2019 (5) TMI 943 - AT - Income Tax

Rectification of mistake u/s 254 - ex-parte order on merit - assessment was reopened by the AO to disallow the claim of higher depreciation as the assessee has not shown income from hire charges on dumpers, excavator or JCB - HELD THAT - Now the assessee has produced certain records to show that the income declared by the assessee includes hire charges in respect of the vehicle dumpers, excavator or JCB etc. Since, this record was not filed before the Tribunal earlier, therefore, the appeal of the assessee was heard and disposed of ex-parte. We are of the considered opinion that the factual aspect whether the assessee has received any income from hire charges is very crucial for deciding the issue of claim of higher depreciation on these machinery and vehicle. Though the conduct of the assessee after filing the appeal was sincere however, in the facts and circumstances of the case and in the interest of justice we grant one more opportunity to the assessee subject to cost of ₹ 5000/-. Accordingly, the impugned order dated 06.06.2018 of the Tribunal is recalled and the appeal of the assessee is directed to be heard and decided afresh. Miscellaneous application is allowed subject to cost.

Summary

Issues:
Recalling of Tribunal order for assessment year 2009-10 due to ex-parte dismissal, higher rate of depreciation disallowed by AO and CIT(A) on dumpers, trucks, excavator/JCB, failure to produce records before Tribunal, request for opportunity to present case and evidence.

Analysis:
The assessee filed a miscellaneous application seeking the recalling of the Tribunal's order dated 06.06.2018 for the assessment year 2009-10, where the appeal was dismissed ex-parte but on merits. The assessee's representative explained that an adjournment letter was sent on 01.06.2018 for the hearing on 04.06.2018, but it was not placed before the Bench, leading to the ex-parte dismissal. The main issue in the appeal was the disallowance of higher depreciation on dumpers, trucks, excavator/JCB, as income from hire charges was not considered by the authorities. The assessee requested the order to be recalled to present evidence showing income from hire charges.

The Department's representative opposed the application, highlighting the assessee's non-appearance before authorities and the Tribunal. The Tribunal had decided the appeal on merits due to the assessee's repeated non-appearances, indicating no apparent mistake for rectification under Section 254(2) of the Act. However, upon review, it was found that the assessment was reopened solely for disallowing higher depreciation due to lack of shown income from hire charges. The Tribunal acknowledged the importance of the income evidence for deciding the depreciation claim. Despite the sincere conduct of the assessee post-appeal filing, a new opportunity was granted with a cost of ?5000, and the order was recalled for a fresh hearing on 26.06.2019 without issuing a separate notice.

In conclusion, the miscellaneous application was allowed, and the Tribunal's order was recalled for the assessee to present evidence of income from hire charges, crucial for deciding the depreciation claim on machinery and vehicles. The decision was made in the interest of justice, granting the assessee another opportunity to be heard and decided afresh.