for adjournment of the hearing fixed for 22/06/2016. Hence, there was a sufficient cause within the meaning of Rule 24 of ITAT Rules for setting aside the ex-parte order. The word 'sufficient cause' must receive a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bonafides is imputable to the appellant, as observed by the Hon'ble Supreme Court in the case of Dinabandhu Sahu Vs. Jadumoni Mangaraj and Others (1954 AIR 411). The applicant/appellant was not given sufficient opportunity to support his contention as to why penalty confirmed by the order dated 29/01/2016 of the ld. CIT(A), Ludhiana is ought to be deleted. The adjournment of the hearing fixed for 22/06/2016 was sought for a justifiable reason considering the above facts and circumstances and hence MA filed by the assessee is not frivolous. Your Honor, the applicant has made detailed submissions for restoration of the appeal through modified MA dated 02/08/2021 supported by Affidavits of Sh. Manish K. Gupta affirming that he was out of the country on the date of hearing fixed for 22/06/2016 and was scheduled to return India on 02/07/2016 (Saturday night) and he was not having sufficient time to prepare for the hearing fixed for 04/07/2016. Further, affidavit of CA. Parveen Jindal was also submitted before this Hon'ble Tribunal affirming that he was not fully conversant with the matter in Appeal No. ITA/259/Chd/2016. The applicant has also submitted copies of case laws through modified MA dated 02/08/2021 holding that the Tribunal has the power to recall the ex-parte order on merits if it is shown that non-appearance of the appellant was due to sufficient cause. Therefore, it is most humbly prayed that this Hon'ble Bench of the Tribunal may be pleased and gracious enough to set aside the ex-parte order passed by the Hon'ble Tribunal in ITA No. ITA/259/CHANDI/2016 dated 05/07/016 and the appeal of the assessee be restored in the interest of justice.” 5. We have heard the rival contentions and purused the material available on record. The misc. application has been filed by the assessee under Rule 24 for recalling of the ex-parte order passed on merits by the Coordinate Bench vide its order dated 5.07.2016. While disposing off the assessee’s appeal, it is noted that the Coordinate Bench in para 5 of its order has stated that none appeared on behalf of the assessee and the adjournment application moved by the Counsel on behalf of the assessee was rejected and thereafter 10 proceeded and decided the matter on merits of the case confirming the levy of penalty u/s 271(1)(C) amounting to Rs 38,97,270/- and the appeal filed by the assessee was dismissed. 6. Rule 24 of the ITAT Rules provides 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 or otherwise, after hearing the respondent. Furthermore, the proviso appended to the said Rule indicates that where an appeal has been disposed of on merits, and the appellant appears thereafter, the Tribunal shall set aside the ex parte order and restore the appeal, if it is satisfied that there was sufficient cause for his non-appearance when the appeal was called out for hearing. 7. In the instant case, we find that a request for adjournment was moved before the Tribunal on 30/06/2016 through Fax stating that on the scheduled date of hearing i.e, 4.07.2016, the Counsel for the assessee, Shri Manish K Gupta conversant with the matter would still be out of India and a request was made to adjourn the matter to any other convenient date after 20.07.2016. In support of the said request, an affidavit of Shri Manish K. Gupta as well as copy of his passport has placed on record before us and the contents thereof have not been rebutted by the Revenue. We therefore find that firstly, the request was made by the Counsel for the assessee for seeking the adjournment well before the scheduled date of hearing and the same thus doesn’t show any malafide in terms of delaying the appellate proceedings by seeking adjournment at the last moment on the scheduled date of hearing and secondly, the fact that the Counsel was travelling and not present in the Country to represent the matter is borne out of records and the same again doesn’t show any misrepresentation. We therefore find that where the Counsel representing the assessee is not physically present in the Country at the relevant point in time and a request was 11 made well in advance, there was reasonable cause for non-appearance on the scheduled date of hearing. In exercise of our powers under proviso to Rule 24, we hereby recall the order passed by the Tribunal dated 5.07.2016 and restore the appeal to its original position. Support is drawn from the decisions of Hon’ble Delhi High Court in case of CIT vs Ansal Housing Corporation Ltd (274 ITR 131 (Del)) and Cement Corporation of India Limited vs ACIT (Neutral Citation No. 2023/DHC/001347 dated 6.02.22023). The Registry is directed to fix the appeal for hearing in due course. 8. In the result, the misc. application is allowed. (Order pronounced in the open Court on 19/10/2023 ) Sd/- िवᮓम ᳲसह यादव (VIKRAM SINGH YADAV) लेखा सद᭭य / ACCOUNTANT MEMBER AG Date: 19/10/2023 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. आयकर आयुᲦ (अपील)/ The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 6. गाडᭅ फाईल/ Guard File 7. आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar