SHRI ATUL KUMAR SINGHAL,BAREILLY V. .ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, BAREILLY

MA 13/LKW/2021

AI Insights

The case involves two miscellaneous applications filed by Atul Kumar Singhal, the assessee, against the ex parte orders dismissing his appeals for non-prosecution. The applications were filed under Rule 24 of the Income Tax Appellate Tribunal Rules, 1963, which allows for the recall of orders in the absence of the appellant under certain conditions. The Tribunal considered the applications together due to the identical facts and issues involved. The primary legal contention was whether the delay in filing the applications, attributed to the COVID-19 pandemic, should be condoned. The Tribunal examined relevant judgments and the Supreme Court's directives on the exclusion of time during the pandemic, leading to the decision to recall the ex parte orders and restore the appeals for a decision on merits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31874 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 18-10-2021
• Other Referred Cases: Om Prakash Sangwan Vs. Income Tax Officer, Cement Corporation of India Ltd Vs. ACIT Circle-5(2), Honda Siel Power Products Ltd. v Commissioner of Income Tax, Delhi, Vijay Kumar Ruia v. Commissioner of Income Tax, Liladhar T Khushlani Vs. Commissioner of Customs Tax
• Laws Referred To: Income Tax Appeals Rules, 1963
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR RAJWANSHI
• Assessee Lawyers: B. P. YADAV
• Keywords: Set aside; Reasonable cause; Period of limitation; Time period of passing order
• Section: 254(2); 12A; 13

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER MA. No. 13 /LKW/2021 (In IT(SS) No.448/LKW/2018) Assessment Year: 2015-16 & MA. No. 14/LKW/2021 (In IT(SS). No.447/LKW/2018) Assessment Year: 2009-10 Atul Kumar Singhal 67 Mamian Tola, Bara Bazar, Bareilly-243003. v. ACIT, Central Circle Bareilly Income Tax Office, Bareilly-243001, UP. PAN:BCSPS6005A (Appellant) (Respondent) Appellant by: Shri B. P. Yadav, Adv. Respondent by: Shri Sunil Kumar Rajwanshi, Addl. CIT(DR) Date of hearing: 29 11 2024 Date of pronouncement: 11 12 2024 O R D E R PER KUL BHARAT, VICE PRESIDENT.: These two miscellaneous applications have been filed by the assessee, seeking recalling of the exparte order dated 25.10.2019 in IT(SS) No.447/LKW/2018 and IT(SS) No.448/LKW/2018 under Rule 24 of the Income Tax Appeals Rules, 1963. Both the applications were taken up together for hearing since the facts are identical and being disposed of by way of common orders for the sake of brevity. MA. Nos.13 & 14/LKW/2021 Page 2 of 7 2. Ld. Counsel for the assessee apropos to the grounds took us through the exparte order passed by the Tribunal. It is noticed that the miscellaneous applications as filed are barred by limitation of 535 days. During the course of hearing, a query was raised regarding application seeking condonation of delay. In response thereto, Ld. Counsel for the assessee contended that the present applications have been moved under Rule 24 of the Income Tax Appellate Tribunal Rules, 1963 (hereinafter referred as the “Rules”) and the limitation would not come into the way for restoring the appeals. Ld. Counsel placed reliance on the judgment of the Hon'ble Delhi Court rendered in the case of Om Prakash Sangwan Vs. Income Tax Officer (2018) 94 taxmann.com 394.He further contended that the country witnessed outbreak of Covid-19 Pandemic. Consequently, the Hon'ble Supreme Court took suo-moto cognizance directed for exclusion of that period. He, further, relied on the judgment of Hon'ble Delhi High Court to buttress the contention that for restoring the appeals under Rule 24 of the Rules, no limitation is prescribed. He prayed that the order dated 25.10.2019 may be recalled and the appeals may be fixed for adjudication on merits. 3. On the other hand, the Ld. Departmental Representative (“DR”) opposed the submissions and submitted that there is huge delay in filing of appeals. The assessee cannot take advantage of its negligence and no reasonable cause for non-appearance is stated by the assessee. The applications deserve to be dismissed. 4. We have heard the rival contentions and perused the material available on record. The Tribunal in ITA. Nos. 447 & MA. Nos.13 & 14/LKW/2021 Page 3 of 7 448/LKW/2018 for A.Y. 2009-10 & 2015-16, vide its order dated 25.10.2019, dismissed the appeals by observing as under: - “2. When the appeals were called out for hearing, none appeared on behalf of the assesses, nor any application for adjournment has been filed. We find that the proper notice of hearing had been sent RPAD to the assesses, which has not returned un-served. Under these circumstances, it appears that the assessee is not interested in prosecuting the appeals any further. As such, we hold that the appeals liable to be dismissed for non prosecution. In this regard we place reliance upon the following case laws: 1. CIT vs. Multiplan India Ltd. 38 ITD 320 (Del) 2. Estate of Late Tukojirao Holkar vs. CWT 223 ITR 480 (M.P.) 3. New Diwan Oil Mills vs. CIT (2008) 296 ITR 495 (P& H) 4. CIT vs. B. N. Bhattachargee And Another 118 ITR 461(SC) 3. Respectfully following the view taken in the cases cited (supra), we dismiss the appeal filed by the assessee for non prosecution. The assessee may, however, get it revived by showing sufficient cause for non- appearance.” 5. From the aforesaid, it is clear that the appeals of the assessee were dismissed for want of prosecution. And the Tribunal had not adjudicated the issues on merits. The assessee has relied on the judgment of the Hon'ble Delhi High Court in the case of Cement Corporation of India Ltd Vs. ACIT Circle-5(2) in Writ Petition (C) 1486 of 2023, wherein the Hon'ble Court has observed as under: - “7. As would be evident, the Tribunal seems to have taken recourse to the provisions of Section 254 of the Act. The Tribunal has alluded to the fact that since rectification of mistake, apparent from the record, can be made within six months from the end of the month in which the concerned order was passed, the petitioner’s application for recall of the order dated 24.01.2018 could not have been entertained. 7.1 In this context, the Tribunal has fixed two points i.e., the date on which the petitioner’s miscellaneous application was filed i.e., 24.09.2018, and when the six-month period expired, commencing from the end of the month in which the order was passed i.e., 31.07.2018. Having noticed these dates, the Tribunal has concluded that under Section 254 of the Act, it had no power to condone the delay qua the application for recall of its order, which was filed beyond six months. 8. In our view, the application moved by the petitioner was not stricto sensu, moved with a view to rectify a mistake apparent from the record, or even to amend any order. The petitioner simply sought a recall of the order dated 24.01.2018, whereby the appeal was dismissed for non-prosecution. Therefore, in our opinion, the said provision was not the most apposite provision for adjudicating the petitioner’s application for recall of the MA. Nos.13 & 14/LKW/2021 Page 4 of 7 order dated 24.01.2018, given the facts obtaining in the case. It appears, that the avenue available to the Tribunal (in the given fact situation) was the one contemplated in Rule 24 of the ITAT Rules. 8.1 For the sake of convenience, the same is extracted hereafter: “[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.]” 9. A perusal of the said Rule seems to plainly convey 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. 10. Furthermore, the proviso appended to the 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. Although in the main part of Rule 24, the expression used is “may”, when read with the proviso appended thereto, it leads to the conclusion that if the Tribunal chooses to dispose of the appeal on merits or otherwise, after hearing the respondent in the absence of the appellant, and the appellant, thereafter, appears and shows sufficient cause for not appearing on the date when the appeal is disposed of, the Tribunal is obliged, in law, to set aside the order passed and restore the appeal. As it appears from a perusal of the record, the Tribunal’s attention does not seem to have been drawn towards Rule 24 of the ITAT Rules. Rule 24 of the ITAT Rules does not have the impediment of limitation, as is prescribed under Section 254 of the Act. 10.1. The Tribunal, as noted above, has, in our view, taken recourse to not the most apposite provision i.e., Section 254 of the Act, given the fact that limitation had kicked in. Under Section 254 of the Act, the Tribunal has the power to rectify mistakes which arise from acts of omission or commission this power is inter alia, circumscribed by the period of limitation prescribed therein. [See Honda Siel Power Products Ltd. v Commissioner of Income Tax, Delhi; (2007) 12 SCC 596] 10.2. Besides this, the Tribunal is also, in our opinion, vested with incidental and ancillary powers which can be exercised in situations such as the one presented before us today.” 6. Further, reliance is placed by the Ld. Counsel for the assessee on the judgment of the Hon'ble Delhi High Court in the case of Om Prakash Sangwan (supra), the Hon'ble Court has held as under: - “Learned counsel for the appellant sought to impress upon the Court that the period mentioned in Section 254(2) of the Act only applied when the Tribunal notices the error and decides to proceed ahead to rectify it and MA. Nos.13 & 14/LKW/2021 Page 5 of 7 per se does not indicate any limitation within which the aggrieved party (assessee or Revenue) can approach it He relied upon the judgments of the Allahabad High Court titled Vijay Kumar Ruia v. Commissioner of Income Tax [2011] 15 taxmann.com (Allahabad) = 2011-TIOL-350-HC-ALL-IT and Gujarat High Court titled Liladhar T Khushlani Vs. Commissioner of Customs Tax Appeal No.915 of 2016 = 2017-TIOL-241-HC-AHM-CUS delivered on 25.01.2017 for this purpose. This Court is of the opinion that those judgments cannot afford the appellant any comfort. Section 254(2) of the Act was advisably amended to curtail extended period of four years Which had been provided to either class of litigants to approach the ITAT for a rectification. In this case, the Court has considered the submissions of the parties. In this case, the ITAT did not decide the appeal on the merits as it is mandated to but rather rejected for non-prosecution, Rule 24 of the Income Tax Appellate Tribunal's Rules and the other provisions of both the Income Tax Act and Rules indicate that the ITAT has to decide the appeals or matters before it on the merits. In these circumstances, the ITAT's failure to do so, implies that I exceeded its jurisdiction and Instead of deciding on the merits, rejected the appeal merely for non-prosecution. In the given circumstances and keeping in view the fact that Rule 25 does not stipulate any period of limitation within which the aggrieved party can approach the Tribunal, it is open to the appellant fo approach the Tribunal with a suitable application for restoration of the appeals; in such event, the appeals could be considered on their merits and decided in ‘accordance with law after hearing both the parties, provided, the application is presented before the ITAT within thirty days from today. Appeals are disposed of in the above terms.” 7. In the light of the above binding precedents and taking into account that during the relevant period there was spread of Covid-19 Pandemic, the Hon'ble Supreme Court in the case of Suo Moto Writ Petition (C). No.03 of 2020 has ruled as under:- “2. We have considered the suggestions of the learned Attorney General for India regarding the future course of action. We deem it appropriate to issue the following directions: - 1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021. 2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply. 3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periodsprescribed under Sections 23 (4) MA. Nos.13 & 14/LKW/2021 Page 6 of 7 and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. 4. The Government of India shall amend the guidelines for containment zones, to state. “Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements.” 3. The Suo Motu Writ Petition is disposed of accordingly.” 8. Therefore, following the binding precedents and looking into the totality of the facts, we hereby recall the order dated 25.10.2019 in ITA. Nos. 447 & 448/LKW/2018 for AY. 2009-10 & 2015-16 and direct the registry to fix the appeals in due course. The miscellaneous applications filed by the assessee are accordingly, allowed. 9. In the result, the miscellaneous applications of the assessee are allowed. Order pronounced in the open Court on 11/12/2024. Sd/- Sd/- [ANADEE NATH MISSHRA] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 11/12/2024 Vijay Pal Singh, (Sr. PS) MA. Nos.13 & 14/LKW/2021 Page 7 of 7 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order // True Copy// Assistant Registrar "