Smt. Nandini V. Kalgutkar, Mangalore V. Income Tax Officer, Ward-2(1), Mangalore

MA 97/BANG/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4068 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 10-01-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SRINIVASA KAMATH
• Keywords: Period of limitation; Reasonable cause
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU “A” BENCH, BENGALURU Before B.R. Baskaran, Accountant Member and Smt. Beena Pillai, Judicial Member MA No. 97/Bang/2021 (Arising out of ITA No. 802/Bang/2014) (Assessment Year: 2008-09) Smt. Nandini V. Kalgutkar University Medical Centre Jyothi Circle Mangalore Vs. The Income Tax Officer Ward - 2(1) Mangalore PAN – AKBPK2399B Appellant Respondent Appellant by: Shri Srinivasa Kamath Respondent by: Shri Sankarganesh K, JCIT Date of Hearing: 04.03.2022 Date of Pronouncement: 02.06.2022 O R D E R Per: B.R. Baskaran, A.M. The assessee has filed this miscellaneous application seeking recall of order dated 31.03.2015 passed by the Tribunal ex-parte on 31.3.2015 in ITA No.802/Bang/2014 for assessment year 2008-09. 2. The Ld Counsel appearing for the assessee submitted that the appeal has been dismissed by the Tribunal for want of prosecution and the Tribunal has not decided the issues on merits. He submitted that it is not true that the was not interested in prosecuting the appeal, as presumed by the Tribunal in the impugned order. He submitted that the authorized representative of the assessee appeared before the Tribunal on earlier two occasions, viz., on 01-09-2014 and 05-11-2014. On the second occasion, the appeal was adjourned to 14-01-2015. However, the Tribunal did not function on that date, since it was declared as closed holiday. Accordingly, MA No. 97/Bang/2021 Smt. Nandini V. Kalgutkar 2 the appeal was adjourned to 17-03-2015. However, the assessee did not receive any notice and hence he did not appear. However, the Tribunal proceeded to dispose of the appeal ex-parte following the decision rendered in the case of Multiplan Ltd (38 ITD 320). He submitted that the law laid down in the case of Multiplan Ltd has been held to be no more good law by various High Courts. It has been further held that the Tribunal is required to adjudicate the issues on merits even in ex-parte orders. 3. The Ld A.R submitted that the assessee did not receive the order so passed by Tribunal also and she was under the bonafide belief that the appeal is still pending with the Tribunal. When the assessee opted to settle the disputes under Vivad se Vishwas Act, she enquired about the status of the appeal on 04-12-2020, it came to her knowledge that the appeal has been disposed of by the Tribunal ex-parte. Immediately thereafter, the present miscellaneous application has been filed on 11-01-2021, i.e., within six months from the date of receipt of knowledge about the disposal of appeal. Hence, the miscellaneous application should be considered as having filed within the time limit prescribed in sec. 254(2) of the Act. 4. The Ld A.R further submitted that Tribunal has passed ex-parte order and hence it may recall the order under Rule 24 of Appellate Tribunal Rules. He submitted that the time limit prescribed u/s 254(2) shall not apply for recall of order under Rule 24 of the Appellate Tribunal rules as held by Hon’ble Delhi High Court in the case of Om Prakash Sangwan vs, ITO (ITA 625/2018 and 626/2018). He submitted that the Kolkatta bench of Tribunal has followed the above said decision of Hon’ble Delhi High Court in the case of M/s Aarati Engineering & Construction Co. vs. ITO (M A No.82/Kol/2018 arising in ITA No.2152/Kol/2014) and recalled an ex- party order passed by the Tribunal under Rule 24 after expiry of six months period. The Ld A.R submitted that the assessee was not negligent in pursuing her appeal and accordingly there was reasonable cause in not appearing before the Tribunal on the date of hearing. Accordingly, he prayed that the impugned order may kindly be recalled. MA No. 97/Bang/2021 Smt. Nandini V. Kalgutkar 3 5. The Ld D.R, on the contrary, submitted that the present miscellaneous petition has been filed beyond six months and hence the same is liable to be dismissed in terms of sec.254(2) of the Act. 6. We heard rival contentions and perused the record. We notice that the Tribunal has dismissed the appeal by passing an ex-parte order citing the reason of non-prosecution and following the decision rendered by the Tribunal in the case of Multiplan Ltd (supra). According to Ld A.R, the assessee did not receive the notice of hearing and it also seen that the representative of the assessee had appeared in the earlier two occasions. The appeal of the assessee was disposed of by the Tribunal on 31.3.2015. According to Ld A.R, the assessee did not receive the copy of order. In the appeal folder, though it is stated that the order has been issued, the postal acknowledgement is not available. Hence it is not clear as to whether the order was received by the assessee or not. According to Ld A.R, the assessee came to know about the order only on 04-12-2020, when she enquired about the same with the Tribunal. Immediately thereafter, the present application has been filed by the assessee on 11.1.2021. Accordingly, we notice that the assessee has filed the petition within six months from the date of knowledge about the order passed by the Tribunal. Accordingly, it was contended that the miscellaneous application has been filed within six months in terms of 254(2) from the date of receipt of order. 7. The Mumbai Tribunal has held in the case of Pawan Kumar Jain vs. Dy. CIT (2013) 155 TTJ 14 (Mum- Tribunal) that for purposes of filing application under section 254 (2), the period of limitation would start from the point of time when order u/s 254 (1) is “communicated to the assessee” and not from the “date of the passing of the order”. The relevant observations made by the Tribunal are extracted below:- “From the principles and maxims laid down by the Hon’ble Supreme Court in catena of cases as referred to above, it is amply clear that the "date of order" should be construed and reckoned with the date of knowledge of the order i.e., when the order has been communicated to MA No. 97/Bang/2021 Smt. Nandini V. Kalgutkar 4 the party. The legal maxim behind this is, how a person concerned or a person aggrieved is expected to exercise the right of remedy conferred by the Statute, unless the order is communicated or known to him either actual or constructively. The underlying principles is of fair play and recognition of legal rights of remedy in a constructive manner and not to give any construction or interpretation so as to defeat the purpose for which the legal remedy has been enacted in the provisions relating to limitations. It is a fundamental principle of justice and fair play that parties, whose rights are affected by an order must have a knowledge or notice of it, otherwise, the legal rights to remedy is lost to the party, even when he is not at fault.” The above said decision supports the submission of Ld A.R, since the according to him, the assessee came to know about the order passed by the Tribunal only on 04-12-2020. 8. Since the order has been passed without hearing the assessee, it was contended that the present petition of the assessee seeking recall of the order is required to be considered under Rule 24 of Appellate Tribunal Rules, 1963. We also notice that the Hon’ble Delhi High Court, in the case of Om Prakash Sangwan vs. ITO has expressed the view that Rule 25 does not stipulate any period of limitation within which the aggrieved party can approach the Tribunal. We notice that the Kolkatta Tribunal has followed the above said decision of Hon’ble Delhi High Court in the case of M/s Aarati Engineering & Construction Co (supra) and recalled the ex-parte order after expiry of six months. 9. In the instant case, it is noticed that the ex-parte order passed by the Tribunal came to the knowledge of the assessee only on 04-12-2020 and the present application has been filed within six months from that date. We noticed that the Tribunal has passed the order following the decision rendered in the case of Multiplan Ltd (supra), i.e., the order has not been passed in adjudication of issues on merits. Accordingly, we are of the view that the impugned order of the Tribunal deserves to be recalled. Accordingly, we recall the order dated 31-03-2015 passed in ITA No.802/Bang/2014. The registry is directed to post the appeal in the normal course under intimation to the parties. MA No. 97/Bang/2021 Smt. Nandini V. Kalgutkar 5 10. In the result, the miscellaneous application filed by the assessee is allowed. Order pronounced in the open Court on 2 nd June, 2022. Sd/- Sd/- (Beena Pillai) (B.R. Baskaran) Judicial Member Accountant Member Bengaluru, Dated: 2 nd June, 2022 Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) -Mysore 4. The Pr.CIT - Mangalore 5. The DR, ITAT, Bengaluru 6. Guard File By Order //True Copy// Assistant Registrar ITAT, Bengaluru n.p.