R/Tax Appeal v. Deputy Commissioner Of Income Tax, Circle 2

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 268 of 2021=============================================RANJANABEN MUKESHBHAI PATEL Versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2 ============================================= Appearance: HIREN J TRIVEDI(8808) for the Appellant(s) No. 1M R BHATT & CO.(5953) for the Opponent(s) No. 1 ============================================= CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKOREDate : 01/02/2022ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.This Tax Appeal under Section 260A of the Income TaxAct, 1961 (for short ‘the Act, 1961’) is at the instance of anassessee and is directed against the order passed by theIncome Tax Appellate Tribunal, ‘SMC’ Bench, Ahmedabaddated 13.03.2020 in the ITA No.1714/Ahd/2018 for the A.Y.2015-16. 2.This Tax Appeal came to be admitted by this Court on thefollowing two substantial questions of law: “(i) Whether the Hon’ble Tribunal has committed substantialerror of law in not assigning any reasons while dismissing theappeal of the appellant and passing a non-speaking and crypticorder? (ii) Whether the Hon’ble ITAT has erred in not following themandate of section 254 of the Act read with Rule 24 of theIncome Tax (Appellate Tribunal) Rules, 1963 in not disposingthe appeal of the appellant on merits?” 3.We have heard Mr. Hiren Trivedi, the learned counselappearing for the appellant-assessee and Mr. Manish Bhatt, the learned Senior Counsel assisted by Mr. Karan Sangani, thelearned counsel appearing for the Revenue. 4.It appears from the materials on record that theappellant-assessee being dissatisfied with the order passed bythe DCIT, CIR(2), Bhavnagar dated 14.11.2017 under Section143(3) of the Act, preferred an appeal before theCommissioner of Income Tax bearing No.CIT(A)-6/139/17-18.The appeal preferred by the appellant-assessee came to bepartly allowed by the CIT(A) vide order dated 15.05.2018. Theappellant herein being dissatisfied with the order passed bythe CIT(A), challenged the same before the Income TaxAppellate Tribunal. It appears and as fairly submitted by thelearned counsel appearing for the appellant that the appellant-assessee was not in a position to appear before the AppellateTribunal. 5.In such circumstances referred to above, the AppellateTribunal observed in paragraph 12.1 of its impugned order asunder: “12.1 Since the assessee has not rebutted or controverted thefindings of the ld.CIT(A) by way of any written submission,therefore we find no reason to interfere with the findings of theId.CIT(A) and hence the ground raised by the assessee isdismissed.” 5.1.The Appellate Tribunal ultimately dismissed the appeal. 6.The principle argument of Mr. Trivedi, the learnedcounsel appearing for the assessee is that even if the appellantwas not in a position to appear before the Tribunal, theTribunal was obliged to dispose of the appeal on merits. TheTribunal ought not to have affirmed the order passed by theCIT(A) only on the ground that the appellant failed to make any submissions before the Tribunal. 7.Mr. Trivedi, invited our attention to Rule 24 of the IncomeTax (Appellate Tribunal) Rules,1963 which reads thus: “[Hearing of appeal ex parte for default by the appellant. 24. Where, on the day fixed for hearing or on any other date towhich the hearing may be adjourned, the appellant does notappear in person or through an authorised representative whenthe appeal is called on for hearing, the Tribunal may dispose ofthe appeal on merits after hearing the respondent : submissions before the Tribunal. 7.Mr. Trivedi, invited our attention to Rule 24 of the IncomeTax (Appellate Tribunal) Rules,1963 which reads thus: “[Hearing of appeal ex parte for default by the appellant. 24. Where, on the day fixed for hearing or on any other date towhich the hearing may be adjourned, the appellant does notappear in person or through an authorised representative whenthe appeal is called on for hearing, the Tribunal may dispose ofthe appeal on merits after hearing the respondent : Providedthat where an appeal has been disposed of asprovided above and the appellant appears afterwards andsatisfies the Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, theTribunal shall make an order setting aside the ex parte orderand restoring the appeal.]” 8.In such circumstances referred to above, Mr. Trivediprays that both the substantial questions of law as framed bythis court may be answered in favour of the assessee andagainst the Revenue. Mr. Trivedi, would pray that theimpugned order passed by the Tribunal may be quashed andset aside and the matter may be remitted back to the Tribunalwith the direction that the appeal filed by the assessee beheard on its own merits. 9.On the other hand, Mr. Bhatt, the learned Senior Counselappearing for the Revenue has vehemently opposed thisappeal submitting that none of the two questions of law asproposed by the appellant could be termed as substantialquestions of law. Mr. Bhatt, pointed out something verypertinent which should be taken cognizance of. Mr. Bhatt,pointed out that the appellant herein has already preferred anapplication before the Appellate Tribunal invoking the provisoto Rule 24 referred to above. Mr. Bhatt would submit that by way of such application filed by the appellant herein, theappellant is seeking to point out to the Tribunal that there wassufficient cause for his non appearance when the appeal wastaken up for hearing on 12.03.2020. 10. Having heard the learned counsel appearing for theparties and having gone through the materials on record, weare of the view that as the appellant has already filed anapplication before the Appellate Tribunal invoking the provisoto Rule 24 of the Rules, 1963, he should pursue suchapplication. We are of the view that we should not interferewith the impugned order passed by the Appellate Tribunal onlyon this short point that the application filed by the appellantherein invoking the proviso to Rule 24 of the Rules, 1963 ispending for hearing before the Appellate Tribunal. We directthe Appellate Tribunal to take up such application filed by theappellant herein for hearing and pass an appropriate order inaccordance with law at the earliest. 11. In such circumstances referred to above, we decline toanswer the two substantial questions of law framed by thisCourt at the time of admission of this appeal leaving it open forthe Income Tax Appellate Tribunal to decide the appeal filed bythe appellant-assessee under Rule 24 of the Rules, 1963. In theevent if such application is rejected for any good reason by theAppellate Tribunal then in such circumstances, the appellantmay avail appropriate legal remedy available to him in law. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J)