2004 (5) TMI 22 - HC - Income Tax

This appeal is preferred by the Revenue against the order whereby the application of the assessee for recalling an order passed ex parte, was allowed by the Income-tax Appellate Tribunal - Revenue raised a question that the Tribunal has no power to review the entire order - In the instant case, the Tribunal decided the appeal on the merits and thereafter the Tribunal was approached for setting aside the ex parte order. The rules framed under section 255 of the Income-tax Act permit the Tribunal to set aside the order and to restore the matter for hearing in accordance with law - there is no substantial question of law and, therefore, this revenue s appeal is required to be dismissed

Summary

Issues:
1. Review of an order passed ex parte by the Income-tax Appellate Tribunal.
2. Interpretation of rule 24 of the Income-tax Appellate Tribunal Rules, 1963.
3. Comparison with previous judgments regarding dismissal of appeals for default.

Issue 1: Review of an order passed ex parte by the Income-tax Appellate Tribunal
The appeal was filed by the Revenue challenging the Tribunal's decision to recall an ex parte order passed against the assessee for the assessment year 1993-94. The Revenue contended that the Tribunal lacked the power to review the entire order, citing a decision that the Tribunal could only amend its order and not recall it. However, the court clarified that the Tribunal had the authority to set aside an ex parte order and restore the appeal for disposal in accordance with law.

Issue 2: Interpretation of rule 24 of the Income-tax Appellate Tribunal Rules, 1963
The court examined rule 24 of the Income-tax Appellate Tribunal Rules, 1963, which allows the Tribunal to dispose of an appeal on merits even in the absence of the appellant, with the provision to set aside the order and restore the appeal if sufficient cause for non-appearance is shown. The court highlighted the importance of ensuring appeals are decided on their merits and not dismissed due to the absence of the appellant.

Issue 3: Comparison with previous judgments regarding dismissal of appeals for default
The judgment referenced previous cases to emphasize the necessity of deciding appeals on merits and not dismissing them for default. It compared the provisions of the Income-tax Act and the Tribunal rules with past decisions to establish that the Tribunal has the power to set aside an ex parte order and restore the appeal for proper disposal. The court dismissed the appeal by the Revenue, affirming the Tribunal's decision to recall the ex parte order and restore the matter for hearing in accordance with the law.

In conclusion, the court upheld the Tribunal's authority to set aside an ex parte order and restore the appeal for proper disposal, emphasizing the importance of deciding appeals on their merits and ensuring that appellants have the opportunity to present their case effectively.