2014 (1) TMI 294 - AT - Income Tax

Recall of ex-parte oredr - Held that - The Tribunal is empowered to set aside its order and restore the appeal only if the assessee satisfies the Tribunal that there was sufficient cause for non-appearance when the appeal was called on for hearing - The only reason given by the assessee for non-appearance on hearing date was demise of the senior counsel appointed by it - The juniors of the advocate did not give advice to the assessee with regard to the appeals pending before the Tribunal - From the order sheet of the record It can be observed that the Counsel of the assessee had filed adjournment petition on 03.12.2008, i.e, before his death and the appeals were then adjourned to 11.3.2009 - The assessee also holds equal responsibility to pursue the appeals - The assessee has simply shirked away from its responsibility by stating that the junior lawyer did not give advice to the assessee which cannot be accepted - All other explanations given by the assessee relate to the events that happened subsequent to the receipt of the order, which cannot be considered as a reasonable cause for non-appearance in terms of the proviso to Rule 24 and Rule 25 of the Tribunal - The assessee has failed to show that there was a reasonable cause for non-appearance on the date of hearing of the appeal as prescribed in the proviso to Rule 24 and Rule 25 of the Appellate Tribunal Rules, 1963 Decided against assessee.

Issues Involved:
1. Delay in filing miscellaneous applications.
2. Validity of reasons for non-appearance.
3. Applicability of Rule 24 and Rule 25 of the Appellate Tribunal Rules, 1963.
4. Examination of explanations provided by the assessee.
5. Consideration of mistakes apparent from the record.

Issue-wise Detailed Analysis:

1. Delay in Filing Miscellaneous Applications:
The assessee filed miscellaneous applications on 05-04-2013, seeking recall of an ex-parte common order dated 13-03-2009. This filing occurred after a delay of four years and 24 days from the date of the order. The Tribunal noted that the applications were filed significantly late, and the reasons for this delay were explained in a letter dated 23.09.2013.

2. Validity of Reasons for Non-appearance:
The assessee attributed the non-appearance to the illness and subsequent death of their Senior Advocate, Shri P. Balachandran, who passed away on 26.12.2008. The assessee claimed that they were under the bona fide belief that the advocate was attending the hearings. The Tribunal noted that the assessee did not take any steps to ensure the appeals were prosecuted after becoming aware of the advocate's demise. The Tribunal emphasized that a prudent business entity, especially a government undertaking, should have taken necessary steps to follow up on the appeals.

3. Applicability of Rule 24 and Rule 25 of the Appellate Tribunal Rules, 1963:
The Tribunal referred to Rule 24 and Rule 25, which allow for the setting aside of an ex-parte order if the appellant or respondent can show sufficient cause for non-appearance. The Tribunal noted that these rules do not prescribe a specific time limit for filing a petition to recall an ex-parte order. However, the Tribunal stressed that the appellant must demonstrate sufficient cause for non-appearance at the hearing.

4. Examination of Explanations Provided by the Assessee:
The Tribunal analyzed the explanations given by the assessee, which included:
(a) The illness and death of the Senior Advocate.
(b) The belief that the Assessing Officer would allow all expenses and depreciation under Section 57 of the Act.
(c) The delay in the Assessing Officer giving effect to the Tribunal's order.
(d) The realization that the facts were not sufficiently presented to the Tribunal.
(e) The absence of a specific time limit in Rule 24 and Rule 25 for recalling an ex-parte order.

The Tribunal found that the explanations were not convincing. It noted that the assessee, a government undertaking, should have taken proactive steps to ensure the appeals were prosecuted, especially after the death of their Senior Advocate. The Tribunal also observed that the assessee had taken a conscious decision not to pursue the matter based on advice from their Chartered Accountants, which cannot be considered a reasonable cause for non-appearance.

5. Consideration of Mistakes Apparent from the Record:
In the written submissions, the assessee pointed out apparent mistakes in the record. However, the Tribunal decided not to consider these mistakes in light of its decision to dismiss the miscellaneous applications due to the lack of reasonable cause for non-appearance.

Conclusion:
The Tribunal concluded that the assessee failed to show a reasonable cause for non-appearance at the hearing as required by the proviso to Rule 24 and Rule 25 of the Appellate Tribunal Rules, 1963. Consequently, the Tribunal dismissed all the miscellaneous applications filed by the assessee. The judgment was pronounced on 31st December 2013.

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