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2020 (12) TMI 781 - HC - Income TaxRectification u/s 254 - Tribunal decided the appeal of the Revenue on merits and ex-parte, as there was no presence on behalf of the Petitioner - Petitioner filed the Miscellaneous Application u/s 254(2) read with Rule 25 of the ITAT Rules, wherein explanations were provided for such non-appearance - affidavit of the Director of the Petitioner-company stating that the non-appearance was on account of the illness of the counsel - HELD THAT:-The presumption of disinterest against the Petitioner is speculative. The other factor that prevailed upon the Tribunal was the lapse of time since the first date of hearing. Tribunal ignored the fact that Petitioner had approached the Tribunal in December 2018, and thus, the time gap of 2 years between the first date of hearing and the date of decision cannot be a compelling measure. In our view, these factors ought not to be viewed in isolation, without taking into consideration the sufficiency of reasons for non-appearance. Petitioner had given a sufficient and cogent explanation for non-appearance of its Representative, which, however, the Tribunal has failed to take into account. Besides, in para 6 of the Impugned Order, the Tribunal also went into the question of merits of the ex-parte decision, by delving into the correctness of order. This also was an erroneous yardstick for deciding the Miscellaneous Application. Tribunal has failed to appreciate that the Petitioner was seeking the recall of the order dated 24th July, 2018 and restoration of the appeal, and not the rectification of any mistake apparent on record. The merits of the case could not have been gone into at the stage of deciding an application under Rule 25 of the ITAT Rules. Rules 24 and 25 of the ITAT Rules enable the Tribunal to restore the appeal, if a party appears afterwards and satisfies the Tribunal that there was a sufficient cause for its non-appearance when the appeal was taken-up for hearing. The proviso to Rule 25 deals with the situation where the Tribunal has passed an ex-parte order, due to non-appearance of the Respondent, even though the order was passed on merits. Thus, we are of the opinion that the reasoning given in para 6 of the Impugned Order is beyond the scope and ambit of Rules 25 of the ITAT Rules. Assessee was prevented by sufficient cause from appearing before the ITAT when the appeal was taken up for hearing. Further, the Tribunal has taken into consideration such reasons which were not germane for deciding the Miscellaneous Application. The sufficiency of the cause, which was the only factor to be examined, has been ignored by the Tribunal. If sufficient cause is shown, the Tribunal is obligated to consider the same and make an order setting aside the ex-parte order, irrespective of the fact that the final order decided the appeal on merits. We are also persuaded to allow the petition, in view of the undertaking given by the Petitioner that it would apply under the ‘Vivad Se Vishwas’ Scheme in the event the appeal is restored to its original number. The Petitioner’s undertaking is taken on record and it shall be held bound by the same.
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