VISHAL N. KONDAWAR,NAGPUR V. ASSISTANT COMMISSIONER OF INCOME TAX,CIRCLE-1, NAGPUR

MA 1/NAG/2022

AI Insights

The case revolves around a miscellaneous application filed by Vishal Nanaji Kondawar, the assessee, against an ex-parte order passed by the ITAT Nagpur Bench in 2015. The assessee contended that he did not receive notice for the original hearing, leading to the absence of representation and subsequent dismissal of the appeal for non-prosecution. The assessee argued that the official tribunal portal incorrectly displayed the case as pending without any orders, contributing to the misunderstanding. The Tribunal, referencing a similar case and the principles of natural justice, decided to recall the ex-parte order and restore the appeal for a decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474391 (ITAT-NAGPUR)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Other Referred Cases: Om Prakash Sangwan vs. ITAT
• Laws Referred To: Income Tax (Appellant Tribunal) Rules
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RESPONDENT ACCEPTS NOTICE
• Keywords: Period of limitation; Principle of natural justice
• Section: 254(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI K.M. ROY, HON’BLE ACCOUNTANT, MEMBER MA NO. 1/NAG/2022 [ARISING OUT OF ITA No.264/NAG/2012 (A.Y. 2007-08)] Vishal Nanaji Kondawar Plot No. 51/52, 402 Harekrishna Enclave Ramdespeth, Nagpur PAN – AJPDK0206K v. ACIT – Circle -1 Room No. 510, MECL Building Seminary Hills, Nagpur - 440006 (Appellant) (Respondent) Assessee Represented by : Shri Manoj G. Moryani, Advocate Revenue Represented by : Shri Abhay Y. Marathe, Sr.Dr. Date of conclusion of hearing : 21.03.2025 Date of pronouncement of order : 21.03.2025 O R D E R PER BENCH This miscellaneous application is arising out of ITA No. 264/NAG/2012 for the A.Y. 2007-08 decided on 10.04.2015. Assessee has made the following submissions in its miscellaneous application: - “1. The aforesaid appeal was fixed for hearing on 07/04/2015. The appellant has not received notice regarding fixing of appeal on 07/04/2015, therefore the said has not been communicated to the counsel. MA NO. 1/NAG/2022 Vishal Nanaji Kondawar Page | 2 2. The appellant counsel has approached the Hon'ble Income Tax Appellate Tribunal, Nagpur Bench, Nagpur on 19/04/2022 for fixation of appeal as there is no regular bench come from last two years at that time counsel known that in the aforesaid case Hon'ble Income Tax Appellant Tribunal has dismissed the appeal and passed Ex-parte without deciding the appeal on merit. Since, the assessee has not received any notice about fixation of case on 07/04/2015 hence assessee has not appeared before the Hon'ble Tribunal on 07/04/2015. 3. The appellant was under bonafied impression that the matter is pending before the Hon'ble Income Tax Appellate Tribunal. The official portal of Tribunal itself also provide \"pending status\" with no order uploaded in the case of appellant and showing no order, hence in this circumstances appeal of the assessee may kindly be fixed and restored. 4. The Honble ITAT while passing the order has considered that the notice has not been received by the appellant and even ex-party order was also not received by the appellant. The counsel has applied for certified copy of the order on 25/04/2022 and paid the relevant fees. The counsel received certified copy of order on 26/04/2022 and on the same day the counsel filed this application. In the circumstances assessee humbly request that order of Hon ble ITAT needs to be recalled under Rule 24 and decided on merit. 5. The assessee is very small assessee and vary badly suffering from Covid-19 pandemic and due to passing of ex-parte order huge loss has been caused to the assessee. Prayer: It is therefore, humbly prays that to meet the ends of justice the order dated 10/04/2015 may be recalled and miscellaneous application may kindly be allowed under Rule 24 of Income Tax (Appellant Tribunal) Rules and set- aside the exparte order restoration of appeal.” 2. It appears that the Assessee has remained non-compliant to the Ld.CIT(A) and the appeal was dismissed on ground of non-prosecution. There is a huge delay in filing the miscellaneous application before us. Ld. Sr. DR vehemently submitted that miscellaneous application may be dismissed because there is no power before the bench to condone the delay of 2368 days. MA NO. 1/NAG/2022 Vishal Nanaji Kondawar Page | 3 3. Heard both sides. We find that similar issue came up before the ITAT, Visakhapatnam Bench wherein the Judicial Member was the author and the relevant operative portion is reproduced below: - “6. This batch of appeals filed by the assessees are dismissed exparte by order dated 21/03/2017. Subsequently, the assessee has filed Misc. Application on 06/01/2018 which is beyond the time limit prescribed under section 254(2) of the Act. The assessee filed an application before us under Rule 24 of the ITAT Rules, 1963 and submitted that exparte order may be recalled. In this application, it was stated that the assessee’s earlier counsel not attended before the Tribunal due to heavy pressure work in the Income Tax Department. The ld.counsel for the assessee further submitted that the assessee has changed his earlier counsel and the present counsel is ready to appear, the date on which case is posed for hearing. By considering the application filed by the assessee and also considering the argument of the ld. counsel for the assessee, we are of the opinion that there is a sufficient cause for not to appear in this appeal when it was posed. We also find that the Misc. Application filed by the assessee is after 98 days of passing of the exparte order, is a reasonable period, in which the assessee approach the Tribunal. In our opinion, this being an exparte order, assessee should be given opportunity and the order has to be passed on the merits of the case. In this case, no merits have been considered, simply dismissed the appeal. In our opinion, not only in the interest of justice and also on the grounds of principles of natural justice, these appeals deserve to be recalled. The Hon'ble Delhi High Court in the case of Om Prakash Sangwan (supra) has held that as per Rule 24 of the ITAT Rules, 1963, the ITAT has to decide the appeals or matters before it on the merits. In these circumstances, the ITAT failed to do so, implies that it exceeded its jurisdiction and instead of deciding on the merits, rejected the appeal merely for nonprosecution. In the given circumstances and keeping in view of the fact that Rule 25 does not stipulate any period of limitation, within which the aggrieved party can approach the Tribunal, and directed the assessee to approach the Tribunal, in such an event further directed the ITAT to pass orders. The Hon'ble Deli High Court has also considered section 254(2) of the IT Act and observed that 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 rectification. In this case, the ITAT did not decide the appeal on merits as it is mandated to but rather rejected for nonprosecution. In the present case also, the appeals filed by the assessees are dismissed for non-prosecution. The Misc. Applications filed by the assessees are only recalling of the exparte order, it is neither for rectification nor for any amendment. Therefore, under these facts and circumstances of the case, we find that the judgment of the Hon'ble MA NO. 1/NAG/2022 Vishal Nanaji Kondawar Page | 4 Delhi High Court in the case of Om Prakash Sangwan (supra) is squarely applies to the facts of the present case. The relevant portion of the judgment of the Hon'ble Delhi High Court in the case of Om Prakash Sangwan (supra) is extracted verbatim as under:- “1. Mr. Ashok Manchanda, counsel for respondent accepts notice. With the consent of the parties, the appeals were heard finally. The appellant's grievance is that the ITAT vide its impugned order rejected the rectification application. The ITAT's order dismissing the appeal was dated 16-06-2016; however, the appellant moved under Section 254(2) of the Income Tax Act, 1961 (hereinafter referred to as the \"Act\") by an application on 02-6-2017 which was dismissed by the impugned order. 2. 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 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. CIT [2011] 334 ITR 38 and Gujarat High Court titled Liladhar T Khushlani v. Customs 2017 (351) ELT 36 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. 3. 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 it 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 to 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.” MA NO. 1/NAG/2022 Vishal Nanaji Kondawar Page | 5 7. Ld. Departmental Representative has not brought any decision of the Jurisdictional High Court to our notice in this subject matter. Therefore, respectfully following the judgment of the Hon'ble Delhi High Court in the above referred to case, we allow the Misc. Applications filed by the assessees and recall the exparte order dated 21/03/2017. The Registry is directed to post the appeals in I.T.A.Nos. 168 to 174 & 143/VIZ/2014 in the regular course of hearing. 8. In the result, all the Misc. Applications filed by the assessees are allowed.” 4. In the light of the above judicial pronouncement which is exactly on same issue, this miscellaneous application is allowed. Registry is directed to fix the appeal in due course after serving proper notice. 5. In the result, miscellaneous application filed by the Assessee is allowed. Order pronounced in the open Court on 21st March, 2025 Sd/- K.M. ROY ACCOUNTANT MEMBER Sd/- V. DURGA RAO JUDICIAL MEMBER DATED:21.03.2025 Giridhar, Sr. PS (On Tour) Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. //True Copy// By Order Sr. Private Secretary ITAT, Nagpur "