2019 (1) TMI 1596 - AT - Income Tax

Condonation of delay - delay in filing the M.P of Rectification u/s 254 - reasonable cause for non appearance on the date of hearing - HELD THAT - In this case, this was not the issue before N.S. MOHAN VERSUS THE INCOME TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF INCOME TAX AUTHORITY 2018 (5) TMI 1099 - MADRAS HIGH COURT that whether the tribunal can recall an exparte order of the tribunal under Rule 24 in a case where the M. P. filed by the assessee is time barred. From the above paras reproduced from this judgement of Hon ble Madras High Court, it is seen that this judgement is not in relation to the M.P. dismissed by the Tribunal for filing it beyond the limitation period. In this case, the Writ Petition was filed by the assessee against an ex-parte Tribunal order and the said exparte Tribunal order was set aside by Hon ble Madras High Court and the matter was restored back to the Tribunal for a fresh decision. Hence this judgement is also not rendering any help to assessee in the facts of the present case. None of the four judgements cited by assessee is rendering any help to assessee in the present case. In fact as per the judgement of Hon'ble Karnataka High Court, the issue is covered against the assessee because in this case, it was held by Hon'ble Karnataka High Court that the Tribunal cannot go beyond the provisions of section 254(2) and condone the delay in filing the M.P. Hence by respectfully following this judgement of Hon'ble Karnataka High Court, we hold that the present M.P. filed by the assessee is time barred and the same is not admissible. Even Non finalization of counsel and non filing of paper book cannot be considered as a reasonable cause for non appearance on the date of hearing. - the M.P. filed by the assessee is dismissed.

Issues Involved:
1. Delay in filing the Miscellaneous Petition (M.P.)
2. Applicability of Rule 24 of the Income Tax Appellate Tribunal Rules, 1963
3. Relevance of cited judicial pronouncements
4. Tribunal's power to condone delay beyond six months
5. Merits of the M.P. in terms of non-appearance on the hearing date

Detailed Analysis:

1. Delay in filing the Miscellaneous Petition (M.P.):
The assessee filed the M.P. on 08.10.2018, requesting the recall of the ex-parte Tribunal order dated 22.11.2016. The Registry issued a defect memo pointing out a delay of 497 days in filing the M.P. As per section 254(2) of the IT Act, the M.P. must be filed within six months from the end of the month in which the Tribunal order was passed. Therefore, the allowable period for filing the M.P. expired on 31.05.2017, rendering the current M.P. time-barred.

2. Applicability of Rule 24 of the Income Tax Appellate Tribunal Rules, 1963:
The assessee argued that the request was not for rectification but for recalling the order under Rule 24 of the Income Tax Appellate Tribunal Rules, 1963, which does not specify a limitation period. The Tribunal, however, noted that Rule 24 cannot override the statutory limitation period prescribed under section 254(2) of the IT Act.

3. Relevance of cited judicial pronouncements:
- S.P. Balasubrahmanyam Vs. ACIT: The Tribunal noted that the Hon'ble Madras High Court dismissed the appeal due to a delay of just six days, which does not support the assessee's case of a 497-day delay.
- CIT Vs. Shri P. Venkatesan & Ors.: This case involved the Tribunal recalling its order on merit, not addressing the issue of filing an M.P. beyond the limitation period.
- Sri Muninaga Reddy Vs. ACIT: The Hon'ble Karnataka High Court held that the Tribunal cannot condone delays beyond six months as per section 254(2), but the High Court can exercise its powers under Articles 226 and 227 of the Constitution to condone the delay. This judgment, therefore, does not assist the assessee's case before the Tribunal.
- N.S. Mohan Vs. ITO: The case involved an ex-parte order being set aside by the Hon'ble Madras High Court, but it did not address the issue of time-barred M.P.s.

4. Tribunal's power to condone delay beyond six months:
The Tribunal reiterated that it does not have the authority to condone delays beyond the six-month period prescribed under section 254(2) of the IT Act. The judgment of the Hon'ble Karnataka High Court in Sri Muninaga Reddy Vs. ACIT emphasized that while the High Court can condone such delays, the Tribunal cannot.

5. Merits of the M.P. in terms of non-appearance on the hearing date:
Even if the M.P. were filed within the permissible period, the Tribunal found no merit in the reasons provided for non-appearance. The assessee claimed that the senior Accounts officer appeared to file an adjournment request, which was denied. The Tribunal noted discrepancies in the dates mentioned and found the reasons for non-appearance unsatisfactory. The Tribunal emphasized that the requirements of Rule 24 were not met, as the reasons for non-appearance were neither reasonable nor substantiated.

Conclusion:
The Tribunal dismissed the M.P. filed by the assessee as time-barred and lacking merit. The judgments cited by the assessee did not support the case for condoning the delay or recalling the ex-parte order. The Tribunal reiterated that it cannot condone delays beyond the statutory period and found the reasons for non-appearance inadequate. The order was pronounced in the open court.

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