Ita/42/2018 Of Vijaya Hospitality And Resorts Ltd v. The Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 18TH DAY OF SEPTEMBER 2018 / 27TH BHADRA, 1940 ITA.No. 42 of 2018 AGAINST THE ORDER/JUDGMENT IN ITA 97/COCH/2015 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 2.3.2018 (ORDER MANO.15/COCH/2018) APPELLANT/S:/APPELLANT/ASSESSEE VIJAYA HOSPITALITY AND RESORTS LTD.37/991, 1ST FLOOR, EMMY SQUARE, SA ROAD, ELAMKULAM, ERNAKULAM - 682 020 (PAN ), REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR,MR.BABOO K.C BY ADVS.GOPIKRISHNAN NAMBIAR M.SRI.JOSON MANAVALANSRI.K.JOHN MATHAISRI.KURYAN THOMASSRI.PAULOSE C. ABRAHAMSRI.P.GOPINATHSRI.RAJA KANNAN RESPONDENT/S:/RESPONDENT/REVENUE THE COMMISSIONER OF INCOME TAXKOCHI - 682 018. C R BUILDINGS, I S PRESS ROAD, ERNAKULAM, ADV.SRI.PKR MENON, SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, INCOME TAX DEPT. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.09.2018, ALONG WITH ITA.43/2018 & ITA.38/2018, THE COURT ONTHE SAME DAY DELIVERED THE FOLLOWING: ITA NOS.38, 42 & 43/18 -2- I.T.A.Nos.38, 42 and 43 of 2018 K.Vinod Chandran, J. JUDGMENT These appeals arise from the order of theTribunal, for the three assessment years, 2008-09,2009-10 and 2011-12. The order impugned is onerejecting the applications to recall an ex-parteorder of the Income Tax Appellate Tribunal, findingthem to be applications filed for rectification, way beyond the time permitted. Theapplications were rejected for reason of they havingbeen filed beyond the six months' period as providedunder Section 254(2) of the Income Tax Act, 1961('Act' for short). 2.The learned counsel for the appellant- assessee argues that there was no warrant fortreating the applications as one for rectification.Though there is no specific application forrestoration as provided in the Act, Rule 24 of theIncome Tax Appellate Tribunal Rules, 1963 ('ITAT ITA NOS.38, 42 & 43/18 Rules' for short) provides for hearing of an appealex-parte when there is default by the appellant andalso provides for setting aside the ex-parte orderand restoration of the appeal, if the Tribunal issatisfied of sufficient cause for the default; here the non-appearance of the party and the Advocate. Inthe present case, when appeals filed for therespective years came up for hearing before theTribunal on 19.11.2015, they were dismissed byAnnexure-D order. It was also specifically providedin the order that “if the assessee on a later stagegives explanation in regard to its non-appearancebefore the Tribunal on the date of hearing before theTribunal by filing a Miscellaneous Application as perthe ITAT Rules and if the Bench is so satisfied theseappeals of the assessee can be recalled for hearingon merits.“ 3.We are of the opinion that the Tribunal erred insofar as treating the present applications as rectification applications. Though an application ITA NOS.38, 42 & 43/18 for restoration is not specifically provided; hearingof an appeal after declaring the appellantex-parte and dismissal for reason of non-appearanceof the appellant are procedural in nature andsufficient prescriptions have been made in the ITAT Rules as noticed hereinabove, for restoration andhearing the appeal on merits. In such circumstances,the applications filed ought to have been treated asone filed for setting aside the ex-parte order andthe appeals ought to have been restored to be heardon merits. We also notice that there was no order onmerits passed by the Tribunal at the earlier stageand the appeals were dismissed giving liberty to theappellant to restore the same on sufficient causebeing shown. ITA NOS.38, 42 & 43/18 for restoration is not specifically provided; hearingof an appeal after declaring the appellantex-parte and dismissal for reason of non-appearanceof the appellant are procedural in nature andsufficient prescriptions have been made in the ITAT Rules as noticed hereinabove, for restoration andhearing the appeal on merits. In such circumstances,the applications filed ought to have been treated asone filed for setting aside the ex-parte order andthe appeals ought to have been restored to be heardon merits. We also notice that there was no order onmerits passed by the Tribunal at the earlier stageand the appeals were dismissed giving liberty to theappellant to restore the same on sufficient causebeing shown. We would have normally remanded the matter backto the Tribunal for fresh consideration. However,noticing that it would only lead to multiplicity ofproceedings, we ourselves would consider the reasonsstated by the appellant for the delay. It is seen ITA NOS.38, 42 & 43/18 from the affidavit filed produced as Annexure-E,before the Tribunal that there was a Company Appealpending before the National Company Law AppellateTribunal (NCLAT), New Delhi for reason of disputeshaving arisen within the Management and between theDirectors. Notice on the appeal is said to have beenreceived by one of the Directors, who have beenspecifically removed as per the order of the NCLAT.The present management came into office on the basisof the NCLAT order which is dated 24.5.2017. Theapplications themselves are filed on 20.12.2017. Thedismissal of the earlier appeals were on 19.11.2015.Though sufficient cause has been shown, we are of theopinion that the appeals can be directed to beconsidered by the Tribunal only on terms. We, hence,direct the appellant to pay an amount of Rs.25,000/-(Rupees twenty five thousand only) each for theassessment years in each of the appeals before us tothe Chief Minister's Distress Relief Fund within aperiod of one month from the date of receipt of ITA NOS.38, 42 & 43/18 -6- certified copy of this judgment. On production ofreceipt of the same by the appellant before theTribunal, there shall be restoration of the appealsand the same shall be considered on merits. We makeit clear that the appellant would be entitled to taxbenefits, if any, with the payment of the aforeasidamount to the Chief Minister's Distress Relief Fund. Sd/- K.VINOD CHANDRAN JUDGE 18/09/18 Sd/- ASHOK MENON JUDGE APPENDIX IN ITA NO.42/2018 PETITIONER'S/S EXHIBITS: ANNEXURE A A TRUE COPY OF THE ORDER DATED 27.09.2013ISSUED UNDER SECTION 271C PASSED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX (TDS), KOCHI. ANNEXURE B A TRUE COPY OF THE ORDER DATED 24.11.2014FOR THE ASSESSMENT YEAR 2011-12 ISSUED BYTHE COMMISSIONER OF INCOME TAX (APPEALS),KOCHI ITA NOS.38, 42 & 43/18 ANNEXURE CA TRUE COPY OF THE APPEAL MEMORANDUM DATED 23.10.2013 FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN. ANNEXURE DA TRUE COPY OF THE ORDER DATED 19.11.2015ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, DISMISSING ANNEXURE C APPEAL. ANNEXURE EA TRUE COPY OF THE PETITION FOR RESTORATION DATED 20.12.2017 (ALONG WITH ANNEXURES) ANNEXURE F A TRUE COPY OF THE COMMON ORDER DATED 02.03.2018 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. //TRUE COPY// PS TO JUDGE.