T.balashankar Reddy v. The Income Tax Officer, Nellore And Others

HONOURABLE SRI JUSTICE J.CHELAMESWARAndHONOURABLE SRI JUSTICE D.APPARAO FRIDAY, NINETH DAY OF JUNE TWO THOUSAND SIX WRIT PETITION No.11022 of 2006 Between: T.Balashankar Reddy ..Petitioner Vs. 1.The Income Tax Officer, Nellore and others ..Respondents *** ORDER (Per Hon’ble Sri DAR, J): Heard the learned counsel for the appellant and the learnedStanding Counsel for Income Tax.With their consent the writpetition is being disposed of at the stage of admission.2.The writ petitioner did business of wholesale distribution ofIndian made Foreign Liquor (IMFL) at Nellore.He filed income tax-returns for the assessment year 198889 on 28.02.1990.TheAssessing Officerinter alia made two additions to returnedincome on the ground that he did not prove them.Against theorder of assessment, dated 26.03.1991, he preferred appeal beforethe CIT-A, Vijayawada.The matter was remanded once again.However, the assessment was made by order, dated 30.03.1994,confirming earlier order.Aggrieved by the said assessment order,an appeal was preferred.However, the same was confirmed byorder, dated 26.12.1995.Against the said order, a further appealwas preferred before the Income Tax Appellate Tribunal.However, the Tribunal without hearing the matter dismissed the‘’-appeal in default for nonprosecution by order, dated 29.09.2000.Since the order was not served on him, the petitioner filed M.P.76/Hyd/05 to recall the dismissal order, dated 29.09.2000 with arequest to the appellate Tribunal to recall the ex parte order sunderRule 24 (proviso) of Income Tax Appellate Tribunal Rules, 1963and dispose of the matter after hearing.The said application wasalso dismissed by order, dated 17.02.2006 holding that theapplication was barred by time and that the appellate could notadduce sufficient reason for his non appearance.As against thesaid order, the petitioner filed this writ to quash the said order on the ground that it was contrary to Rule 24 (proviso) of the IncomeTax Appellate Tribunal (ITAT) Rules, 1963 (for brevity‘Rules,1963’). 3.It is not in dispute that the petitioner could not appear beforethe appellate Tribunal, when the appeal was preferred by him.Thenotice of intimation though was sent to his not last known addressit was returned with a postal endorsement that it was ‘insufficient’address.The appellate Tribunal dismissed the appeal in defaultfor non prosecution holding that no useful purpose would beserved to send notice once again, and that the appeal was very oldand assessee was not interested to pursue the matter.Coming toknow of it, the writ petitioner filed miscellaneous petitionrequesting for an opportunity to canvass the matter as he had nonotice of the appeal.The said application was dismissed on theground that it was belated.It was observed that justice could bedone for those persons who are vigilant and not for indolent.4.Ex facie the impugned order cannot sustain in the teeth ofRule 24 of Appellate Tribunal Rules, 1963.For benefit we reproduce the same. “Where on the day fixed for hearing or on any otherdate to which the hearing may be adjourned, theappellate does not appear in person or through anauthorized representative when the appeal is calledon for hearing.The Tribunal may dispose of theappeal on merits after hearing the respondent. Provided that where an appeal has been disposed ofas provided above and the appellate appearsafterwards and satisfies the Tribunal that there wassufficient cause for his non appearance, when theappeal was called on for hearing, the Tribunal shallmake an order setting aside the ex parte order andrestoring the appeal.” 5.Necessarily, the appellate Tribunal has to dispose it of the reproduce the same. “Where on the day fixed for hearing or on any otherdate to which the hearing may be adjourned, theappellate does not appear in person or through anauthorized representative when the appeal is calledon for hearing.The Tribunal may dispose of theappeal on merits after hearing the respondent. Provided that where an appeal has been disposed ofas provided above and the appellate appearsafterwards and satisfies the Tribunal that there wassufficient cause for his non appearance, when theappeal was called on for hearing, the Tribunal shallmake an order setting aside the ex parte order andrestoring the appeal.” 5.Necessarily, the appellate Tribunal has to dispose it of the appeal on merits.It cannot dismiss it for default.Even in anextreme case, where the appellate Tribunal could dispose of theappeal on merits after hearing the respondent, even then whenappellant on later point of time approaches the appellate Tribunal-and show sufficient cause of his earlier nonappearance, theTribunal shall restore the appeal and has to dispose it of on merits.6.In the instant case the assessee by way of miscellaneouspetition approached the tribunal and pleaded that he was notserved with any notice of hearing.It is not the case of appellateTribunal even, that the earlier notice of hearing was served.Itcould have allowed protanto in the view of the fact that earlier the––appeal was dismissed for default and not on merits contrary toRule 22 of the Rules. 7.When admittedly no notice was served on the petitioner,and when the appellate Tribunal could not dispose of the appeal indefault, the impugned order can no longer sustain.It could haveheard the respondent and disposed of appeal on merits.Despitethe fact that the petitioner has come with an application, instead ofhearing the appeal, it was also dismissed on the ground that it wasbarred by limitation, though no period of limitation is prescribedeither under the Act or under the Rules.A dismissal of an appealbefore the appellate Tribunal for default does not arise.Such acourse is not contemplated either under the Act or Rules framedthereunder.The order is liable to be set aside. 8.In the result, the writ petition is allowed, the impugned--order, dated 17022006, is quashed.The appellate Tribunal isdirected to restore the appeal to its file and dispose of the matteron merits after hearing both parties within a period of one month,from the date of receipt of a copy of this order.No costs. _____________________ (J.CHELAMESWAR, J) ______________________ (D.APPARAO, J)June 9, 2006.Kvr