2022 (4) TMI 1424 - AT - Income Tax

Ex-party order - Non-appearance of the assessee on the date of hearing either in person or through the counsel - proof of wilful default on the part of the assessee in not appearing - HELD THAT - It is an undeniable fact that as on the date of the final hearing in the appeal, the world was reeling under pandemic and the physical hearing was not restored to its full extent. Further, we found from the record that the assessee presented an application dt.07/01/2022, seeking adjournment of the matter to any date on or after 01/02/2022 on the ground that the tax consultants were to file the tax audit reports and to attend Registrar of Companies, the compliance of which was required before 31/01/2022. We further found from the record that this letter missed the attention of the Bench, which resulted in proceeding with the matter ex-parte and pronouncement of the order dt.02/01/2022. Actus curiae neminum gravabit, namely, the act of Court shall not prejudice anybody s case. We are satisfied that there was sufficient cause for the non-appearance of the assessee on the date of hearing either in person or through the counsel because of the pandemic as well as the requirement of the counsel to comply with the requirements of filing of returns under the Companies Act. Rule 24 of ITAT says that when once the Tribunal satisfied with the reason for non-appearance of the appellant, the order shall be set aside and the appeal has to be restored to file. Having satisfied with the cause for non-appearance of the assessee on the date of hearing, in view of this mandatory provision, we are inclined to accept the request of the assessee to set aside order and restore the appeal to file.

Summary

Issues: Application for recall of order due to non-appearance of assessee during a virtual hearing amidst pandemic conditions.

Analysis:
1. Application for Recall of Order: The assessee filed two Miscellaneous Applications seeking to recall the order dated 20/01/2022 in ITA Nos.321 & 322/Hyd/2018 for the AY.2009-10. The assessee cited the pandemic conditions as the reason for non-appearance on 17/01/2022, the day the order was passed ex-parte. Additional evidences were submitted on 07/01/2022, and the assessee believed an adjournment would be granted due to the ongoing pandemic situation. The Ld.AR relied on Rule 24 of the Income Tax Appellate Tribunal Rules, 1963, requesting an opportunity to contest the matter on merits.

2. Opposition by Ld. DR: The Learned DR opposed the petition, arguing that the matter was disposed of on merits, and the only remedy available to the assessee is to prefer an appeal. It was contended that there was no mistake apparent on the face of the record.

3. Judicial Analysis: The Tribunal considered the submissions from both sides and acknowledged the impact of the pandemic on the conduct of proceedings. It was noted that the assessee had applied for an adjournment on 07/01/2022 due to pending tax audit reports and compliance requirements under the Companies Act. The Tribunal found that the letter requesting an adjournment was missed, leading to the ex-parte order. Referring to the principle of "actus curiae neminum gravabit," the Tribunal held that the act of the Court shall not prejudice anyone's case.

4. Decision and Order: After reviewing the circumstances, the Tribunal found sufficient cause for the non-appearance of the assessee, considering the pandemic situation and compliance obligations. Relying on Rule 24 of the ITAT, which allows setting aside an order when satisfied with the reason for non-appearance, the Tribunal accepted the assessee's request to recall the order dated 20/01/2022 and restore the appeal. The Tribunal directed the Registry to fix the appeals for hearing on 19/05/2022, without issuing fresh notices, as both parties noted the next date of hearing in open court. Consequently, both Miscellaneous Applications were allowed, and the order was pronounced on 22nd April 2022.