TMI Blog2020 (1) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 (4) TMI 625 - MADRAS HIGH COURT] has held that the ITAT cannot dismiss an appeal on account of non-appearance of party without giving finding on merits and remanded the matter to the ITAT. No attempt was made by the ITAT to ascertain the date of actual receipt of the order passed by the ITAT and the ITAT has proceeded to hold the application to be barred by limitation as provided under Section 254(2) of the Act. Section 254 (2) of the Act was amended by the Finance Act, 2016 with effect from 01.06.2016 and the words four years from the date of the order were substituted by six months from the end of the month in which the order was passed . The explanatory notes to the provisions of the Finance Act, 2016, do not throw much light for the purpose of the amendment, except for stating that the period of limitation has been shortened in order to bring certainty to the orders of the ITAT Relevant date for the purpose of commencement of period of limitation - The Supreme Court, in the case of D. Saibaba v. Bar Council of India [ 2003 (5) TMI 508 - SUPREME COURT] had an occasion to consider a similar question in the context of Advocates Act, 1961 for exercising the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C) 402/2020 - - - Dated:- 13-1-2020 - MR. VIPIN SANGHI AND MR. SANJEEV NARULA JJ. Petitioner Through: Mr. Ved Jain, Ms. Mekhala Benny, Mr. Kislaya Parashar and Ms.Umang Luthra, Advocates. Respondent Through: Mr. Kunal Sharma, Senior Standing Counsel with Mr. Parth Semwal, Advocate. SANJEEV NARULA, J (ORAL): C.M.No. 1104/2020 1. Exemption allowed, subject to all just exceptions. 2. The application stands disposed of. W.P.(C) 402/2020 3. The Petitioner company, being left with no statutory remedy, has preferred the present petition under Article 226 of the Constitution of India assailing the order dated 30.08.2019 passed by the Income Tax Appellate Tribunal (hereinafter referred as ITAT ), dismissing petitioner s application for recall of an ex-parte order dated 18.10.2016. 4. Shorn of unnecessary details, the facts of the case are that the Petitioner company filed its return of income for the Assessment Year 2006-07 on 30.11.2006, declaring a total loss of ₹ 42,67,698/-. The said return of petitioner company was picked up for scrutiny and an assessment order dated 28.11. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t petition. 6. We have heard learned counsel for the parties and perused the record. The ITAT has dismissed the application for recall of its order dated 18.10.2016 solely on the ground of limitation, observing that it has no power to condone the delay. The impugned order, inter alia, reads as under: 1. By way of this Misc. Application under Section 254(2) of the Income Tax Act, 1961, assessee requested for recalling the exparte order dated 18.10.2016. 2. At the time of hearing, Ld. Counsel for the assessee stated that the appeal filed by the assessee has been dismissed in default for non-prosecution following the decision in the case of Multiplan Pvt. Ltd. 38 ITD 320 (Del.). He further stated that assessee did not receive the notice of hearing. He further stated that the nonappearance of the assessee is bonafide and requested for recalling the order dated 18.10.2016. In support of his contention, he filed the copy of the decision of the Hon'ble Delhi High Court in the case of Prakash Sangwan Vs. ITO, Ward 33(4), New Delhi 2018 (5) TMI 1789 - Delhi High Court. 3. Ld. DR strongly raised the objection on the request of the Ld. Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent : Provided that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restoring the appeal. Having heard learned Counsel for the parties, we are of the considered opinion that the tribunal lost sight of the main provision as enshrined in Rule 24 of the ITAT Rules, which required the ITAT to dispose of the appeal on merits after hearing the respondent. Since it did not proceed to do so, and specifically gave an option to seek recall of its order, we find no justification for dismissing the application for recall on the ground of limitation. Rule 24 of the ITAT Rules, as noted above, enjoined the ITAT to decide the appeal on merits. The appeal filed in 2014, had ripened for final disposal only in 2016 and therefore, dismissal of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), could only empower the Tribunal to dispose of the appeal on its merits, whether there be an appearance of the party before it or not. This was indeed the rule when it was first promulgated in the year 1941. The rule in its present form, as amended in the year 1948, in so far as it enables the dismissal of an appeal before the Income tax Appellate Tribunal for default of appearance of the appellant, will, therefore, be ultra vires, as being in conflict with the provisions of Section 33(4) of the Act. xxxx xxxxx xxxxx So far as the questions of fact are concerned the decision of the Tribunal is final and reference can be sought to the High Court only on questions of law. The High Court exercises purely advisory jurisdiction and has no appellate or revisional powers. The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself has passed proper order under section 33(4). It follows from all this that the Appellate Tribunal is bound to give a proper decision on questions of fact as well as law which can only be done if the appeal is disposed of on the merits and not dismissed owing to the absen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng issued were being returned back unserved with the comments that the house was locked. It has proceeded to reject the application by considering the date of the order passed by the ITAT as the starting point of limitation in submitting the miscellaneous application and not the date of the receipt of the order, which according to the assessee was 08.02 2018, the date wherefrom it gained knowledge of the order. Thus, no attempt was made by the ITAT to ascertain the date of actual receipt of the order passed by the ITAT and the ITAT has proceeded to hold the application to be barred by limitation as provided under Section 254(2) of the Act. Section 254 (2) of the Act was amended by the Finance Act, 2016 with effect from 01.06.2016 and the words four years from the date of the order were substituted by six months from the end of the month in which the order was passed . The explanatory notes to the provisions of the Finance Act, 2016, do not throw much light for the purpose of the amendment, except for stating that the period of limitation has been shortened in order to bring certainty to the orders of the ITAT. The relevant extract of the explanatory notes reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is divided in two parts. In the first part, the ITAT may, at any time, within four years [as stipulated in the erstwhile provision], from the date of order rectify any mistake apparent from the record and amend an order passed by it under sub-section (1). Under the second part of Section 254 (2) of the Act, provision has been made for the amendment of the order passed by the Tribunal under sub-section (1), when the mistake is brought to its notice by the assessee or the assessing officer through an application. The first part of Section 254 (2) of the Act refers to suo moto exercise of the power of rectification by the ITAT whereas the second part refers to rectification and amendment on an application being made by the assessing officer or the assessee pointing out the mistake apparent from the record. 12. As noted above, Section 254(2) of the Act has undergone certain amendments. However, there is no dispute that the provision still retains the distinctive two parts as observed by the Supreme Court in the above-noted case. We are presently concerned with a scenario under Section 254 (2) of the Act where the assessee has invoked its jurisdiction seeking rectification / am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat order . The Court noticed several other decisions, rendered under different acts and came to the conclusion that the expression the date of that order must be construed as meaning the date of the communication or knowledge, actual or constructive of the order sought to be reviewed. The relevant portion of the said judgment has been extracted hereinunder: 9. So far as the commencement of the period of limitation for filing the review petition is concerned we are clearly of the opinion that the expression the date of that order as occurring in Section 48-AA has to be construed as meaning the date of communication or knowledge of the order to the review petitioner. Where the law provides a remedy to a person, the provision has to be so construed in case of ambiguity as to make the availing of the remedy practical and the exercise of power conferred on the authority meaningful and effective. A construction which would render the provision nugatory ought to be avoided. True, the process of interpretation cannot be utilized for implanting a heart into a dead provision; however, the power to construe a provision of law can always be so exercised as to give throb to a si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otor Vehicles Taxation Act, 1935 came up for the consideration of this Court. It provides for an appeal being preferred within thirty days from the date of such order . The taxation officer passed an order on 20-10-1964/24-10-1964 which was received by the person aggrieved on 29-10-1964. The appeal filed by him was within thirty days - the prescribed period of limitation, calculated from 29-10-1964, but beyond thirty days of 24-10-1964. It was held that the effective date for calculating the period of limitation was 29-10-1964 and not 2410-1964. 13. In Raj Kumar Dey v. Tarapada Dey [(1987) 4 SCC 398] this Court pressed into service two legal maxims guiding and assisting the court while resolving an issue as to calculation of the period of limitation prescribed, namely, (i) the law does not compel a man to do that which he could not possibly perform, and (ii) an act of the court shall prejudice no man. These principles support the view taken by us hereinabove. Any view to the contrary would lead to an absurdity and anomaly. An order may be passed without the knowledge of anyone except its author, maybe kept in the file and consigned to the recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient cause for non-appearance of the petitioner company at the time of disposal of the appeal, as provided in the proviso to Rule 24 of the ITAT Rules has also lost its meaning because of the approach adopted by the ITAT, especially, when there is no limitation provided in Rule 24 of the ITAT Rules. The ITAT has chosen to rely upon its own decision in Commissioner of Income-Tax vs. Multi Plan India (P) Ltd. 38 ITD 320 (Del) and Estate of Late Tukojirao Holkar vs. CWT: 223 ITR 480 (M.P), which is completely misplaced. The ITAT has misread the provision of law and has erroneously dismissed the application for recall. It was necessary for the ITAT to exercise its jurisdiction and afford an opportunity of rehearing the appeal that had been dismissed in the absence of the appeal. Even otherwise, we are of the view that it was the duty and obligation of the ITAT to dispose of the appeal on merits after giving both the parties an opportunity of being heard. The ITAT should have been conscious of the fact that the appellant was not afforded the opportunity to argue the case on merits and for this reason it had given the liberty to apply afresh, while dismissing the appeal for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
