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2013 (11) TMI 192 - AT - Income TaxApplication for Restoration of Appeal - Period of Limitation - Whether the ex parte order passed by the Tribunal can be recalled or rectified within the terms of section 254(2) after the expiry of limitation period of four years - Held that - The date of order, as envisaged in section 254(2) should be construed to mean the date when the order was received or communicated to either party - In the case, when the Assessee had received the order, the Assessee was well within the limitation to file the present miscellaneous application within the scope of section 254(2) of the Act, for recalling of the ex parte order. The above provisions provide that the rectification of any mistake apparent from the record or to amend any order passed by the Tribunal under sub-section (1) of section 254, can be done suo motu or when such mistake is brought to its notice and rectification is sought by the Assessee or the Department. The time frame prescribed is four years from the date of the order Following the Decision of Commissioner Of Income-Tax. Versus Multiplan India (Private) Limited. 1991 (5) TMI 120 - ITAT DELHI-D - the order sought to be recalled had been passed ex parte and had not been adjudicated on merits, therefore the order was recalled as the assessee was prevented by a reasonable and sufficient cause for not putting up the appearance on the date fixed for hearing - Therefore, in the interest of natural justice - the order for hearing of the appeal on merits was recalled - The Registry was directed to fix the appeal on out-of-turn basis within a period of three months - The Registry was also directed to serve the notice at the changed address of the assessee, as given in the Affidavit filed along with the present miscellaneous application Decided in favour of Assessee.
Issues Involved:
1. Restoration of the appeal dismissed ex-parte by the Tribunal. 2. Limitation period for filing an application for recalling the ex-parte order. 3. Interpretation of "date of order" under section 254(2) of the Income Tax Act. 4. Validity of the Tribunal's ex-parte order and whether it can be recalled on the grounds of non-communication. Issue-wise Detailed Analysis: 1. Restoration of the appeal dismissed ex-parte by the Tribunal: The assessee sought restoration of the appeal in ITA no. 6756/Mum/2012, which was dismissed ex-parte by the Tribunal for non-prosecution on 4th August 2006, for the assessment year 1990-91. The Tribunal had dismissed the appeal after noting that the assessee did not appear on multiple hearing dates. The assessee, a blind man aged over 62 years, claimed that his Chartered Accountant did not cooperate and failed to inform him about the hearing dates or the ex-parte order. The assessee only became aware of the order after the Income-tax Department initiated proceedings for the attachment and subsequent auction of his office property. 2. Limitation period for filing an application for recalling the ex-parte order: The application for recalling the ex-parte order was filed on 1st March 2012, which was beyond the limitation period by 576 days. The assessee argued that the limitation period should start from the date he received the order, which was 17th February 2012, not from the date the order was signed. 3. Interpretation of "date of order" under section 254(2) of the Income Tax Act: The assessee's counsel argued that the phrase "four years from the date of order" in section 254(2) should be interpreted as the date on which the order was communicated to the assessee. The counsel cited various Supreme Court and High Court decisions supporting this interpretation, including: - D. Saibaba v. Bar Council of India [2003] 6 SCC 186 - Madan Lal v. State of U.P., AIR 1975 SC 2085 - Vijay Kumar Ruia v. CIT [2011] 334 ITR 38 - Petlad Bulakhidas Mills Co. Ltd. v. Raj Singh [1959] 37 ITR 264 (Bom.) The Tribunal noted that the interpretation of "date of order" should align with the principles of fair play and natural justice, meaning the date when the order is communicated to the party concerned. 4. Validity of the Tribunal's ex-parte order and whether it can be recalled on the grounds of non-communication: The Tribunal acknowledged that the assessee, being blind and dependent on his Chartered Accountant, was not aware of the ex-parte order until much later. The Tribunal referred to the Supreme Court's judgment in Raja Harish Chandra Raj Singh v. Dy. Land Acquisition Officer, AIR 1961 SC 1500, which emphasized that the limitation period should start from the date the order is communicated to the affected party. The Tribunal also considered the Special Bench decision in Arvindbhai H. Shah v. Asstt. CIT [2004] 91 ITD 101 (Ahd.), which did not express an opinion on whether the limitation period should be counted from the service of the order. Conclusion: The Tribunal concluded that the "date of order" under section 254(2) should be construed as the date when the order is received or communicated to the party. Since the assessee received the order on 17th February 2012, the application for recalling the ex-parte order was within the limitation period. The Tribunal recalled the ex-parte order dated 4th August 2006 and directed the Registry to fix the appeal for hearing on merits within three months, ensuring that the notice is served at the assessee's updated address. Result: The assessee's miscellaneous application was allowed, and the ex-parte order was recalled for a hearing on merits.
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