XCELLON EDUCATION LIMITED,AHMEDABAD V. THE ADDL. CIT, TDS, AHMEDABAD

MA 37/AHD/2023

AI Insights

Xcellon Education Ltd. filed a Miscellaneous Application against the ITAT's earlier decision, which had dismissed their appeal due to non-appearance at the hearing. The dismissal was based on the Tribunal's interpretation of the appellant's lack of seriousness in pursuing the case, supported by precedents that allowed dismissal for non-prosecution. However, the appellant argued that the non-appearance was due to an internal communication failure, not a lack of interest. Upon reviewing the circumstances and relevant judicial precedents, the ITAT decided to recall the dismissal and restore the appeal for a decision on its merits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25196 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-07-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 06-04-2023
• Other Referred Cases: CIT v. B.N. Bhattacharjee (118 ITR 461), Estate of Late Tukojirao Holkar v. CWT (223 ITR 480), Multiplan India Ltd. (38 ITD 320), Shri Hasmukh Prabhulal Mehta vs. ITO, Golden Times Services P. Ltd. vs. ITO, Devendra Kumar B. Chopra vs. DCIT, Rameshbhai V. Prajapati vs. DCIT, Om Prakash Sangwan vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEEJU GUPTA
• Assessee Lawyers: TUSHAR HEMANI; .; PARIMALSINH B
• Keywords: Condonation of delay; Reasonable cause; Period of limitation; Principle of natural justice; TDS
• Section: 250; 254(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER M.A. Nos.37 to 40/Ahd/2023 (in ITA Nos.2678 to 2681/Ahd/2017) (Assessment Years: 2015-16 & 2016-17) Xcellon Education Ltd., 10th Floor, Sangeeta Complex, Nr. Parimal Crossing, Ellisbridge, Ahmedabad-380006 Vs. Additional Commissioner of Income Tax, TDS, Ahmedabad [PAN No.AAACX0682N] (Appellant) .. (Respondent) Appellant by : Shri Tushar Hemani, Sr. Adv., & Shri Parimalsinh B Parmar, A.R. Respondent by: Ms. Neeju Gupta, Sr. D.R. Date of Hearing 05.07.2024 Date of Pronouncement 01.10.2024 O R D E R PER SIDDHARTHA NAUTIYAL, JM: The assessee has filed the present Miscellaneous Application against the order passed by Hon'ble Tribunal in ITA No. 2678/Ahd/2017, dismissing the appeal of the assessee, through a common order dated 08.03.2019. The assessee, being aggrieved by the order passed under Section 250 of the Income-tax Act, 1961 by the CIT (Appeals)-8, Ahmedabad, dated 23.10.2017, in which the appellant's appeal was dismissed, thereby confirming the penalty order under Section 272(2)(g) for the assessment year 2015-16 filed appeal before ITAT, which was dismissed by Tribunal. Vide Para 2 of the appellate order, ITAT noted that the notice of hearing was sent to the assessee via Registered Post, using the address mentioned in Column No. 10 of Form No. 36. However, at the time of hearing, neither the appellant nor its representative appeared, nor was any adjournment application filed. Based on this, the MA Nos.37 to 40/Ahd/2023 (in ITA Nos. 2678 to 2681/A/17) Xcellon Education Ltd. vs. Addl.CIT Asst.Year –2015-16 & 2016-17 - 2 - Tribunal inferred that the appellant was not serious about pursuing its appeal. The Tribunal relied on judicial precedents, including the Hon'ble Supreme Court’s decision in CIT v. B.N. Bhattacharjee (118 ITR 461) and the Hon'ble M.P. High Court’s decision in Estate of Late Tukojirao Holkar v. CWT (223 ITR 480), as well as the ITAT Delhi Bench’s decision in Multiplan India Ltd. (38 ITD 320), to dismiss the appeal for non- prosecution. However, the Tribunal allowed the appellant to apply for a recall of the order within the prescribed time, upon providing suitable reasons. The ITAT made the following observations, while passing the order: “2. The notice of hearing was sent to the assessee by Registered Post as per the address given in Column No.10 of Form No. 36. However, at the time of hearing neither anybody appeared on behalf of the assessee nor any application for adjournment was filed. From this, it is reasonable to infer that the assessee is not serious to pursue its cases. Hon’ble Supreme Court in the case of CIT-vs-B.N. Bhattachargee and Another, 118 ITR 461(SC) observed that preferring an appeal means effectively pursuing it. Hon’ble M.P. High Court in the case of Estate of Late Tukojirao Holkar-vs-CWT, 223 ITR 480(M.P.) dismissed the reference filed by the assessee for not taking necessary steps. Similar view is taken by I.T.A.T., Delhi Bench in the case of Multiplan India Ltd., 38 ITD 320. Considering the above, it appears that the assessee is not interested in prosecuting its appeals. We, therefore, are inclined to dismiss the appeals filed by the assessee for non-prosecution. However the assessee is at liberty to apply for the recall of the order within the prescribed time after furnishing the suitable reasons for non-appearance. Hence the appeals filed by the assessee are dismissed. ” 2. Vide the present Miscellaneous Application, the assessee submitted that the non-appearance before the Hon'ble ITAT on the scheduled hearing date was neither intentional nor deliberate. The notice of hearing, though received by the office clerk, was not forwarded to the responsible person handling the Income Tax matters for the appellant company. Consequently, the appellant and its Authorized Representative were unaware of the fixed hearing date. This failure in communication, which was beyond the appellant's control, led to the absence before the Hon'ble Tribunal on the appointed date of hearing. MA Nos.37 to 40/Ahd/2023 (in ITA Nos. 2678 to 2681/A/17) Xcellon Education Ltd. vs. Addl.CIT Asst.Year –2015-16 & 2016-17 - 3 - Sometime, in February 2023, while checking the status of the appeal on the Tribunal’s portal, the responsible person of the appellant company learned that the Tribunal had passed the appellate order on 08.03.2019. Upon discovering this, the appellant company was immediately informed about the dismissal of the appeal. The assessee submitted that neither the assessee company nor its Authorized Representative was aware of the hearing of the appeal or the passing of the appellate order until February 2023. Therefore, the non- appearance at the hearing was due to circumstances beyond the appellant's control, and there was no deliberate negligence or lack of prosecution. The assessee emphasized that it remains fully committed to pursuing and prosecuting the appeal it had filed. The assessee had duly paid the appeal fees at the time of filing, furnished the statement of facts, and submitted all relevant documents. Therefore, in the interest of justice and fair play, the appellant respectfully prays that the appellate order dated 08.03.2019, which dismissed the appeal for non-prosecution, be recalled. The assessee also requested that the appeal be adjudicated on its merits. This miscellaneous application is being filed in compliance with the contents of Para 3 of the appellate order dated 08.03.2019. Furthermore, the assessee acknowledged that, technically, there is a delay in filing the present Miscellaneous Application. The appellate order was passed on 08.03.2019, but it was never served upon the appellant company. The appellant only came to know of the order in February 2023, and has since acted immediately to file the Miscellaneous Application. Thus, in realistic terms, the application is being filed within one month from the date the appellant became aware of the appellate order. The delay, if any, is only technical and is attributable to reasons beyond the control of the appellant, namely, the non-receipt of the appellate order. The assessee submitted that this MA Nos.37 to 40/Ahd/2023 (in ITA Nos. 2678 to 2681/A/17) Xcellon Education Ltd. vs. Addl.CIT Asst.Year –2015-16 & 2016-17 - 4 - technical delay, which was neither intentional nor deliberate, be kindly condoned. 3. Before us, the Counsel for the assessee also placed reliance on Proviso to Rule 24 of the I.T. Rules and submitted that if the assessee is able to demonstrate sufficient cause for non-appearance before the Bench at the time the matter was called for hearing, the main appeal can be restored for fresh hearing. The Counsel for the assessee placed reliance on several judicial precedents in support of the above contention. 4. It would be useful to reproduce the relevant decisions on this issue for the sake of ready reference. 5. In the case of Shri Hasmukh Prabhulal Mehta vs. ITO, in M.A. No. 16/Ahd/2022 vide order dated 09.08.2023, the Ahmedabad Tribunal made the following observations: “4. The sum and substance of the said Rule is this that in the event, the matter is disposed of ex parte on merit and subsequently, if the assessee is able to show sufficient cause for non-appearance before the Bench at the time of call, ex parte order can be recalled and the main appeal can be restored for fresh hearing as per the Proviso to Rule 24 of IT Rules. Ld. AR further relied upon the judgment passed by the Hon'ble Delhi High Court in the case of Golden Times Services P. Ltd. in W.P. (c) No. 402/2020, wherein applying same analogy, the order of dismissal of the appeal ex parte dated 30.08.2019 stood quashed and the main appeal has been restored to the file of the IT AT by the ITAT with a direction to dispose of the same on merit. The said order was also relied upon by the Coordinate Bench in the matter of Devendra Kumar B. Chopra vs. DCIT in M.A. Nos. 159 & 160/Ahd/2020, on identical facts and circumstances of the case; the appeal so dismissed due 'to non- prosecution stood restored upon condonation of delay of 442 days. 5. We note that the Ld. DR has not been able to produce any judgment contrary to the finding made as discussed above. 6. In the instant case, we find merit in the explanation rendered by the assessee for not being able to appear before the Bench at the time of call on 08.05.2019 and MA Nos.37 to 40/Ahd/2023 (in ITA Nos. 2678 to 2681/A/17) Xcellon Education Ltd. vs. Addl.CIT Asst.Year –2015-16 & 2016-17 - 5 - thus, keeping in view the provision of Rule 24 of IT Rules, we allow this Miscellaneous Application upon condoning the delay of 893 days and restoring it for fresh hearing. The Registry is also directed to fix the matter on board for hearing on 12th September, 2023. Since, both the parties have entered appearance before us today, service of notice upon them is hereby dispensed with. 7. In the result, the Miscellaneous Application filed by the assessee is allowed.” 6. In the case of Mansukhbhai M. Donga vs. ITO, in M.A. No. 137 & 138/Ahd/2020 vide order dated 04.05.2021, the Ahmedabad Tribunal made the following observations: “5. We have heard both the parties and gone through the records carefully. Admittedly, the assessee has filed Misc. Application beyond the time limit prescribed under section 254(2) of the Act. However, this being an ex-parte order, the rule 24 of ITAT rules comes to rescue the assessee. It does not stipulate any time limit for filing the Miscellaneous Application for recalling the order but requires there has to be reasonable cause for non-appearance on the date of hearing. Besides in this case, no merit has 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 vs. ITO reported in 94 taxmann.com 394 has as under:- “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.” In view of the above and considering the reasons for non-appearance of the ld. counsel of the assessee as discussed above, the said applications are allowed and Registry is directed to list the appeal for hearing in due course. 6. In the result, the Miscellaneous Applications filed by the assesse are allowed.” MA Nos.37 to 40/Ahd/2023 (in ITA Nos. 2678 to 2681/A/17) Xcellon Education Ltd. vs. Addl.CIT Asst.Year –2015-16 & 2016-17 - 6 - 7. In the case of Rameshbhai V. Prajapati vs. DCIT, in M.A. No. 111/Ahd/2020 vide order dated 24.02.2021, the Ahmedabd Tribunal made the following observations: “2. Heard both the sides and perused the material on record. The appeal of the assessee was dismissed vide ITAT order dated 20th Feb, 2018 as none appeared on behalf of the assessee on the date of hearing. The assessee has explained the reason for not filing the Miscellaneous Application within six months from the end of the month in which the order was passed as elaborated supra supported by an affidavit and copies of other documents/details. The assessee has also pointed out that previous tax consultant has not attended his tax matter satisfactorily and new tax consultant has obtained various documents, these circumstances and his ill health caused delay in filing this appeal against ex-parte order which was passed on account of non-prosecution. After taking into consideration the facts narrated by the assessee supported by an affidavit/documents it appears that there was reasonable cause for non-appearance and delay in filing the Miscellaneous Application against ex-parte order passed on account of nonprosecution. Therefore, keeping in view of Rule 24 of the Income Tax (Appellate Tribunal, 1963) and after taking into consideration the decision of Hon’ble Jurisdictional High Court cited in the case of Dolphin Metal (India) Ltd. vs. ITO supra, we condone the delay in filing the Miscellaneous Application. Considering the above facts and findings, the Miscellaneous Application is allowed and the Registry is directed to list this case for hearing on 30th March, 2021. 3. In the result, the Miscellaneous Application filed by the assessee is allowed.” 8. The Counsel for the assessee has also placed before us an Affidavit in original citing the reasons for the delay in filing of the present Miscellaneous Application for the impugned years under consideration and submitted that the assessee was precluded from genuine and bona fide reasons for not being able to file the Miscellaneous Application within the stipulated time. 9. In the case of Om Prakash Sangwan vs. ITO 94 taxmann.com 394 (Delhi), the High Court made the following observations: “3. Rule 24 of the Income Tax Appellate Tribunal's Rules and the other provisions of both the Income Tax -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 MA Nos.37 to 40/Ahd/2023 (in ITA Nos. 2678 to 2681/A/17) Xcellon Education Ltd. vs. Addl.CIT Asst.Year –2015-16 & 2016-17 - 7 - to do so, implies that ii 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 docs 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 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,” 10. Accordingly, looking into the instant facts and the judicial precedents cited by the Counsel for the assessee before us, the Miscellaneous Application filed by the assessee is allowed for the impugned assessment years. 11. In the combined result, all the Miscellaneous Applications filed by the assessee are allowed, the order passed by ITAT is recalled and Registry is directed to fix the hearing in regular course. This Order pronounced in Open Court on 01/10/2024 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 01/10/2024 TANMAY, Sr. PS TRUE COPY आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, राजोकट / DR, ITAT, Rajkot 6. गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "