2024 (11) TMI 571 - HC - Income Tax

Rectification u/s 254(2) - recalling order disposing of the appeal ex-parte - By the application sufficient cause was shown but the Tribunal arbitrarily dismissed the same - adjournments obtained by petitioner - HELD THAT - Tribunal considered the appeal disposal order, wherein it had been specifically recorded that what had not been collected in the last five years would obviously not be possible (to be collected) in 20 days and, therefore, the adjournment sought was nothing but challenge to functioning of the Bench. It was said to be not an error made by the Tribunal. This reason though is on the question of rectification, the contention on adjournment was also thereby dealt with. However, the Tribunal failed to see that it was to obtain satisfaction from the application, on causes shown for not appearing on the date of hearing. Cause alleged was indisposition of the learned advocate. We find from the application, that apart from annexing therewith medical certificate, also annexed were additional grounds of appeal etc., filed therewith for kind consideration of the Bench. The miscellaneous application therefore disclosed documents, which the disposal order had said as could not be disclosed in twenty days. We are persuaded to interfere with impugned order. We may add that Rabindra Kumar Mohanty 2020 (3) TMI 1326 - ORISSA HIGH COURT is of no assistance to petitioner because view taken was on requirement of the Tribunal to deal with an appeal on merits where appellant was absent but respondent had appeared and urged its contention(s). Impugned order is set aside and quashed. The miscellaneous application is allowed and the appeal restored.

Summary

Issues:
Interference with order of Income Tax Appellate Tribunal, application for recalling order, rule 24 of Income Tax (Appellate Tribunal) Rules, 1963, sufficiency of cause for non-appearance, rectification under section 254(2) of Income Tax Act, 1961, adjournments obtained by petitioner, consideration of cause for absence, restoration of appeal.

Analysis:
The petitioner, represented by Mr. Panda, sought interference with the order of the Income Tax Appellate Tribunal concerning the assessment year 2014-15. The petitioner's appeal was disposed of ex-parte, and the Tribunal dismissed the application for recalling the order, despite sufficient cause being shown. Mr. Panda argued that the Tribunal should have considered the petitioner's request for recall to restore the appeal, rather than focusing solely on rectification (para 1).

Mr. Panda relied on a previous judgment to support his argument, emphasizing Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, which allows for setting aside ex-parte orders and restoring appeals if sufficient cause for non-appearance is shown (para 2). On the other hand, Mr. Kedia, representing the revenue, pointed out that the petitioner had obtained numerous adjournments and failed to adhere to the dates fixed for the hearing, leading the Tribunal to dismiss the appeal. He argued that the Tribunal's decision was justified and the writ petition should be dismissed (para 3).

The Court examined the application made by the petitioner under section 254(2) of the Income Tax Act, 1961, which deals with rectification. While acknowledging the Tribunal's consideration of rectification, the Court also noted the Tribunal's reasoning for not being satisfied with the cause shown for non-appearance on the hearing date (para 4-5). The Tribunal's order highlighted the delay in the appeal process and expressed skepticism about the adjournment sought, viewing it as a challenge to the Tribunal's functioning. However, the Court observed that the Tribunal failed to properly assess the cause alleged for non-appearance, which was the advocate's indisposition (para 5).

Upon reviewing the petitioner's application and the documents annexed, including a medical certificate and additional grounds of appeal, the Court found merit in the petitioner's case. The Court disagreed with the Tribunal's reasoning and decided to set aside the impugned order, allowing the appeal to be restored (para 6). The Court clarified that a previous judgment cited by the petitioner was not directly applicable to the current situation. The Court ultimately set aside the impugned order, quashed it, and directed the petitioner to communicate the order to the Tribunal for the restoration of the appeal (para 7).

In conclusion, the writ petition was disposed of in favor of the petitioner, with the impugned order being set aside and the appeal restored, subject to compliance with the Court's directions (para 7-8).