Order by ITAT couldn't be recalled if neither any mistake nor any reasonable cause for non-appearance was shown

Where Tribunal passed an ex parte order deciding issues on merits and assessee had not been able to show any mistake in that order nor any reasonable cause for its non-appearance, order passed by Tribunal could not be recalled

 

 

[2013] 36 taxmann.com 93 (Chennai - Trib.)

IN THE ITAT CHENNAI BENCH 'C'

R.R. Construction

v.

Assistant Commissioner of Income-tax, Business Circle -IV*

ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
AND Vikas Awasthy, JUDICIAL MEMBER

IT APPEAL NO. 1331 (MDS.) OF 2012
M.P. No. 85 (Mds.) of 2013
[ASSESSMENT YEAR 2008-09]

JUNE 7, 2013

Section 254 of the Income-tax Act, 1961 and rule 25 of the Income-tax (Appellate Tribunal) Rules, 1963 - Appellate Tribunal - Powers of [Power to recall an ex parte order] - Assessment year 2008-09 - Whether where Tribunal passed an ex parte order deciding issues on merits that assessee being a partnership firm was not eligible for claiming deduction under section 80-IA(4) and assessee had not been able to show any mistake in that order nor any reasonable cause for its non-appearance, rule 25 of Income-tax (Appellate Tribunal) Rules, 1963 could not be invoked to recall order - Held, yes [Paras 6 & 7] [In favour of revenue]

FACTS

■		In an ex parte order, the Tribunal held that the assessee being a partnership-firm could not avail of the deduction under section 80-IA(4).
■		The assessee filed the instant miscellaneous petition and sought recalling of the above order. The reason for non-appearance was that the counsel felt from the stairs and underwent physiotherapy. HELD ■ Rule 25 of the Income-tax (Appellate Tribunal) Rules, 1963 (1963 Rules) cannot be interpreted to mean that in every case where decision has been reached by the Tribunal on merits and no glaring or apparent mistake whatsoever is shown therein, it is still to be recalled. ■ Tribunal had taken a view that assessee was not eligible for a deduction under section 80-IA after taking into account all the aspects relating to the case. The question raised was whether assessee was eligible for claiming deduction under section 80-IA(4). The assessee admittedly was only a partnership firm and not a limited company. As per the revenue, assessee was only executing civil work for different organizations on contract basis. Considering these aspects, the Tribunal came to a conclusion that assessee being not a company registered in India, it could not avail of the deduction under section 80-IA(4). ■ The Tribunal also came to a factual finding that nothing was on record to show that the agreement entered by the assessee with Central Government, State Government, Local Authority or any statutory body were for developing any infrastructural facilities. ■ The argument of the assessee that partnership firm was a body established or constituted under a Centre or State Act cannot be accepted for the simple reason that had it been so, the Legislature would not have made specific limitation by virtue of the above clause, whereby only companies and corporate bodies of similar nature have been made eligible for claiming such deduction. [Para 5] ■ No doubt proviso to rule 25 of 1963 Rules says that the Tribunal shall set aside an ex parte order if sufficient cause is shown for non-appearance. This does not give an unfettered right to an assessee to claim a recall of the order, even where no mistake is shown in an order passed by the Tribunal on merits, and it is not possible for the assessee to show that any prejudice has been caused to it, especially so, when non-appearance on the date of hearing was due to assessee's own failure. ■ In the instant case, the reason cited for non-appearance is that the counsel fell from the stairs and underwent physiotherapy. But, it is also mentioned that counsel had indeed arrived albeit late. No affidavit from the concerned counsel was filed in support. Thus there was no sufficient cause for invoking proviso to rule 25 of 1963 Rules. ■ Rules made under sub-section (5) of section 255 are to be interpreted in a way which ensures speedy and effective justice and not for prolonging issues. ■ Rule making powers given under sub-section (5) of section 255 is only for regulating the procedures of the Tribunal, but such powers are nevertheless, subject to the provisions of the Act. Such rules cannot vest on an assessee any rights over and above what is given in the statute under which the rules are formulated. ■ Rules cannot be considered as a handmaid, for helping reticent and negligent assessees and their counsels, who chose to sleep despite receipt of hearing notices. No rule, can give an assessee any right, which has its origin in their own laxity. [Para 6] ■ The assessee has not been able to show any mistake in the order of the Tribunal nor any reasonable cause for its non-appearance. It is only seeking a review of the Tribunal's order, which was passed on merits. Reliance on rule 25 of 1963 Rules cannot be used as a ploy to circumvent the process of rendering justice, when a reasoned decision has been reached by the Tribunal. [Para 7] ■ In the result, the miscellaneous petition filed by the assessee is to be dismissed. [Para 8] Get Sudycafe's Updates by SMS in your mobile by Following below two Steps:  1. Download our SmartPhone Application &  2. Send a SMS, Type: JOIN CASTUDYCAFE & send to 9219592195