Calcutta High Court
Khaitan Paper And Industries Ltd. vs Commissioner Of Income-Tax on 6 April, 2004
Equivalent citations: (2005)195CTR(CAL)447, [2005]273ITR234(CAL)
Author: Soumitra Pal
Bench: Soumitra Pal
JUDGMENT M.H.S. Ansari, J.
1. This is an appeal under Section 260A of the Income-tax Act, 1961, against the order of the Income-tax Appellate Tribunal (ITAT), whereby the miscellaneous applications filed by the assessee for recalling the ex parte order dated November 29, 1999, in I. T. A. Nos. 1870 and 1871 (Cal) of 1993 for the assessment years 1985-86 and 1986-87 was rejected.
2. The appeal was admitted by an order dated January 8, 2001, on the following two questions :
"1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal unlawfully and unjustly dismissed the appeals relating to the assessment years 1985-86 and 1986-87 ex parte thereby denying the assessee the opportunity of being heard and further compounded the injustice by declining to recall such ex parte order of dismissal despite the proof of the fact of the advocate's sickness incapacitating him to attend the hearing, the appellant-assessee not being at fault; and
2. Whether it is not appropriate and not consonant to law and justice to decline to recall the order having been passed without consideration of the reasoning of the Commissioner of Income-tax (Appeals) for deleting the additions as the dismissal of the appeals amounts to dismissal for default without consideration of the case on merits?"
3. Learned counsel for the appellant did not press the second question before us and instead prayed that the order under appeal rejecting the miscellaneous applications be set aside and the appeal before the Tribunal be considered on the merits.
4. None has appeared on behalf of the respondent-Revenue to oppose the instant appeal.
5. Having heard learned counsel for the appellant and after having perused the relevant records and more particularly the order of the learned Tribunal under appeal we are of the view that question No. 1 is not really one of law arising out of the order under appeal. The appeals for the relevant two assessment years were disposed of by the Tribunal on the merits though ex parte. It is not a case where the assessee was denied an opportunity of hearing. The Instant case is one where, as can be seen from the order under appeal, the appeal had been adjourned to November 25, 1999, on the request of the assessee's counsel and when the case was called on November 25, 1999, nobody appeared on behalf of the assessee nor any adjournment application was filed. It is therefore a case where the assessee failed to avail of the opportunity of hearing.
6. It was thereupon contended by Mr. S. Bagchi, learned counsel for the appellant, that the learned Income-tax Appellate Tribunal in its order under appeal have not considered the relevant facts on record but rejected the applications on one aspect of the matter, namely, that the assessee had filed the applications for restoration of the appeals on wrong, false and contradictory statements made in the application. It was urged that the affidavits of counsel along with prescription of the attending physician of the relevant dates which were enclosed with the application has been completely overlooked.
7. Reliance was placed upon the judgments in Joseph Michael and Brothers v. IT AT and ITO v. Murlidhar Sarda, . The two judgments relied upon by Mr. Bagchi arise out of applications filed under article 226 of the Constitution. There can be no dispute that the Tribunal has the power to recall its previous order where the petitioner has made out a case that he was prevented from being present at the hearing of the appeal. The Kerala High Court in the judgment cited (see [1993] 199 ITR 466), held that a prayer for setting aside of an ex parte order and thereby affording an opportunity of being heard to the aggrieved party is not the same as the power of review. In the Calcutta judgment (see [1975] 99 ITR 485), it was held that when adequate and reasonable grounds for omission to appear at the hearing are made out to the satisfaction of the Tribunal, it is only a question before the Tribunal as to the adequacy of that opportunity of being heard which Sub-section (1) of Section 254 of the Income-tax Act, enjoins to be given before the Tribunal to enable it to pass orders in the appeal. In other words, it was held that though not by any express provision, yet ancillary to the jurisdiction given by Section 254 of the Income-tax Act, the Income-tax Appellate Tribunal has power to restore and rehear an appeal disposed of on the merits in the absence of any party who has been prevented by reasonable and sufficient cause from appearing before the Tribunal at the date of hearing.
8. In the case on hand, the learned Income-tax Appellate Tribunal by its order under appeal dated May 3, 2000, has disposed of the miscellaneous applications on the merits. There is some justification for the learned Tribunal to make the statements that it did in paragraph 4 of the order under appeal. The Tribunal was further justified, in our view, in observing that the assessee cannot be allowed to take advantage of the wrong statements. The fact, however, remains that the Tribunal has not considered the other evidence placed before it, namely, the affidavit of learned counsel which is said to have been enclosed with the application for restoration and xerox copy whereof is at page 33 of the paper book. The question, therefore, that arises is as to whether there was sufficient cause made out for non-appearance of learned counsel on the adjourned date of hearing on November 25, 1999, to warrant the restoration of the appeal and for disposal of the same on the merits after hearing learned counsel for the assessee.
9. As this question has not been adverted to or dealt with by the Tribunal in its order under appeal the better course would be to remand the matter to the Tribunal for consideration afresh in accordance with law and after affording the respective parties an opportunity of being heard in the matter of the miscellaneous applications.
10. We accordingly dispose of the appeal by remitting the matter back to the Tribunal to rehear the Miscellaneous Applications Nos. 23 and 24 (Cal) of 2000. As it is an old matter we would request the Tribunal to dispose of the same preferably within a period of 3 (three) months from the date of receipt of a copy of this order.
11. In the result, the appeal accordingly stands disposed of.
Soumitra Pal, J.
12. I agree.