D.b. Income Tax Appeal v. The Additional Commissioner Of Income Tax Range-I, Jaipur(Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 634 / 2009 M/S Lok Vikas Housing Funds Limited (Presently Lok Vikar HousingFinance Corporation Limited) Lok Vikas Bhawan, 3F1, ShivanandMarg, Malviya Nagar, Jaipur (Raj) Through Its, Aged About 56Years, Managing Director Lokesh Kumar Singh S/o Shri JagdishSingh R/o 81/33, Patel Marg, Mansarovar, Jaipur (Raj) ----Appellant Versus The Additional Commissioner of Income Tax Range-I, Jaipur(raj) ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sandeep Taneja For Respondent(s) : Mr. K.D. Mathur for Mr. R.B. Mathur _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGHJudgment 18/07/2017 1.By way of this appeal, the appellant has assailed thejudgment and order of the Tribunal whereby Tribunal hasdismissed the appeal on the ground of delay in filing theapplication for recalling the order dt. 7.12.2001 dismissing theappeal as unadmitted. 2.This court while admitting the appeal framed following substantial question of law:- “1. Whether the order dated 7.12.2001 passed bythe Income Tax Tribunal, Jaipur in ITANo.452/JP/99 dismissing the appeal as unadmittedis against the provisions of law containing in Rule19 and 20 read with Rule 24; and 2. Whether ITAT seriously erred in passing theimpugned order dated 25.2.2009 in M.A.No.21/JP/2008 rejecting the application for recalling the said order dated 7.12.2001 and tohear and decide the appeal on merits filed underRule 24 of Income Tax (Appellate Tribunal) Rules,1963 by wrongly applying provisions of Section254(2) of Income Tax Act, 1961?” 3.Counsel for the appellant Mr. Taneja pointed out theunamended provisions prior to 1.8.1987 the date on which theorder was passed particularly Rule 24 which reads as under:- “24. Dismissal of appeal for appellant’s defaultetc.-where on the day fixed for hearing or anyother day to which the hearing may beadjourned, the appellant does not appear whenthe appeal is called on for hearing, the Tribunalmay in its discretion either dismiss the appealfor default or may hear it ex parte. Provided that where the appeal has beendismissed for default and the appellant appearsafterwards and satisfies the Tribunal that therewas sufficient cause for his non-appearancewhen the appeal was called on for hearing, theTribunal shall make an order setting aside thedismissal and restoring the appeal.” 3.1After amendment w.e.f. 8.4.2002 Rule 24 provides asunder:- “24. Hearing of appeal ex parte for defaultby the appellant.- Where, on the day fixed for hearing or on anyother date to which the hearing may beadjourned, the appellant does not appear inperson or through an authorised representativewhen the appeal is called on for hearing, theTribunal may dispose of the appeal on meritsafter hearing the respondent: Provided that where an appeal has beendisposed of as provided above and the appellantappears afterwards and satisfies the Tribunalthat there was sufficient cause for his non-appearance when the appeal was called on forhearing, the Tribunal shall make an order settingaside the ex parte order and restoring theappeal.” 3.4Taking into consideration the language of the Rule 24 afteramendment, it is clear that tribunal could not have dismissed theappeal for default and ought to have decided the same on merits. 3.4He has relied upon the decision of this court in TribhuwanKumar and ors. vs. Commissioner of Income Tax and anr. reportedin (2007) 294 ITR 401 wherein it has been held as under:- Provided that where an appeal has beendisposed of as provided above and the appellantappears afterwards and satisfies the Tribunalthat there was sufficient cause for his non-appearance when the appeal was called on forhearing, the Tribunal shall make an order settingaside the ex parte order and restoring theappeal.” 3.4Taking into consideration the language of the Rule 24 afteramendment, it is clear that tribunal could not have dismissed theappeal for default and ought to have decided the same on merits. 3.4He has relied upon the decision of this court in TribhuwanKumar and ors. vs. Commissioner of Income Tax and anr. reportedin (2007) 294 ITR 401 wherein it has been held as under:- “6. Having considered the aforesaid threeprovisions, we are unable to comprehend the viewof the Tribunal that the assessee's appeal was notmaintainable in view of Rules 19 and 20 of theRules. Surely the appeal preferred by the assesseewas competent under Section 253of the IT Act.How, in the circumstances the Tribunal could holdthat the assessee's appeal from the order of theCIT(A) was not maintainable when the appeal layfrom the said order. The Tribunal misread andmisapplied Rules 19 and 20 of the Rules of 1963,in holding that the assessee's appeal was notmaintainable. If for any reason, the assessee wasnot being represented on the date of hearing, theTribunal could have proceeded for hearing of theappeal ex parte provided in Rule 24 but that wasnot done. The appeal has not been heard on themerits and the Tribunal erroneously held that theassessee's appeal is not maintainable in law.”provisions, we are unable to comprehend the viewof the Tribunal that the assessee's appeal was notmaintainable in view of Rules 19 and 20 of theRules. Surely the appeal preferred by the assesseewas competent under Section 253of the IT Act.How, in the circumstances the Tribunal could holdthat the assessee's appeal from the order of theCIT(A) was not maintainable when the appeal layfrom the said order. The Tribunal misread andmisapplied Rules 19 and 20 of the Rules of 1963,in holding that the assessee's appeal was notmaintainable. If for any reason, the assessee wasnot being represented on the date of hearing, theTribunal could have proceeded for hearing of theappeal ex parte provided in Rule 24 but that wasnot done. The appeal has not been heard on themerits and the Tribunal erroneously held that theassessee's appeal is not maintainable in law.” 6.Counsel for the respondent supported the order of thetribunal and contended that inspite of several opportunities, theappellant has not complied with the order and the order passed bythe tribunal is just and proper. 6.1He also contended that review application which waspreferred before the tribunal was after 4 years and tribunal hasrightly rejected the same having no power. 7.We are of the opinion that tribunal is misconceived on theissue raised by the appellant as the application was filed for recalling the order and not for rectification. In that view of thematter, the first issue we have decided in favour of the assessee.The tribunal ought to have reconsidered Rule 24 after amendmentand having failed to do so, both the orders are quashed and setaside. The tribunal will decide the merit afresh. 8.The issues are answered in favour of the assessee. The appeal stands allowed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Brijesh 75.