Wp/1931/2003 Of M/S. Ananda Nilayam v. Income Tax Officer

HON’BLE SRI JUSTICE L. NARASIMHA REDDYANDHON’BLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No. 1873, 1924 AND 1931 OF 2003 12-11-2014 BETWEEN M/s. Ananda Nilayam, Adoni, Kurnool District …Petitioner And Income Tax Officer, Ward-I, Adoni …..Respondents HON’BLE SRI JUSTICE L. NARASIMHA REDDYANDHON’BLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No. 1873, 1924 AND 1931 OF 2003 ORDER:(per the Hon'ble Sri Justice L. Narasimha Reddy) These three writ petitions are filed by the respondent in I.T.A Nos.1694.1695 and 1696/H/96 on the file of the Hyderabad Bench ‘A’ of the Income TaxAppellate Tribunal, Hyderabad (for short, ‘the Act’). In the returns filed for the assessment years 1990-91, 1991-92 and 1992-93, the petitioner made claim for deduction of certain amounts under Section 24(1) (x) of the Income Tax Act, 1961. The assessing officer did not allow thesame. In the appeals preferred by it, the Commissioner of Income Tax(Appeals), Vijayawada granted relief through order dated 13-06-1996. Aggrievedby that, the department filed three appeals referred to above. At one stage, the appeals were scheduled to be heard on 04-07-2001. Onbehalf of the petitioner, a letter was addressed on 30-06-2001 with a request toadjourn the matters to some other date. The Tribunal acceded to the requestand adjourned the appeals to 29-08-2001. On the ground that there was norepresentation for the petitioner, the Tribunal proceeded to hear the appeals and allowed the same through common order dated 30-08-2001 and the orderspassed by the Commissioner in favour of the petitioner were set aside. The petitioner filed M.P Nos.1, 2 and 3/Hyd/2003 under Rule 25 of theIncome Tax Appellate Tribunal Rules, 1963 (for short, ‘the Rules’), with aprayer to set aside the order dated 30-08-2001. It was pleaded that after therequest for adjournment was acceded to, the Tribunal did not intimate any otherdate for hearing and that for want of information, they could not appear beforethe Tribunal on 30-08-2001. The petitions were dismissed by the Tribunalthrough common order 17-04-2002. Hence, these writ petitions. Heard the learned counsel for the petitioner and the learned counsel forthe respondent. Rule 25 of the Rules empowers the Tribunal to proceed to hear theappeal even if the respondent before it fails to appear. Therefore, it cannot besaid that the Tribunal has committed any illegality. However, the proviso toRule 25 enables a respondent in an appeal who remained absent and sufferedan order, to file an application seeking to set aside the order so passed. Incase, the Tribunal is satisfied about the reasons mentioned therein, it can setaside the order passed in the absence of the respondent and hear the appealafresh. The Tribunal has extracted the letter addressed by the petitioner andmentioned the steps taken thereon. Though it is stated that the date of hearingwas adjourned from 04-07-2001 to 29-08-2001, it is not clear as to whether the petitioner was put onnotice about the date of hearing. Had it been a case where the adjournment wassought by the counsel being present before the Tribunal and the date was givento him, the necessity to issue fresh notice may not arise. In the instant case,the request for adjournment was made through a letter. Whatever be thejustification, the petitioner was awaiting the intimation of the next date ofhearing. In the process, the appeals have been heard ex parte and wereallowed to the detriment of the petitioner. We are of the view that a case is made out for invoking the discretion ofthe Tribunal under proviso to Rule 25 of the Rules. Valuable right was accrued to the petitioner on account of the order passed by the Commissioner. Beforesuch valuable right is taken away, the petitioner deserves to be given anopportunity of placing their version before the Tribunal. We are of the view that a case is made out for invoking the discretion ofthe Tribunal under proviso to Rule 25 of the Rules. Valuable right was accrued to the petitioner on account of the order passed by the Commissioner. Beforesuch valuable right is taken away, the petitioner deserves to be given anopportunity of placing their version before the Tribunal. Hence, the writ petitions are allowed and the order dated 17-04-2002 isset aside. Consequently, the miscellaneous petitions are allowed and thecommon order dated 30-08-2001 passed by the Tribunal is set aside. TheTribunal shall hear the appeals afresh and dispose of the same in accordancewith law. It is made clear the petitioner shall ensure that it is represented beforethe Tribunal on the date fixed for hearing and if it fails to do so, the Tribunalshall not only proceed to hear the matter, but shall be entitled to reject theapplications, if any, filed under Rule 25 of the Rules once again. The miscellaneous petitions pending in this writ petition shall also standdisposed of. There shall be no order as to costs. ___________________________ L. NARASIMHA REDDY, J 12-11-2014ksNote:LR copy to be marked.B/Oks ____________________________ CHALLA KODANDA RAM, J