Tca/952/2013 Of Commissioner Of Income Tax v. Shri P.venkatesan

IN THE HIGH COURT OF JUDICATURE OF MADRAS DATED: 21.06.2016 CORAM: THE HONOURABLE MR.JUSTICE S.MANIKUMARandTHE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR Tax Case(Appeal).Nos.952 to 954 of 2013and M.P.Nos. 1 to 1 of 2013 Commissioner of Income-Tax,Chennai ... Appellant in all Appeals-vs- 1. Shri.P.Venkatesan... Respondent in TCA.No.952/132. Smt.S.Anuradha... Respondent in TCA.No.953/133. Shri.S.Srinivasan... Respondent in TCA.No.954/13 Tax Case Appeals filed under Section 260A of the Income TaxAct, 1961 against the common order of the Income Tax AppellateTribunal, Chennai 'C' Bench, dated 03.05.2013 passed inM.P.Nos.30 to 32/Mds/2013 in ITA Nos.1378 to 1380/Mds/20012respectively. For Appellant:Mr.J.Narayanasamyin all appealsSenior Standing Counsel for Income Tax Dept.For Respondent :Mr.M.Vaidyanathanin all appealsfor Mr.S.LokaiahCOMMON JUDGMENT [Judgment of the Court was made by S.MANIKUMAR, J.] Correctness of the common order made in M.P.Nos.30 to32/Mds/2013 in ITA Nos.1378 to 1380/Mds/2012 respectively, ofIncome Tax Appellate Tribunal, 'C' Bench, Madras, dated03.05.2013 is challenged in the instant appeals on the followingsubstantial questions of law. "1. Whether on facts and circumstances of the case,the Tribunal was right in recalling its original orderwhich was passed by it after considering the issue onmerits? https://hcservices.ecourts.gov.in/hcservices/ 2. Whether on facts and circumstances of the case, isorder of the Income Tax Appellate Tribunal, recallingits earlier order not amount to review of its originalorder?" 2. Material on record discloses that being aggrieved by thecommon order of the Commissioner of Tax Appeal No. XI, Chennaifor the assessment year 2007-08, four appeals have been filed inITA Nos.1377 to 1380/Mds/2012 by the department in respect offour assessees. Before ITAT 'C' Bench, Chennai, the AssistantCommissioner of Income Tax, Circle XI, Chennai, appellanttherein was represented by the departmental representative.There was no appearance on behalf of the assessees, either inperson or through representative. Going through the material onrecord, ITAT 'C' Bench, Chennai, vide the common order dated27.11.2012, allowed the appeals, in favour of the department.Thereafter, the assessees have filed MP.Nos.29 to 32/Mds/2013 torecall the order dated 27.11.2012 of Income Tax AppellateTribunal in ITA Nos.1377 to 1380/Mds/2012. After considering therival submissions, vide the common order dated 03.05.2013,Income Tax Appellate Tribunal, 'C' Bench, Chennai, has recalledthe orders dated 27.11.2012, against which, the instant appealshave been filed by the Commissioner of Income Tax, Chennai. 3. Though, Mr.J.Narayanasamy learned standing counsel forthe Income Tax Department vehemently argued that the tribunalought not to have recalled the common order, made by it in ITANos.1377 to 1380/Mds/2012 dated 27.11.2012, decided on merits,we are not inclined to accept the said contentions for tworeasons. 4. Firstly, in exercise of the powers conferred by sub-section (5) of Section 255 of the Income Tax Act, 1961, (43 of1961), the Appellate Tribunal, has framed Income-Tax (AppellateTribunal) Rules, 1963 to regulate the procedure of the AppellateTribunal and the procedure of the Benches of the Tribunal. TheRules are called as Income-Tax (Appellate Tribunal) Rules, 1963.Admittedly in the case on hand, the assessees were therespondents in the appeals preferred by the department beforethe Income-Tax Appellate Tribunal, 'C' Bench, Chennai. Asstated supra, department was represented. But, none appeared onbehalf of the assessees In the given situation, Rule 25 of theIncome-Tax (Appellate Tribunal) Rules, 1963 reads thus. 4. Firstly, in exercise of the powers conferred by sub-section (5) of Section 255 of the Income Tax Act, 1961, (43 of1961), the Appellate Tribunal, has framed Income-Tax (AppellateTribunal) Rules, 1963 to regulate the procedure of the AppellateTribunal and the procedure of the Benches of the Tribunal. TheRules are called as Income-Tax (Appellate Tribunal) Rules, 1963.Admittedly in the case on hand, the assessees were therespondents in the appeals preferred by the department beforethe Income-Tax Appellate Tribunal, 'C' Bench, Chennai. Asstated supra, department was represented. But, none appeared onbehalf of the assessees In the given situation, Rule 25 of theIncome-Tax (Appellate Tribunal) Rules, 1963 reads thus. "Where, on the date fixed for hearing or any otherday to which the hearing may be adjourned, theappellant appears and the respondent does not appear inperson or through an authorised representative when theappeal is called on for hearing, the tribunal maydispose of the appeal on merits after the hearing theappellant." 5. Reading of the above, makes it clear that when therespondent does not appear in person or through an authorisedrepresentative, the tribunal is empowered to dispose of theappeal on merits, after hearing the appellant. By notificationNo.F-71, Ad(AT)/2002 dated 01.06.2004, proviso has been added toRule 25 of the Income-Tax (Appellate Tribunal) Rules, 1963,which is extracted hereunder: "provided that where an appeal has been disposedof as provided above and the respondent appearsafterwards and satisfies the tribunal that there wassufficient cause for his non appearance when the appealwas called on for hearing, the tribunal shall make anorder setting aside the exparte order and restore theappeal." 6. By virtue of the proviso to Rule 25 of the Income-Tax(Appellate Tribunal) Rules, 1963, added by notification No.F-71,Ad(AT)/2002 dated 01.06.2004, a right is conferred on therespondent to seek for recalling of the order passed exparte,even though the same is on merits. 7. The expression, "as provided above", in the openingsentence of the proviso, means and includes that even if theappeal is disposed of on merits, after hearing the appellant,the same can be recalled by the tribunal, if the respondentappears afterwards and satisfies the tribunal that there wassufficient cause for his non appearance. Thus, if sufficientcause is shown the tribunal is obligated to consider the sameand make an order setting aside the exparte order, no matter,whether it is an order simplicitor or on merits. Thus, Income-Tax (Appellate Tribunal) Rules, 1963, empower the tribunal torecall an order passed on merits, subject to satisfaction of thecause shown for non appearance. 8. In the instant appeal, Commissioner of Income Tax,Chennai has raised a substantial question of law as to whetheron facts and circumstances of the case, the order of the IncomeTax Tribunal, recalling its earlier order, not amount to reviewof its original order. 9. Perusal of the common order made in MP.Nos.29 to32/Mds/2013 to recall the order dated 27.11.2012 shows thatbefore ITAT, Madras, the appellant has not questioned the powerof the tribunal, in recalling the impugned orders. The onlycontention raised before the tribunal appears to be that whenthe assessees had not entered appearance at the time of hearingof the appeals, due to their negligence, there were no reasonfor the tribunal to recall the orders. Mere recalling anearlier order, in exercise of the powers conferred on thetribunal under the proviso to Rule 25 of Income-Tax (Appellate https://hcservices.ecourts.gov.in/hcservices/ Tribunal) Rules, 1963, would not amount to review of itsoriginal order. 9. Perusal of the common order made in MP.Nos.29 to32/Mds/2013 to recall the order dated 27.11.2012 shows thatbefore ITAT, Madras, the appellant has not questioned the powerof the tribunal, in recalling the impugned orders. The onlycontention raised before the tribunal appears to be that whenthe assessees had not entered appearance at the time of hearingof the appeals, due to their negligence, there were no reasonfor the tribunal to recall the orders. Mere recalling anearlier order, in exercise of the powers conferred on thetribunal under the proviso to Rule 25 of Income-Tax (Appellate https://hcservices.ecourts.gov.in/hcservices/ Tribunal) Rules, 1963, would not amount to review of itsoriginal order. 10. In the light of the statutory provision and discussion,we are of the considered view that both the substantialquestions of law raised by the appellant are to be answeredagainst the Revenue and accordingly, done. The Tax Case Appealsare dismissed. No costs. Consequently, the connectedMiscellaneous Petitions are closed. Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant RegistrararsTo1. The Commissioner of Income-Tax, (Appeals No.XI)Chennai.2. The Registrar, Income Tax Appellate Tribunal, C Bench, Chennai.+ 2 ccs to Mr.S. Lokaiah, Advocate Sr.34808Tax Case(Appeal).Nos.952 to 954 of 2013KGK(CO)EU 21.07.16