In W.P.(C) 1486/2023-DEL HC- Where appeal has been disposed of on merits & appellant appears thereafter, Tribunal can set aside ex-parte order & restore appeal, if there was sufficient cause for his non-appearance: Delhi HC on Rule 24 of ITAT Rules 
Justices Rajiv Shakdher & Tara Vitasta Ganju [06-02-2023]

Read Order:CEMENT CORPORATION OF INDIA LTD Vs. ASSISTANT COMMISSIONER INCOME TAX CIRLE 5(2) ,NEW DELHI 

LE Correspondent

New Delhi, March 6, 2023: The Delhi High Court has remitted a matter back to the Income Tax Appellate Tribunal after noting that Rule 24 of the ITAT Rules does not have the impediment of limitation, as is prescribed under Section 254 of the Income-Tax Act.

Referring to Rule 24 of the ITAT Rules, the Division Bench of Justice Rajiv Shakhdher and Justice Tara Vitastu Ganju asserted, “A perusal of the said Rule seems to plainly convey that if on the date fixed for hearing, or on any other date to which the hearing is adjourned, the appellant does not appear in person or through an authorized representative, when the appeal is called out for hearing, the Tribunal may dispose of the appeal on merits or otherwise, after hearing the respondent.”

This writ petition laid a challenge to the order passed by the Income Tax Appellate Tribunal. Via the said order, the Tribunal had dismissed the Miscellaneous Application whereby a prayer was made for recalling the order passed by the Tribunal.

The Tribunal dismissed the appeal preferred by the petitioner, on the ground of non-prosecution and noted that the petitioner had been served, and thus, no purpose would be served in issuing a fresh notice.

In the very same order, the Tribunal also observed that it would treat the appeal as not being admitted, and in this regard, the Tribunal had taken recourse to Rule 19 of the ITAT Rules. It was the petitioner's assertion the miscellaneous application was filed in 2018 which was dismissed in 2022.

The Tribunal had taken recourse to the provisions of Section 254 of the Act and had alluded to the fact that since rectification of mistake, apparent from the record, can be made within six months from the end of the month in which the concerned order was passed, the petitioner’s application for recall of the ordercould not have been entertained.

In this context, the Tribunal had fixed two points i.e., the date on which the petitioners miscellaneous application was filed i.e., September 24, 2018, and when the six-month period expired, commencing from the end of the month in which the order was passed i.e., July 31, 2018. Having noticed these dates, the Tribunal concluded that under Section 254 of the Act, it had no power to condone the delay qua the application for recall of its order, which was filed beyond six months.

As per the Bench, the application moved by the petitioner was not stricto sensu, moved with a view to rectify a mistake apparent from the record, or even to amend any order. The petitioner simply sought a recall of the order dated January 24, 2018, whereby the appeal was dismissed for non-prosecution. 

“Therefore, in our opinion, the said provision was not the most apposite provision for adjudicating the petitioners application for recall of the order dated 24.01.2018, given the facts obtaining in the case”, the Bench held.

Referring to Rule 24, the Bench noted that the proviso appended to the Rule indicates that where an appeal has been disposed of on merits, and the appellant appears thereafter, the Tribunal shall set aside the ex parte order and restore the appeal, if it is satisfied that there was sufficient cause for his non-appearance.

“Although in the main part of Rule 24, the expression used is may, when read with the proviso appended thereto, it leads to the conclusion that if the Tribunal chooses to dispose of the appeal on merits or otherwise, after hearing the respondent in the absence of the appellant, and the appellant, thereafter, appears and shows sufficient cause for not appearing on the date when the appeal is disposed of, the Tribunal is obliged, in law, to set aside the order passed and restore the appeal”, the Bench added.

Besides this, the Tribunal is vested with incidental and ancillary powers which can be exercised in situations such as the one, the Bench noted.

While there was delay, the Bench noted that the appellant had furnished some reasons for explaining the delay. Broadly, the reasons given were that the notice of hearing issued by the Tribunal for the hearing on January 24, 2018 was misplaced, and did not reach the concerned officer of the petitioner, which according to the petitioner, was the primary cause for non-attendance on the said date. 

Furthermore, as per the petitioner, it was unaware of the passing of the dismissal order dated January 24, 2018, and only came to know about the same only on February 5, 2018. The petitioner also contended that the inadvertent delay in filing the miscellaneous application was caused on account of the concerned persons in the Department being temporarily transferred to a plant outside Delhi, and some persons retiring during the relevant period.

Thus, on such grounds, the Bench remitted the matter to the Tribunal for disposal of the petitioner’s statutory appeal on merits.