2021 (2) TMI 1092 - AT - Income Tax

Condonation of delay in filing Rectification application - delay in filing this appeal against ex-parte order on account of non-prosecution - HELD THAT - The assessee has explained the reason for not filing the Miscellaneous Application within six months from the end of the month in which the order was passed as elaborated supported by an affidavit and copies of other documents/details. The assessee has also pointed out that previous tax consultant has not attended his tax matter satisfactorily and new tax consultant has obtained various documents, these circumstances and his ill health caused delay in filing this appeal against ex-parte order which was passed on account of non-prosecution. After taking into consideration the facts narrated by the assessee supported by an affidavit/documents it appears that there was reasonable cause for non-appearance and delay in filing the Miscellaneous Application against ex-parte order passed on account of non-prosecution. Therefore, keeping in view of Rule 24 of the Income Tax (Appellate Tribunal, 1963) and after taking into consideration the decision of Hon ble Jurisdictional High Court cited in the case of Dolphin Metal (India) Ltd. vs. ITO. 2021 (2) TMI 999 - GUJARAT HIGH COURT we condone the delay in filing the Miscellaneous Application. Considering the above facts and findings, the Miscellaneous Application is allowed and the Registry is directed to list this case for hearing on 30th March, 2021.

Issues Involved:
1. Recall of the ex-parte order dismissing the appeal for non-prosecution.
2. Delay in filing the Miscellaneous Application for restoration.
3. Applicability of Rule 24 of the ITAT Rules, 1963.
4. Consideration of the Vivad Se Vishwas Scheme.
5. Reasonable cause for non-appearance and delay.

Issue-wise Detailed Analysis:

1. Recall of the ex-parte order dismissing the appeal for non-prosecution:
The assessee sought to recall the ITAT Ahmedabad order dated 20th Feb 2018, which dismissed his appeal for want of prosecution. The appeal was dismissed because no representation was made on behalf of the assessee on the hearing date, and no adjournment application was filed.

2. Delay in filing the Miscellaneous Application for restoration:
The assessee filed the Miscellaneous Application beyond the prescribed six months from the date of the order. The delay was attributed to the assessee's lack of awareness of the order, as he had stopped his business and was under depression, undergoing treatment at Samvedana Neuro Psychiatric EEC Clinic. The delay was further compounded by the misrepresentation by an intermediary handling his tax matters and the subsequent discovery of the order only after the TRO issued recovery notices.

3. Applicability of Rule 24 of the ITAT Rules, 1963:
Rule 24 stipulates that if an appeal is disposed of ex-parte, it can be reinstated if the appellant shows sufficient cause for non-appearance. The Tribunal noted that the assessee filed the application after 579 days of the original order, and despite being aware of the order post-issuance of TRO summons, no immediate steps were taken to recall the order. However, the Tribunal acknowledged that there is no time limit prescribed under Rule 24 for filing such an application, provided sufficient cause is demonstrated.

4. Consideration of the Vivad Se Vishwas Scheme:
The assessee expressed his desire to file a declaration under the Vivad Se Vishwas Scheme to settle the matter. The Tribunal noted that the scheme's FAQ No. 59 requires the order of admission by the Tribunal, which the assessee could not file until the ex-parte order was recalled. The scheme was operational until 28th Feb 2021, and the assessee sought early disposal of his application to avail of the scheme benefits.

5. Reasonable cause for non-appearance and delay:
The Tribunal considered the assessee's affidavit and supporting documents, which detailed his ill health, depression, and the mishandling of his tax matters by the previous consultant. The Tribunal found these reasons to constitute a reasonable cause for non-appearance and the delay in filing the Miscellaneous Application. The Tribunal also referenced the decision of the Hon’ble Jurisdictional High Court in the case of Dolphin Metal (India) Ltd. vs. ITO, which emphasized that appeals should not be dismissed for non-prosecution without considering the merits.

Conclusion:
The Tribunal condoned the delay in filing the Miscellaneous Application, citing Rule 24 of the ITAT Rules and the decision of the Hon’ble Jurisdictional High Court. The Tribunal allowed the Miscellaneous Application and directed the Registry to list the case for hearing on 30th March 2021. The order was pronounced in the open court on 24-02-2021.

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