TMI Blog2016 (9) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal ought to have considered the time taken for service of the impugned order and allowed the application for rectification, we are not inclined to accept the said contention, for the reason that, there are no averments in the miscellaneous petition, as to when the order was served on the appellant. - Decided against assessee. - Tax Case Appeal No. 630 of 2016 - - - Dated:- 2-9-2016 - S. Manikumar And D.Krishnakumar, JJ. For the Appellant : Mr. J. Balachander For the Respondents : Mr.M.Swaminathan JUDGMENT ( Made by S. Manikumar, J ) Tax Case Appeal is directed against the order made in MA No.96/Mds/2015 in ITA No.638/Mds/2011 dated 11.12.2015, by which, the Tribunal, dismissed the petition filed to recall the order made in ITA No.638/Mds/2011 dated 18.07.2011, as time barred. 2. Facts leading to the appeal are that being aggrieved by the order of the Commissioner of Income Tax (Appeals) dated 04.01.2011 made in ITA No.185/09-10, Assistant Commissioner of Income Tax, Media Circle I, Chennai, the assessee has filed an appeal before the Income Tax Appellate Tribunal, 'C' Bench, Chennai. When the matter was called, there was no appearance on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner/respondent/ assessee. But unfortunately the said security of the petiitoner failed to hand over the said Tribunal order either to the petitioner/respondent/assessee or to his personal secretary. The petitioner was never aware about the service of the notice and the final order. The petitioner's personal secretary was also not well and was hospitalised for cardiac problem. It is submitted that the non representation is neither wilful nor wanton, but due to reasons set forth above. The petitioner/respondent respectfully submits that there is no wilful or wanton non appearance before the Hon'ble ITAT. The petitioner submits that there exists sufficient cause for recalling the order in terms of ITAT Rules. The courts have held similar views on civil law also. 6. Adverting to the same, the Tribunal vide order in MA No.96/Mds/2015 in ITA No.638/Mds/2011 dated 11.12.2015, for the Assessment Year 2007-2008, passed orders, dismissing the petition, as hereunder: 3. The ld. AR submitted that the order of the Tribunal was passed on 18.7.2011 and date of receipt of the order is to be considered. If we consider the date of order, the assessee has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in not excluding the time taken for the actual service of the order passed in the appeal in ITA No.638/mds/2011 dated 18.7.2011, and computed the period of limitation of four years from the date of passing of the ex-parte order i.e. 18.7.2011. For the above said reasons, he prayed to set aside the order of the Tribunal. 10. Contention that such petition for recalling an exparte order, is filed under section 254(2) read with Rule 25 of the Income Tax Appellate Tribunal Rules, 1963 to set aside the exparte order, and consequently for restoration of the appeal, is not disputed by Mr.M.Swaminathan, learned standing counsel for the respondent. But placing reliance on the decision of this court in Vyline Glass Works Ltd vs. Assistant Commissioner of Wealth Tax reported in (2015) 373 ITR 355 Mad, learned standing counsel for Income Tax department submitted that, even if the Tribunal wants to recall the order, is invoking Section 254(2) of the Income Tax Act, 1961 and reasons have to be recorded, it cannot blindly recall the order, on the application for rectification. 11. He further submitted that this court further held that power to rectify can be exercised, only in a case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which such appeal is filed under sub-section (1) or sub-section (2)of section 253: Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order: Provided further that where such appeal is not so disposed of within the said period of stay as specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period or periods as it thinks fit; so, however, that the aggregate of the period originally allowed and the period or periods so extended or allowed shall not, in any case, exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Tribunal shall make an order setting aside the ex parte order and restore the appeal. 16. Reading of both, Rules 24 and 25 of the Income Tax Appellate Tribunal Rules, 1963, does not indicate any outer time limit prescribed for filing an application either by the appellant or respondent, as the case may be, to set aside the exparte order and to restore the appeal on file. Rules have been framed enabling the appellant/respondent, before the Tribunal, who has suffered an exparte order, to seek for setting aside the same and for restoration of the appeal. However, it could be noticed that under the guise of recalling an exparte order, petitions are being filed, indirectly challenging the correctness of the order, under Section 254 of the Act, and to rectify the original order. 17. As per Section 253 of the Act, appeal has to be filed within the prescribed time limit of 60 days, and such appeal has to be heard and disposed of within four years from the end of the financial year in which such appeal is filed under sub section (1) or sub section (2) of Section 253 of the Income Tax Act. That being the case, miscellaneous application filed beyond the period of four years, is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions including the decision of the Supreme Court in the case of Honda Siel Power Products Ltd. (Supra), held as follows: We have carefully perused the decisions rendered by the High Courts of Madras, Bombay, Karnataka and Rajasthan which have been commended to us by Mr. Mehta and we notice that the decision was distinguished on the factual score and none of the decisions have proceeded to say that it is not a precedent for the proposition that the Tribunal under no circumstances can recall its own order. 33. In view of our aforesaid analysis, we proceed to state our conclusions in seriatim as follows : (A) The decision rendered in Honda Siel Power Products Ltd. [2007] 295 ITR 466 by the apex court is an authority for the proposition that the Income-tax AppellateTribunal under certain circumstances can recall its own order and there is no absolute prohibition. (B) In view of the law laid down in Honda Siel Power Products Ltd. [2007] 295 ITR 466 by the apex court, the decisions rendered by this court in K. L. Bhatia [1990] 182 ITR 361 (Delhi), Deeksha Suri [1998] 232 ITR 395 (Delhi), Karan and Co. [2002] 253 ITR 131 (Delhi), J. N. Sahni [2002] 257 ITR 16 (Delhi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be excluded from computing the period of limitation although such copy may not necessarily be required to be filed along with appeal, application or memo of representation or review. No distinction is drawn between decrees or orders pronounced on the original side or the appellate or revisional side. No application is required to be made seeking the benefit of Section 12 of Limitation Act; it is the statutory obligation of the Court to extend the benefit where available. Although the language of sub-Section (2) of Section 12 is couched in a form mandating the time requisite for obtaining the copy being excluded from computing the period of limitation, the easier way of expressing the rule and applying it in practice is to find out the period of limitation prescribed and then add to it the time requisite for obtaining the copy - the date of application for copy, and the date of delivery, thereof both included - and treat the result of addition as the period of limitation. The underlying principle is that such copy may or may not be required to accompany the petition in the jurisdiction sought to be invoked yet to make up one's mind for pursuing the next remedy, for obtaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce cannot be measured by any absolute standard but it depends on relative facts of a particular case. Due diligence is a measure of prudence by the litigant, who is expected to be reasonable and prudent, under the particular circumstances. In the case on hand, laches on the part of the appellant is apparent. 23. The delay and laches on the part of the petitioners is per se apparent. In this context, this Court deems it fit to extract few decisions dealing with delay and laches, which are as follows: (i) In P.S.Sadasivaswamy v. State of Tamil Nadu reported in AIR 1974 SC 2271, the Apex Court held as follows;- ....... A person aggrieved by an order of promoting a junior over his head should approach the Court at least within six months or at the most a year of such promotion. It is not that there is any period of limitation for the Courts to exercise their powers under Article 226 nor is it that there can never be a case where the Courts cannot interfere in a matter after the passage of a certain length of time. But it would be a sound and wise exercise of discretion for the Courts to refuse to exercise their extraordinary powers under Article 226 in the case of persons w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and again that where there is inordinate and unexplained delay and third party rights are created in the intervening period, the High Court would decline to interfere, even if the State action complained of is unconstitutional or illegal. Of course, this rule of laches or delay is not a rigid rule which can be cast in a strait jacket formula, for there may be cases where despite delay and creation of third party rights the High Court may still in the exercise of its discretion interfere and grant relief to the petitioner. But, such cases where the demand of justice is so compelling that the High Court would be inclined to interfere in spite of delay or creation of third party rights would by their very nature be few and far between. Ultimately it would be a matter within the discretion of the court; ex hypothesi every discretion must be exercised fairly and justly so as to promote justice and not to defeat it. (iv) In State of Maharastra v. Digambar reported in AIR 1995 SC 1991, the Supreme Court, considered a case, where compensation for the acquired land was claimed belatedly and at Paragraphs 12, 18 and 21, held as follows: 12. How a person who alleges against the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry relief. Therefore, where a High Court grants relief to a citizen or any other person under Article 226 of the Constitution against any person including the State without considering his blame-worthy conduct, such as laches or undue delay, acquiescence or waiver, the relief so granted becomes unsustainable even if the relief was granted in respect of alleged deprivation of his legal right by the State. 18. Laches or undue delay, the blame-worthy conduct of a person in approaching a Court of Equity in England for obtaining discretionary relief which disentitled for grant of such relief was explained succinctly by Sir Barnes Peacock, long ago, in Lindsay Petroleum Co. v. Prosper Armstrong (1874) 5 PC 221) thus : Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation, in which it would not be reasonable to place him if the remedy were afterwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench judgment of this Court in Tamilnadu Mercantile Bank Ltd., Vs. Appellate Authority, reported in (1990) 1 LLN 457 and decision of the Supreme Court in Esha Bhattacharjee v. Raghunathpur Nafar Academy, reported in (2013) 12 SCC 649 at paragraph Nos.23 and 24, held as follows: 23. We may also usefully refer to the recent decision of this Court in Esha Bhattacharjee [Esha Bhattacharjee v. Raghunathpur Nafar Academy, reported in (2013) 12 SCC 649], where several principles were culled out to be kept in Principles (iv), (v), (viii), (ix) and (x) of para 21 can be usefully referred to, which read as under: (SCCpp.658-59) 21.4(iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. 21.5. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. 21.8. (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls ..... X X X X Extracts X X X X X X X X Extracts X X X X
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