2007 (4) TMI 117 - HC - Income Tax

Appeal to Appellate Tribunal Tribunal dismissed the appeal of assessee in the ground that no one present on his behalf for consideration in view of rules 19 and 20 of IT(AT) Rules, 1963 Held, tribunal is misread and misapplied the rule and accordingly allow the appeal of assessee

Summary

Issues:
Appeal maintainability under Income-tax (Appellate Tribunal) Rules, 1963.

Analysis:
The judgment dealt with the issue of the maintainability of an appeal under the Income-tax (Appellate Tribunal) Rules, 1963. The primary question of law was whether the Income-tax Appellate Tribunal was justified in dismissing the appeal as not maintainable based on rules 19 and 20 of the said Rules. The appeal in question was filed by the assessee against the order of the Commissioner of Income-tax (Appeals) regarding additions made in the trading account. It was noted that neither the assessee nor their representative was present during the hearing before the Tribunal, despite the notice being served as per rules 19 and 20. The Tribunal's decision to dismiss the appeal on grounds of non-maintainability was challenged.

The court examined rules 19, 20, and 24 of the Income-tax (Appellate Tribunal) Rules, 1963. Rule 19 mandates notifying parties about the date and place of the appeal hearing, and sending a copy of the memorandum of appeal to the respondent. Rule 20 specifies allowing a reasonable time for the respondent to appear and answer the appeal. Rule 24 deals with situations where the appellant does not appear during the hearing, allowing the Tribunal to dispose of the appeal on merits after hearing the respondent. However, if the appellant later provides sufficient cause for non-appearance, the Tribunal can set aside the ex parte order and restore the appeal.

The court found that the Tribunal's decision to dismiss the appeal as not maintainable was incorrect. The appeal was competent under section 253 of the Income-tax Act, and the Tribunal misinterpreted rules 19 and 20. While the Tribunal could have proceeded ex parte under rule 24 due to the absence of the assessee or their representative, it failed to do so. As a result, the appeal was not heard on its merits, and the Tribunal's decision on maintainability was deemed erroneous.

In conclusion, the court set aside the Tribunal's order dismissing the appeal and restored it to the file of the Income-tax Appellate Tribunal, Jaipur. The parties were directed to appear before the Tribunal on a specified date, with no costs imposed.