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TMI Blog2013 (10) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to correct the same under Section 254(1) of the Act as contended by the petitioner or under Section 254(2) of the Act as contended by the revenue – Held that:- if there is an error apparent on the face of the record, Section 254(2) of the Act alone is applicable. Where Parliament has provided a specific provision in the Act to deal with a particular situation, it is not open to ignore the same and apply some other provision. Section 254(2) of the Act empowers the Tribunal to correct/rectify its order only within four years from the date of the order which is sought to be rectified. Is there limitation applicable, if an application is to be filed against the order, which is void – Held that:- Reliance has been placed on the Apex Court judgment in the case of Sneh Gupta v/s. Dev Sarup [2009 (2) TMI 744 - SUPREME COURT]., wherein it has been held that It is not the law that where the decree is void, no period of limitation shall be attracted at all - Therefore, in the present case also the period of four years from the date of order sought to be rectified/recalled will apply as provided in Section 254(2) of the Act. This is so even if it is assumed that the order dated 6 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber 2007. In view of the above, no appeal would be available under Section 260A of the Act from the order dated 10 April 2013. However, as the issue raised in the petition is of crucial importance in the passing of orders under the Act by the Tribunal viz. the issue of interpretation of Rule 24 of the Income Tax Appellate Tribunal Rules, 1963 ( Tribunal Rules ), Section 254(1) and (2) of the Act we have entertained this petition in our extraordinary writ jurisdiction. 5) The issues which arise for consideration in the present petition are as under: a) Whether the Tribunal has power in terms of Rule 24 of the Tribunal Rules to dismiss an appeal before it without considering the merits of the appeal and only on the ground for want of prosecution? b) Whether the application for recall of an order dismissing the petitioner's appeal for want of prosecution is an application which falls for consideration under Section 254(1) of the Act or under Section 254(2) of the Act? c) Whether in the event it is held in (b) above that the application is under Section 254(1) of the Act, is the Tribunal barred from entertaining an application for recall of an order by any period of limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impression that the process of filing of Miscellaneous Application was complete and according to them they were waiting for a notice for hearing of the Miscellaneous Application from the Tribunal. g) It was sometime in July 2012 (no specific date mentioned) when the petitioner was preparing for the hearing of its appeal for a subsequent assessment year, it noticed that though a draft Miscellaneous Application was in the file, an acknowledged copy of the same from the Tribunal, was not available in its record. On enquiry with the Tribunal the petitioner learnt that no Miscellaneous Application for recalling of the order dated 6 December 2007 was on the file of the Tribunal. h) It was in the above circumstances that on 6 August 2012 the petitioner filed a Miscellaneous Application before the Tribunal seeking to recall the order dated 6 December 2007 passed by the Tribunal relating to assessment year 200001. i) On 8 March 2013, the Tribunal heard the petitioner on its Miscellaneous Application. By an order dated 10 April 2013, the Tribunal dismissed the Miscellaneous Application on the ground that the application for recall had been filed beyond a period of 4 years from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in; d) The delay in moving the Miscellaneous Application on 6 August 2012 for recall of order dated 6 December 2007 was on account of genuine mistake /misunderstanding and no sooner the appellant realized the same in July 2012 an application was filed within a month for recall of the same. Thus, in the facts of the case, there was no delay and/or laches on the part of the petitioner; and e) The interests of justice would require that the order dated 6 December 2007 be recalled and the matter be heard on merits. This is for the reason that the petitioner's representatives were not present at the time when the matter was called out by the Tribunal but reached soon thereafter to be informed that the matter has been dismissed. However, the petitioner's representative were unable to mention the appeal before the Tribunal on that very day to apply for recall of the order dismissing its appeal only on account of such a practice of mentioning not being permitted by the Tribunal. Consequently, the petitioner was unable to have the order of dismissal for nonprosecution recalled on 4 December 2007 itself and correct the injustice. 8) On the other hand, Mr. Suresh Kumar, learned Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (2) The Appellate Tribunal may at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under subsection (1), and shall make such amendment is the mistake is brought to its notice by the assessee or the [Assessing] Officer: Provided that an amendment which has the effect of enhancing an amount or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard. Provided further...... Rule24 of the Income Tax Tribunal Rules [Hearing of appeal ex parte for default by the appellant. Where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorized representative when the appeal is called on for hearing. The Tribunal may dispose of the appeal on merits after hearing the respondent: Provided tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matters. It is made clear whether or not to allow the application made on mentioning by the parties is for the Tribunal to decide in exercise of its discretion. 11) Now turning to the merits of this petition, it is contended by the petitioner that the order passed on 6 December 2007 on its appeal was an order passed in breach of Rule 24 of the Tribunal's Rules. We find that when the appellant is not present before the Tribunal when the appeal is called out for hearing the Tribunal could either adjourn the hearing of the appeal in its inherent jurisdiction or in terms of Rule 24 of the Tribunal Rules dispose of the appeal on merits after hearing the respondent. In this case the Tribunal has dismissed the petitioner's appeal for non prosecution. The Tribunal has not considered the merits nor heard the respondents on merits before dismissing the appeal. Thus the Tribunal has not exercised its inherent jurisdiction of adjourning the appeal or in terms of Rule 24 of the Tribunal Rules of deciding the appeal on merits after hearing the respondents. We find that in terms of Rule 24 of the Tribunal Rules the option of dismissing an appeal for default is not available to the Tribunal. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on merits even in the absence of the appellant. This would logically follow from the decision of the Apex Court in S. Chennippa Mudaliar (supra). 13) This Court in the matter of Chemipol vs. Union of India (244) E.L.T. 497 (Bom.) while dealing with the powers of Customs Excise and Service Tax Appellate Tribunal to dismiss an appeal for default has observed that though every Court or Tribunal has an inherent power to dismiss the proceeding for non prosecution yet this inherent power is lost where the statute requires the Court or the Tribunal to hear the appeal on merits. In this case Rule 24 of the Tribunal Rules mandates the Tribunal to decide the appeal on merits even in absence of the appellant after hearing the respondents. In view of the above, we hold that the Tribunal did commit an error in passing the order dated 6 December 2007 in dismissing the appeal on the ground of want of prosecution. Therefore, in such a case the appellant ( i.e. petitioner herein) is entitled to move the Tribunal to set right the breach of Rule 24 of the Tribunal Rules and have an order passed in breach thereof to be set aside. 14) The next issue that arises for consideration is whether an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the miscellaneous application is filed on 6 August 2012 i.e. beyond four years of the order dated 6 December 2007 which is sought to be rectified. 15) It was next contended that in any event Section 254(2) of the Act would have no application on the ground that Miscellaneous Application made in August 2012 is under the proviso to Rule 24 of the Tribunal Rules which does not have any period of limitation. Moreover in such cases, it is contended that the application is not to rectify an error in the order but is an application to set aside an order. We find that the miscellaneous application made by the petitioner on 6 August 2012 could not have been made under the proviso to Rule 24 of the Tribunal Rules. This is for the reason that the proviso would be applicable only when the Tribunal has exercised its power on the basis of the main part of Rule 24 of the Tribunal Rules i.e. deciding the appeal on merits after hearing the respondents. This would be evident from the fact that the proviso to Rule 24 of the Tribunal Rules clearly states: Provided that where an appeal has been disposed of as provided above and the appellant appears afterwards..... Thus the applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record and as a consequence therefore, Tribunal can even recall its order. In the above case before the Apex Court on 27 October 2000 the Tribunal dismissed the appeal of Stock Exchange holding that it was not entitled to exemption under Section 11 read with Section12 of the Act. On 13 November 2000 the Stock Exchange filed a rectification application under Section 254(2) of the Act before the Tribunal. The Tribunal by its order dated 5 September 2001 allowed the application and held that there was mistake apparent on the record which required rectification. Accordingly, the Tribunal recalled its order dated 27 October 2000 for the purpose of entertaining the appeal afresh. The revenue filed a writ petition in the Gujarat High Court challenging the order dated 5 September 2001. The above challenge by the revenue was turned down by the Gujarat High Court. The revenue carried the matter in appeal to the Apex Court which also dismissed the appeal of the revenue. The Apex Court observed that the Tribunal in its original order while dismissing the Stock Exchange (assessee's) appeal overlooked binding decisions of the jurisdictional High Court. This mistake was corrected by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order can effectively be resisted in law only by obtaining a decision of Court. Further the Supreme Court in Sneh Gupta v/s. Dev Sarup (2009) 6 SCC 194 has observed We are concerned herein with the question of limitation. The compromise decree, as indicated herein before, even if void was required to be set aside. A consent decree as is well known, is as good as a contested decree. Such a decree must be set aside if it has been passed in violation of law. For the said purpose, the provisions contained in Limitation Act 1963 would be applicable. It is not the law that where the decree is void, no period of limitation shall be attracted at all. Therefore, in this case also the period of four years from the date of order sought to be rectified/recalled will apply as provided in Section 254(2) of the Act. This is so even if it is assumed that the order dated 6 December 2006 is a void order. 19) We shall now answer the questions arising in this case as raised by us in Paragraph 4 above as under :- Question(a): No. The Tribunal has no power in terms of Rule 24 of the Tribunal Rules to dismiss an appeal before it for non prosecution. Question(b): The Miscellaneous appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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