2024 (12) TMI 664 - AT - Wealth-tax

Ex parte order passed in the Wealth Tax Appeals - failure to make compliance during the course of the appeal - seeking to recall the ex parte order passed - HELD THAT - As there is no delay in terms of Rule 24 and 25 of the Income Tax (Appellate Tribunal) Rules 1963 in seeking to recall the ex parte order passed in the Wealth Tax Appeals and furthermore in the instant case considering that the assessee is based in London the erstwhile representative assessee was a super senior citizen who was based at Lucknow and died during the course of the proceedings we feel that there are sufficiently compelling circumstances which explained the failure to make compliance during the course of the appeal and the first set of misc. applications in Allahabad. With regard to Ld Sr DR s argument that there was a considerable gap between the dismissal of the miscellaneous applications in 2018 and the filing of these miscellaneous applications we observe that the circumstances indicate that the representative assessee was unaware of such disposal and recall the Hon ble Supreme Court s observation in the case of Collector of Land Acqusition vs. Mst. Katiji Ors 1987 (2) TMI 61 - SUPREME COURT that ordinarily a litigant does not stand to benefit in lodging an appeal date and refusing to condone a delay can result in a meritorious matter being thrown out at the very threshold and the cause of justice being defeated and further that there is no presumption that delay is occasioned deliberately on account of culpable negligence or on account of malafide because a litigant does not stand to benefit by resorting to delay. In view of the fact that we have already held that this is not a case of rectification of mistake but of recall of an order decided ex-parte and without consideration of merits in accordance with the provisions of Rule 24 of the Income Tax (Appellate Tribunal) Rules 1963 for which no timelines are prescribed we recall the orders passed. Applications of the assessee is allowed.

Summary

Issues Involved:

1. Restoration of dismissed appeals for non-prosecution.
2. Validity of ex parte dismissal without decision on merits.
3. Timeliness and admissibility of miscellaneous applications.
4. Transfer of appeals to a different bench due to representative's inability to attend.
5. Application of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.

Detailed Analysis:

1. Restoration of Dismissed Appeals for Non-Prosecution:

The primary issue was the assessee's appeal in WTA Nos. 01 to 05/Alld/2010, which had been dismissed for non-prosecution due to the absence of representation at the hearing scheduled on 16.05.2011. The assessee's counsel had submitted an adjournment application citing personal reasons (a family marriage), which was not considered, leading to the dismissal. The assessee argued that this dismissal was an apparent mistake and sought restoration of the appeal, emphasizing that the case was not decided on its merits.

2. Validity of Ex Parte Dismissal Without Decision on Merits:

The judgment addressed the procedural lapse where the ITAT dismissed the appeal ex parte without considering the merits, contrary to Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963. It was noted that an appeal must be decided on merits even if the assessee is absent, and the Tribunal should recall an ex parte order if the assessee shows reasonable cause for non-appearance. The Tribunal found that the original dismissal did not comply with these requirements.

3. Timeliness and Admissibility of Miscellaneous Applications:

The Revenue argued that the miscellaneous applications filed by the assessee were time-barred under section 254(2), which stipulates a six-month limitation period. However, the Tribunal clarified that the applications were not for rectification under section 254(2) but for recalling an ex parte order under Rule 24, which does not prescribe a limitation period. The Tribunal cited precedents to support this distinction and admitted the applications.

4. Transfer of Appeals to a Different Bench:

The assessee requested the transfer of appeals from the Allahabad Bench to the Lucknow Bench, citing the representative's inability to attend hearings in Allahabad due to her age and health. The Tribunal acknowledged the practical difficulties faced by the super senior citizen representative and noted the consistent efforts to seek transfer. Although the initial requests were not granted due to procedural reasons, the Tribunal recognized the merit in considering such a transfer for effective representation.

5. Application of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963:

The Tribunal emphasized the importance of Rule 24, which mandates that appeals be decided on merits even in the absence of the assessee. The Tribunal found that the original dismissal did not adhere to this rule, as it was based solely on non-appearance without evaluating the case's merits. Consequently, the Tribunal decided to recall the ex parte order and restore the appeals to their original position, allowing for a fresh hearing on merits.

In conclusion, the Tribunal allowed the assessee's applications, recalling the ex parte orders and restoring the appeals for a hearing on merits, thereby ensuring compliance with procedural fairness and justice.