UFX Ventures Pvt. Ltd. v. Assistant Commissioner of Income-tax, Corporate Circle-3(2), Chennai
[Citation -2020-LL-1008-30]

Citation 2020-LL-1008-30
Appellant Name UFX Ventures Pvt. Ltd.
Respondent Name Assistant Commissioner of Income-tax, Corporate Circle-3(2), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 08/10/2020
Assessment Year 2014-15
Judgment View Judgment
Keyword Tags period of limitation • condonation of delay
Bot Summary: The period of limitation for filing the appeal had expired and there was a delay of 317 days in filing the appeal before the Tribunal. 357 358 of 2020 explained the reason for the delay period by mentioning that they had approached the CIT(A) for recalling the order, dismissing the appeals for default and restore the appeals to be heard on merits, but the CIT(A) did not pass any orders on the Restoration Petition and this is the reason, they could not approach the Tribunal within the period of limitation. In the said case, the CIT(A), who initially dismissed the appeals for default, subsequently, had recalled the orders and restored the appeals for a fresh decision. Subsequently, the CIT(A) informed the said assessee that the order, recalling the appeal, was incorrect and contrary to law and dismissed the appeal. The Commissioner, as the record would admittedly indicate, dismissed the appeal filed by the assessee without going into the merits on the ground that despite several notices, the assessee had not appeared in support of the appeal. While restoring the appeal to file and recalling the order of dismissal, the CIT took due note of the submission of the assessee that on most of the dates, either the CIT had been transferred or was not present at the hearing of the appeal. In our view, the Tribunal was justified in holding that the CIT who had dismissed the appeal for want of prosecution had inherent powers ex debito justitiae to recall that order and restore the appeal for hearing on merits.


T.C.A.Nos.357 & 358 of 2020 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 08.10.2020 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.Nos.357 & 358 of 2020 and C.M.P.Nos.11260 of 2020 UFX Ventures Pvt.Ltd., Rep.by its Managing Director, 33/1, Wallajah Road, Chepauk, Chennai 600002 .. Appellant in both T.C.As Versus Assistant Commissioner of Income Tax, Corporate Circle 3(2) Ayakar Bhavan Wanaparthy Block, Room No.414, IV Floor, Nungambakkam High Road, Chennai 600034. .. Respondent in both T.C.As Common Prayer in T.C.A.Nos.357 & 358 of 2020:- Tax Case Appeal filed under Section 260-A of Income Tax Act, 1961, against order of Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai dated 20.02.2020 made in I.T.A.Nos.2217 & 2218/Chny/2019 relating to Assessment Years 2014-15 & 2013-14. 1/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 For Appellant :Mr.B.Deepak Narayanan [in both T.C.As] For Respondent : M/s.V.Pushpa Junior Standing counsel [in both T.C.As] JUDGMENT [Common Judgment was delivered by T.S.Sivagnanam,J.] These appeals have been filed by assessee, challenging common order dated 20.02.2020 passed by Income Tax Appellate Tribunal, ('the Tribunal' for brevity) Madras 'D' Bench, Chennai, in I.T.A.Nos.2217 & 2218/Chny/2019 for Assessment Years 2014-15 and 2013-14 respectively. assessee has raised following Substantial Questions of Law for consideration: 1.Whether Hon'ble ITAT was right in refusing to condone delay of 317 days, without considering restoration application filed by Appellant before CIT(A) was duly acknowledged by CIT(A). 2. Whether Hon'ble ITAT was right in observing that there is no merits in grounds of appeal, where in fact there was neither any submissions made in respect to merits of case nor any observation was made in Order of Hon'ble ITAT pertaining to merits of dispute. 2/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 2. We have elaborately heard Mr.B.Deepak Narayanan, learned counsel for appellant/assessee and M/s.V.Pushpa, learned Junior Standing counsel appearing for respondent/Revenue. 3. assessee is Private Limited company, engaged in business of professional consistency services, publishing newspapers, etc., It filed return of income for Assessment Year under consideration AY-2013-14 on 31.03.2015, admitting loss of Rs.59,99,532/- and for Assessment Year under consideration AY-2014-15 on 30.03.2016, admitting total income as NIL . Assessing Officer issued notice under Section 142(1) of Act and completed assessment by order dated 30.03.2016 for Assessment Year 2013-14 and by order dated 20.12.2016 for Assessment Year 2014-15. Aggrieved by same, assessee preferred appeals before Commissioner of Income Tax (Appeals) ['CIT(A)' for brevity]. appeals were dismissed for default by common order dated 29.06.2018. Soon after assessee came to know about dismissal of appeals for default, they filed application for restoration dated 24.07.2018, stating that they received order passed by CIT(A) on 3/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 18.07.2018, dismissing appeals for default on account of non- appearance of assessee on 13.06.2018 and explained reason for non- appearance by stating that their authorized representative, Chartered Accountant was in his native place in Kerala State in connection with his daughter's marriage fixed on 16.07.2018 and assessee could not make any alternate arrangements. Thus, assessee pleaded that circumstance cited by them was beyond control and prayed before CIT(A) that order dated 29.06.2018, dismissing appeals for default may be revoked and appeals be restored to file for being heard and disposed. To substantiate cause shown by assessee, copy of wedding invitation of marriage of daughter of assessee's Chartered Accountant was enclosed. assessee would submit that said application was presented in office of CIT(A) on 06.08.2018 and acknowledgment has also been given by office of CIT(A). However, application was not taken up for consideration and it appears that assessee was advised to file appeal before Tribunal. By then, period of limitation for filing appeal had expired and there was delay of 317 days in filing appeal before Tribunal. assessee filed affidavit, sought for condonation of delay and filing appeals and 4/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 explained reason for delay period by mentioning that they had approached CIT(A) for recalling order, dismissing appeals for default and restore appeals to be heard on merits, but CIT(A) did not pass any orders on Restoration Petition and this is reason, they could not approach Tribunal within period of limitation. Tribunal, while considering explanation offered by assessee, held that assessee has not filed any material to show that they had filed Restoration Petition before CIT(A) for recalling exparte order. Accordingly, on ground that no proof has been filed by assessee, appeals were dismissed. These orders have been challenged by assessee before us. As could be seen from material papers placed before us, letter dated 24.07.2018 from assessee to CIT(A) seeking for restoration of appeals dismissed for default has been acknowledged by office of CIT(A) dated 06.08.2018. Therefore, we are satisfied that assessee did move CIT(A) for restoring appeals. However, fact remains that CIT(A) did not pass any orders. This could have been for reason that CIT(A) might had doubt in his mind as to whether he would be entitled to recall and review earlier order and restore appeals and hear same afresh. 5/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 4. learned counsel for appellant had placed reliance on decision of High Court of Allahabad in case of Commissioner of Income Tax Meerut Vs. Smt.Madhu, in case of Income Tax Appeal Defective No.93 of 2014 dated 28.10.2014. 5. Substantial Questions of Law framed for consideration in said case was whether Tribunal erred in law in granting CIT(A), power of review when none is provided by legislature and more so, owing to fact that power of review is specific statutory power, which may not be interfered with, if not provided by legislature. In said case, CIT(A), who initially dismissed appeals for default, subsequently, had recalled orders and restored appeals for fresh decision. However, subsequently, CIT(A) informed said assessee that order, recalling appeal, was incorrect and contrary to law and dismissed appeal. This order was challenged before Tribunal. Tribunal held that CIT(A), who was conferred with power to adjudicate upon particular issue had inherent power to recall its orders and if same is done, no prejudice would be caused to Revenue and it was 6/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 pointed out that right of hearing is important right and CIT(A) had only passed its earlier orders on merits, keeping in view of principles of natural justice. Revenue challenged said order before High Court of Allahabad, contending that Section 251 of Act confers specified powers on Commissioner (Appeals) and no power has been granted to review his own order and hence, order in which CIT(A) recalled earlier order, dismissing appeals for want of prosecution was contrary to law. said submission was rejected by Hon'ble Division Bench by assigning following reasons: We find no merit in submission. Commissioner (Appeals), as record would admittedly indicate, dismissed appeal filed by assessee without going into merits on ground that despite several notices, assessee had not appeared in support of appeal. While restoring appeal to file and recalling order of dismissal, CIT (A) took due note of submission of assessee that on most of dates, either CIT (A) had been transferred or was not present at hearing of appeal. CIT (A) restored appeal to file evidently in order to afford fair opportunity of hearing to assessee. However, inexplicably, he proceeded to recall order of restoration. In case of Grindlays Bank Ltd. Vs. Central 7/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 Government Industrial Tribunal & Ors., AIR 1981 SC 606, Supreme Court had occasion to deal with similar issue. Under provisions of Industrial Disputes Act, 1947, Tribunal has no jurisdiction to recall or review award after expiry of 30 days of its publication. application was moved to set aside ex parte award after thirty days. It was held by Tribunal that it had no power to set aside said award. Supreme Court held that Tribunal had ancillary or incidental power for doing justice in such circumstances. Supreme Court observed as follows in paragraph 6 of judgment:- "6. We are of opinion that Tribunal had power to pass impugned order if it thought fit in interest of justice. It is true that there is no express provision in Act or rules framed thereunder giving Tribunal jurisdiction to do so. But it is well-known rule of statutory construction that Tribunal or body should be considered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions effectively for purpose of doing justice between parties. In case of this nature, we are of view that Tribunal should be considered as invested with such incidental or ancillary powers unless there is any 8/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 indication in statute to contrary. We do not find any such statutory prohibition. On other hand, there are indications to contrary." In our view, Tribunal was justified in holding that CIT (A) who had dismissed appeal for want of prosecution had inherent powers ex debito justitiae to recall that order and restore appeal for hearing on merits. This is not equivalent to power of review. CIT (A) has not exercised power of review but has only exercised inherent power in interests of justice of restoring appeal which had been dismissed for want of prosecution. That order of restoration was not contrary to law and CIT (A) was, hence, found by Tribunal to have erred in subsequently recalling his order of restoration. appeal after being restored to file was being heard on merits, as observed by Tribunal, and no prejudice as such has been sustained by Revenue, since both sides would be heard by CIT (Appeals) before any final orders are passed. In this view of matter, appeal will not give rise to any substantial questions of law. It is, accordingly, dismissed. There shall be no order as to costs. 6. Mr.B.Deepak Narayanan, learned counsel appearing for appellant would argue that above decision would come to aid of 9/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 assessee and CIT(A) ought to have passed order on application for restoration. 7. In our considered view, we need not travel that far to decide powers of CIT(A) in these appeals nor Substantial Questions of Law framed for consideration is on that aspect. This is more so, because we are convinced that assessee had filed application before CIT(A) on 24.07.2018 for recalling order, dismissing appeals for default and date seal is sufficient proof of filing such application. Therefore, it appears that this record was not placed before Tribunal when it passed impugned order. That apart, this Court has always been lenient, more particularly, to Revenue when appeals are filed with inordinate delay. reason being this Court is required to take decision on Substantial Questions of Law and it would be inequitable to reject appeal on ground of delay and also bearing in mind legal principle that none benefits by lodging appeal belatedly. exception to this rule would be, where delay is on account of mala fide reasons or for certain other collateral purposes. If such is case, even delay of one day can be rejected. We find explanation offered by assessee to be convincing 10/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 and acceptable and therefore, impugned order passed by Tribunal warrants interference. 8. appeals filed by assessee are allowed and Substantial Questions of Law are answered in favour of assessee. order passed by Tribunal is set aside. Consequently, common order passed by CIT(A) dated 29.06.2018 is set aside and appeals are restored on file of CIT(A) to be heard and decided on merits, after affording opportunity of hearing to appellant/assessee. With regard to issue regarding power of CIT(A) under Section 251 to recall its order, is left open to be adjudicated at appropriate time. No costs. Consequently, connected miscellaneous petition is closed. (T.S.S.,J) (V.B.S.,J) 08.10.2020 Kak Index: Yes / No Internet: Yes / No To Income Tax Appellate Tribunal, 'D' Bench, Chennai. 11/12 http://www.judis.nic.in T.C.A.Nos.357 & 358 of 2020 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. Kak T.C.A.Nos.357 & 358 of 2020 08.10.2020 12/12 http://www.judis.nic.in UFX Ventures Pvt. Ltd. v. Assistant Commissioner of Income-tax, Corporate Circle-3(2), Chennai
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