RANJANABEN MUKESHBHAI PATEL V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2

TAXAP/268/2021

AI Insights

The case involves Ranjanaben Mukeshbhai Patel, the appellant, who contested an order from the Deputy Commissioner of Income Tax, Circle 2, Bhavnagar, which was partly upheld by the Commissioner of Income Tax (Appeals) and subsequently challenged before the Income Tax Appellate Tribunal. The Tribunal dismissed the appeal due to the appellant's non-appearance and lack of submissions, leading to this appeal in the High Court. The main legal contention was whether the Tribunal erred in dismissing the appeal without considering it on merits, despite the appellant's failure to appear or submit arguments.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 767133 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 01-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Income Tax (Appellate Tribunal) Rules, 1963
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M R BHATT CO
• Assessee Lawyers: HIREN TRIVEDI
• Keywords: Cryptic order; Ex-parte hearing; Non-speaking order; Sufficient cause for non-appearance
• Section: 143(3); 260A; 254

Judgement Text

"C/TAXAP/268/2021 ORDER DATED: 01/02/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 268 of 2021 ============================================= RANJANABEN MUKESHBHAI PATEL Versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2 ============================================= Appearance: HIREN J TRIVEDI(8808) for the Appellant(s) No. 1 M R BHATT & CO.(5953) for the Opponent(s) No. 1 ============================================= CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 01/02/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short ‘the Act, 1961’) is at the instance of an assessee and is directed against the order passed by the Income Tax Appellate Tribunal, ‘SMC’ Bench, Ahmedabad dated 13.03.2020 in the ITA No.1714/Ahd/2018 for the A.Y. 2015-16. 2. This Tax Appeal came to be admitted by this Court on the following two substantial questions of law: “(i) Whether the Hon’ble Tribunal has committed substantial error of law in not assigning any reasons while dismissing the appeal of the appellant and passing a non-speaking and cryptic order? (ii) Whether the Hon’ble ITAT has erred in not following the mandate of section 254 of the Act read with Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 in not disposing the appeal of the appellant on merits?” 3. We have heard Mr. Hiren Trivedi, the learned counsel appearing for the appellant-assessee and Mr. Manish Bhatt, the Page 1 of 4 C/TAXAP/268/2021 ORDER DATED: 01/02/2022 learned Senior Counsel assisted by Mr. Karan Sangani, the learned counsel appearing for the Revenue. 4. It appears from the materials on record that the appellant-assessee being dissatisfied with the order passed by the DCIT, CIR(2), Bhavnagar dated 14.11.2017 under Section 143(3) of the Act, preferred an appeal before the Commissioner of Income Tax bearing No.CIT(A)-6/139/17-18. The appeal preferred by the appellant-assessee came to be partly allowed by the CIT(A) vide order dated 15.05.2018. The appellant herein being dissatisfied with the order passed by the CIT(A), challenged the same before the Income Tax Appellate Tribunal. It appears and as fairly submitted by the learned counsel appearing for the appellant that the appellant- assessee was not in a position to appear before the Appellate Tribunal. 5. In such circumstances referred to above, the Appellate Tribunal observed in paragraph 12.1 of its impugned order as under: “12.1 Since the assessee has not rebutted or controverted the findings of the ld.CIT(A) by way of any written submission, therefore we find no reason to interfere with the findings of the Id.CIT(A) and hence the ground raised by the assessee is dismissed.” 5.1. The Appellate Tribunal ultimately dismissed the appeal. 6. The principle argument of Mr. Trivedi, the learned counsel appearing for the assessee is that even if the appellant was not in a position to appear before the Tribunal, the Tribunal was obliged to dispose of the appeal on merits. The Tribunal ought not to have affirmed the order passed by the CIT(A) only on the ground that the appellant failed to make any Page 2 of 4 C/TAXAP/268/2021 ORDER DATED: 01/02/2022 submissions before the Tribunal. 7. Mr. Trivedi, invited our attention to Rule 24 of the Income Tax (Appellate Tribunal) Rules,1963 which reads thus: “[Hearing of appeal ex parte for default by the appellant. 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.]” 8. In such circumstances referred to above, Mr. Trivedi prays that both the substantial questions of law as framed by this court may be answered in favour of the assessee and against the Revenue. Mr. Trivedi, would pray that the impugned order passed by the Tribunal may be quashed and set aside and the matter may be remitted back to the Tribunal with the direction that the appeal filed by the assessee be heard on its own merits. 9. On the other hand, Mr. Bhatt, the learned Senior Counsel appearing for the Revenue has vehemently opposed this appeal submitting that none of the two questions of law as proposed by the appellant could be termed as substantial questions of law. Mr. Bhatt, pointed out something very pertinent which should be taken cognizance of. Mr. Bhatt, pointed out that the appellant herein has already preferred an application before the Appellate Tribunal invoking the proviso to Rule 24 referred to above. Mr. Bhatt would submit that by Page 3 of 4 C/TAXAP/268/2021 ORDER DATED: 01/02/2022 way of such application filed by the appellant herein, the appellant is seeking to point out to the Tribunal that there was sufficient cause for his non appearance when the appeal was taken up for hearing on 12.03.2020. 10. Having heard the learned counsel appearing for the parties and having gone through the materials on record, we are of the view that as the appellant has already filed an application before the Appellate Tribunal invoking the proviso to Rule 24 of the Rules, 1963, he should pursue such application. We are of the view that we should not interfere with the impugned order passed by the Appellate Tribunal only on this short point that the application filed by the appellant herein invoking the proviso to Rule 24 of the Rules, 1963 is pending for hearing before the Appellate Tribunal. We direct the Appellate Tribunal to take up such application filed by the appellant herein for hearing and pass an appropriate order in accordance with law at the earliest. 11. In such circumstances referred to above, we decline to answer the two substantial questions of law framed by this Court at the time of admission of this appeal leaving it open for the Income Tax Appellate Tribunal to decide the appeal filed by the appellant-assessee under Rule 24 of the Rules, 1963. In the event if such application is rejected for any good reason by the Appellate Tribunal then in such circumstances, the appellant may avail appropriate legal remedy available to him in law. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) NEHA Page 4 of 4 "