The Government Telecommunicationemployees Cooperative Society Ltd.,Chennai-1 v. The Income Tax Officer, Non Corporate Ward 12(3), Chennai-34

In the High Court of Judicature at Madras The Honourable Mr.Justice T.S.SIVAGNANAM The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN The Government TelecommunicationEmployees Cooperative Society Ltd.,Chennai-1...Appellant/Appellant in both Vs The Income Tax Officer, Non Corporate Ward 12(3), Chennai-34....Respondent/Respondent in both APPEALS under Section 260-A of the Income Tax Act, 1961,against the common order of the Income Tax Appellate TribunalChennai 'A' Bench, Chennai dated 15.3.2017 in I.T.A.Nos.2898 and2899/Mds/2016 respectively for the assessment years 2012-13 and2013-14 against the order passed by the Commissioner of IncomeTax (Appeals)-13 Chennai-34 made in ITA.No.21/CIT(A)-13/AY2012-2013 & ITA.No.108/CIT(A)-13/Ay-2013-2015 dated 04.08.2016against the assessement order passed by the Income Tax Officer,Non-Corporate ward 12(3) (Erstwhile Business ward IX(3) Chennai-6 made in PAN. dated 20.03.2015 for the assessmentyear 2012-13 and 2013-2014. These appeals, filed by the assessee under Section 260-A ofthe Income Tax Act, 1961 (hereinafter referred to as 'the Act')are directed against the common order dated 15.3.2017 inI.T.A.Nos.2898 and 2899/ Mds/2016 respectively for theassessment years 2012-13 and 2013-14. https://hcservices.ecourts.gov.in/hcservices/ 2. The assessee filed these appeals on the followingsubstantial questions of law: “i. Whether, under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was justified indismissing the appeal in limine withoutgoing into the merits of the case ? Andii. Whether the Income Tax AppellateTribunal was justified in exercising thepower given under Section 254 of the IncomeTax Act, 1961 in dismissing the appeal inlimine without appreciating the scope of theaforesaid provisions that the same should bedisposed of on merits ?” 3. We have heard Mr.A.S.Sriraman, learned counsel for theappellant and Mrs.V.Pushpa, learned Standing Counsel acceptingnotice for the respondent - Revenue. 4. The Tribunal, by the impugned common order dated15.3.2017, dismissed the appeals filed by the assessee on theground that none appeared on behalf of the assessee when thematters were called on that day. In doing so, the Tribunalrelied upon the decision of the Delhi Bench in the case of CITVs. Multiplan India P. Ltd. [reported in 38 ITD 320] and thedecision of the High Court of Madhya Pradesh in the case of lateTukojirao Holker Vs. Wealth Tax Commissioner [reported in 223ITR 480]. 5. Thereafter, the assessee filed two miscellaneouspetitions for restoring the appeals and in the said petitions,the assessee stated that the assessee's authorizedrepresentative was seated in the wrong Bench and consequently,when the cases were called, none appeared for the appellant –assessee. Though such a plea was raised by the assessee byfiling miscellaneous petitions, the Tribunal dismissed the sameby a common order dated 21.12.2018 on the ground that they weretime barred i.e. they were filed beyond the period of six monthsfrom the end of the month, on which, the common order was passedby the Tribunal. 6. The correctness of the decision of the Tribunal indismissing the appeals for non prosecution is no longer resintegra and has been decided in several cases by this Courtfollowing the decision of the Hon'ble Supreme Court in the case https://hcservices.ecourts.gov.in/hcservices/ of CIT Vs. S.Chenniappa Mudaliar [reported in (1969) 74 ITR 41].We had an occasion to consider the same issue in the decision inthe case of M/s.3M Electro and Communication India Pvt. Ltd. Vs.JCIT, Pondicherry [TCA.Nos.353 of 2019 dated 02.7.2019] whereinwe have held in paragraph 6 as follows : 6. The correctness of the decision of the Tribunal indismissing the appeals for non prosecution is no longer resintegra and has been decided in several cases by this Courtfollowing the decision of the Hon'ble Supreme Court in the case https://hcservices.ecourts.gov.in/hcservices/ of CIT Vs. S.Chenniappa Mudaliar [reported in (1969) 74 ITR 41].We had an occasion to consider the same issue in the decision inthe case of M/s.3M Electro and Communication India Pvt. Ltd. Vs.JCIT, Pondicherry [TCA.Nos.353 of 2019 dated 02.7.2019] whereinwe have held in paragraph 6 as follows : “Therefore, we are not convinced withthe reason given by the assessee statingthat they were not aware of the order passedby the Tribunal. Be that as it may, we findthat the Tribunal has rejected and dismissedthe appeal for want of prosecution. Thiscould not have been done in the light of thevarious decisions on the point, the earliestof which was the decision of the Hon'bleSupreme Court in CIT Vs. S.ChenniappaMudaliar reported in AIR 1969 SC 1068 whichwas followed in N.S.Mohan Vs. Income-taxAppellate Tribunal, Chennai reported in[2018]94taxmann.com92(Madras).Therefore, we are not to necessarilyinterfere with the order passed by theTribunal dismissing the matter for want ofprosecution. As observed by us earlier, theassessee was not diligent in prosecuting thematter and the reasons assigned by theassessee that they were not aware of theorder passed by the Tribunal is notconvincing. Nevertheless, the respondentDepartment would be entitled to tax theassessee only for the amount for which theyare liable to be taxed and by default theexcess tax cannot be recovered, which wouldbe an action without authority of law.Therefore, we deem it appropriate to giveone more opportunity to the assessee to filea reconciliation statement and for which thepurpose we send back the matter to theAssessing Officer subject to certainconditions. In finally, we were of theopinion that the assessee can be put onterms by directing them to deposit a certainsum of money with the Assessing Officer forbeing entitled to an opportunity to gobefore the Assessing Officer and place thereconciliationstatement.However,Mr.S.P.Chidambaram, learned counsel for theappellant, on instructions, from his client,submitted that virtually the entire amount of tax has been recovered from the assessee,partly remitted by the assessee and partlyadjusted from the refund, which was ordered.In the light of the said submission, we donot impose any condition for deposit of anysum of money.” 7. The other decisions are (i) by the Hon'ble First Bench of thisCourt in the case of N.S.Mohan Vs. ITAT,Chennai [reported in (2018) 94 taxmann.com92 (Madras)]; (ii) by a Division Bench of this Courtin the case of Smt. Ritha Sabapathy Vs. DCIT[TCA. No.169 of 2019 dated 19.2.2019]; and (iii) by a Division Bench of the GujaratHigh Court in the case of Sanket Estate &Finance (P) Ltd. Vs. CIT [reported in (2013)32 Taxmann. Com 342] wherein of the decisionin the case of Multiplan India (P) Ltd., wastaken note of and it was held that thereliance on the decision of the Tribunal inthe case of Multiplan India (P) Ltd., waserroneous, the operative portions of whichread as follows : 7. The other decisions are (i) by the Hon'ble First Bench of thisCourt in the case of N.S.Mohan Vs. ITAT,Chennai [reported in (2018) 94 taxmann.com92 (Madras)]; (ii) by a Division Bench of this Courtin the case of Smt. Ritha Sabapathy Vs. DCIT[TCA. No.169 of 2019 dated 19.2.2019]; and (iii) by a Division Bench of the GujaratHigh Court in the case of Sanket Estate &Finance (P) Ltd. Vs. CIT [reported in (2013)32 Taxmann. Com 342] wherein of the decisionin the case of Multiplan India (P) Ltd., wastaken note of and it was held that thereliance on the decision of the Tribunal inthe case of Multiplan India (P) Ltd., waserroneous, the operative portions of whichread as follows : '24. When the Supreme Court decided thecase of S.Chenniappa Mudaliar (supra), noamendment in rule in the Income TaxAppellate Tribunal Rules was made as yet.Rule 24 of the Income Tax Rules, 1963 makesit abundantly clear that the Tribunal cannotdismiss the appeal without adverting to themerits. Even on the day, on which, thehearing is adjourned, the appellant chosenot to appear in person or through anauthorized representative. It is incumbentupon the Tribunal to dispose of the appealon merits after hearing the respondent andafterwards if the appellant appears andsatisfies the Tribunal, sufficient cause forits non appearance on the date of hearing,the Tribunal can set aside the ex parteorder and restore the appeal. However,reliance of the Tribunal on the decision ofthe Delhi Bench in the case of MultiplanIndia (P) Ltd. (supra) is erroneous andtherefore, requires to be set aside. In the instant case, it can be noted from theletters addressed by the present appellantto the Tribunal that it was awaitingtransfer of both the appeals of 1998-99 and1999-2000 since CIT (Appeals) had reliedupon such orders of earlier years. 25. If the record of these appeals werenecessary for proceedings with the appeals,which were pending of the year 2001-02,2002-03, in the instant case, it was amatter of transfer from Mumbai Bench to theAhmedabad Bench of these appeals and thepresent appellant has made out sufficientcause indicating from the material placed onrecord that it had never abandoned thecause. On the contrary, it had consistentlypursued the matters as it was having adirect bearing on the appeals of subsequentyears. Even otherwise, what is therequirement of the law is of adjudication onmerit even when either side or both thesides choose not to contest. In view of theaforesaid, we are of the considered viewthat the Tribunal erred in dismissing theappeal only on the ground of non prosecutionwithout adverting to the merits of thematter and therefore, we set aside the orderimpugned dated 04.8.2006 passed by theTribunal and also remand the matter to theTribunal to adjudicate the same on merits.Appeal is allowed accordingly.' 8. Yet another decision on the same point is the decision ofa Division Bench of the Rajasthan High Court in the case ofTribhuvan Kumar Vs. CIT [reported in (2007) 294 ITR 401], inwhich, the substantial question of law itself as to whether thedecision of the Delhi Bench of the Tribunal in the case ofMultiplan India (P) Ltd., could have been applied to the facts ofthat case was decided in favour of the assessee. In the light ofthe above, the order impugned in this appeal has to benecessarily set aside and the substantial questions of law are tobe answered in favour of the assessee. 9. In the result, the above tax case appeals are allowed,the impugned common order dated 15.3.2017 and also the commonorder 21.12.2018 are set aside and the appeals in I.T.A.Nos.2898and 2899/Mds/2016 are restored to the file of the Tribunal for adecision on merits. The substantial questions of law are answered https://hcservices.ecourts.gov.in/hcservices/ in favour of the assessee. No costs. Consequently, the connectedCMP is closed. 9. In the result, the above tax case appeals are allowed,the impugned common order dated 15.3.2017 and also the commonorder 21.12.2018 are set aside and the appeals in I.T.A.Nos.2898and 2899/Mds/2016 are restored to the file of the Tribunal for adecision on merits. The substantial questions of law are answered https://hcservices.ecourts.gov.in/hcservices/ in favour of the assessee. No costs. Consequently, the connectedCMP is closed. -s/d- Assistant Registrar True Copy Sub-Assistant Registrar To1.The Income Tax Appellate Tribunal, Chennai 'A' Bench.2.The Income Tax Officer, Non Corporate Ward 12(3), Chennai-34.3.The Commissioner of Income Tax(Appeals)13Chennai-34+1 cc to Mr.M.Swaminathan & V.Pushpa Advocate sr70410+1 cc to Mr.S.Sridhar Advocate sr70086 TCA.Nos.607 & 608 of 2019and CMP.No.17652 of 2019bs(co)aa18/09/2019