2020 (4) TMI 476 - AT - Income Tax

Condonation of delay filling Rectification u/s 254(2) - delay of 304 days in filing of the miscellaneous application - HELD THAT - As relying on case OM PRAKASH SANGWAN VERSUS ITO, WARD-33 (4) , NEW DELHI 2018 (5) TMI 1789 - DELHI HIGH COURT we hold that the application of the assessee is not barred by limitation. On merits, the assessee has appeared before us and satisfied us that there was sufficient cause for his non-appearance when the appeal was called for hearing. The Tribunal had not adjudicated this appeal on merits, as per law. Thus, we set aside the order of this Tribunal and restore the appeal in terms of proviso to Rule 24 of the Income Tax Appellate Tribunal Rules, 1963. The registry is directed to post the appeal for hearing on 03/09/2019. As this date was pronounced in the open court, no separate notice of hearing shall be issued to either party. Miscellaneous application of the assessee is allowed.

Summary

Issues:
Delay in filing miscellaneous application, applicability of time limitation for appeals dismissed for non-prosecution, sufficiency of cause for non-appearance before the Tribunal, restoration of appeal on merits.

Delay in filing miscellaneous application:
The assessee filed a miscellaneous application seeking recall of the Tribunal's order, which was dismissed for non-prosecution. The application was delayed by 304 days. The Revenue argued that an order cannot be passed beyond six months as per section 254(2) of the Act. However, the assessee relied on a Tribunal decision and a judgment of the Delhi High Court to support that time limitation does not apply to appeals dismissed for non-prosecution.

Applicability of time limitation for appeals dismissed for non-prosecution:
The Tribunal referred to a case where it was held that the ITAT must decide appeals on merits and not merely reject them for non-prosecution. The Hon'ble Delhi High Court's decision stated that there is no specific period of limitation for approaching the Tribunal to restore appeals dismissed ex-parte. Following this, the Tribunal concluded that the application for recall of the ex-parte order was not barred by limitation.

Sufficiency of cause for non-appearance before the Tribunal:
The Tribunal considered the reasons for the assessee's non-appearance during the appeal hearing and found that there was sufficient cause for the absence. Citing the proviso to Rule 24 of the Appellate Tribunal Rules, 1963, the Tribunal recalled the ex-parte order and restored the appeal to its original number for a fresh hearing.

Restoration of appeal on merits:
The assessee satisfied the Tribunal that there was a valid reason for non-appearance during the initial appeal hearing. As the Tribunal had not adjudicated the appeal on merits, it set aside its previous order and restored the appeal in accordance with the rules. The registry was directed to schedule the appeal for a new hearing date without issuing separate notices to the parties.

This comprehensive analysis of the judgment addresses the issues of delay in filing the miscellaneous application, the applicability of time limitation for dismissed appeals, the sufficiency of cause for non-appearance, and the restoration of the appeal on merits. The Tribunal's decision was based on legal principles and precedents, ensuring a fair and just outcome for the parties involved.