2013 (5) TMI 420 - HC - Income Tax

Revision u/s 264 in favor of assessee - Whether there is a provision under the Income Tax Act for recalling the order passed u/s 264 - earlier CIT had dismissed the application - as per the petitioner power to pass exparte order includes the power to recall the same notwithstanding absence of any express provision in respect thereof - Held that - Persuing the memo of revision/application filed under section 264 wherein it has been stated that no proper notice of hearing has ever been made on the assessee and the AO was totally incorrect in making the addition. No supporting material that the petitioner was not given opportunity of hearing or how the notice was not served has been pointed out therein. On the contrary, in the last paragraph of the assessment order it is mentioned by the Assessing Authority that the petitioner avoided the assessment proceedings. No material was filed by the assessee before the CIT to substantiate it. It is not the case in the writ petition that any supporting material in support of the grounds raised in the petition under section 264 was before the Commissioner of Income Tax who failed to consider it. In absence of any material to show that the assessment order was not correctly framed, the Commissioner of Income Tax, in absence of the assessee, was left with no option but to dismiss the revision. Even the writ petition does not disclose that any material was filed before the Commissioner on the basis of which one could arrive at the conclusion that the assessment order is bad either in law or fact. No merit in any of the submissions of the the petitioner.

Summary

Issues:
1. Assessment completed under section 144 of the Income Tax Act due to petitioner's non-appearance.
2. Dismissal of revision application under section 264 by the Commissioner of Income Tax.
3. Petitioner's application to recall the order of dismissal.
4. Legal arguments regarding the power to recall exparte orders and the duty of the Commissioner to decide on merits.
5. Lack of sufficient cause for non-appearance of the petitioner.
6. Evaluation of the contents of the recall application and the assessment order.
7. Lack of supporting material before the Commissioner to substantiate grounds raised in the petition under section 264.
8. Dismissal of the revision by the Commissioner in absence of the assessee.
9. Lack of merit in the submissions made by the petitioner's counsel.

Analysis:

1. The dispute in this case pertains to the Assessment Year 1998-1999, where the petitioner failed to appear before the Assessing Authority, leading to the completion of assessment under section 144 of the Income Tax Act.

2. The petitioner challenged the Assessment Order by filing a revision under section 264 before the Commissioner of Income Tax, which was subsequently dismissed due to the petitioner's absence on the fixed date.

3. Subsequently, an application to recall the dismissal order was filed by the petitioner, which was dismissed on the grounds that there is no provision under the Income Tax Act for recalling orders passed under section 264.

4. The legal arguments revolved around the power to recall exparte orders and the duty of the Commissioner to decide on merits, with references made to relevant case laws to support both sides of the argument.

5. The court found that the petitioner failed to establish sufficient cause for their non-appearance on the fixed date, as the reasons provided in the recall application were vague and lacked specificity regarding the nature and duration of the illness cited as the cause.

6. The assessment order indicated that the petitioner had been negligent in pursuing the case, as evidenced by repeated failures to appear for hearings, leading to the conclusion that the petitioner did not take the proceedings seriously.

7. Lack of supporting material before the Commissioner to substantiate the grounds raised in the petition under section 264 was noted, which contributed to the dismissal of the revision in the absence of the assessee.

8. The court emphasized that without any material demonstrating the incorrectness of the assessment order, the Commissioner had no option but to dismiss the revision, as there was no basis to conclude that the order was flawed in law or fact.

9. Ultimately, the court found no merit in the submissions made by the petitioner's counsel, leading to the dismissal of both writ petitions without any order as to costs.