Anand Kantilal Chokshi HUF vs ITO

These petitions arise out of common background. They have been heard together and are being disposed of by this common order. In response to the notice for final disposal issued by us on 26.11.2012, learned counsel Shri Manav Mehta appeared for the Revenue and opposed the petitions.

For the purpose of this order, we may notice the facts as stated in Special Civil Application No. 14939/2012. Since facts are identical in all the petitions, it would not be necessary to record such facts in other petitions.

The petitioner is an individual assessee. The petitioners tax appeal was pending before the Income Tax Appellate Tribunal (''the Tribunal'' for short). Such appeal was dismissed for non appearance by the Tribunal on 28.3.2011. The petitioner moved a Misc. Application for recalling such an order. The Tribunal allowed such Misc. Application by its order dated 29.7.2011 primarily on the ground that even in absence of the assessee, the appeal should not have been dismissed for non prosecution but should have been decided on merits. Be that as it may, having recalled its previous order of dismissing the appeal for default, the Tribunal ordered the Registry to place the appeal for hearing on 28.9.2011. The Tribunal also recorded that this development was conveyed to both the parties in the open Court.

Before the next date of hearing of the appeal, petitioner moved an application dated 19.9.2011 and stated as under:

To

The Members, Income Tax Appellate Tribunal Bench: ''D'' Ahmedabad

Honourable Sir/s,

Subject:Request to adjourn the hearing fixed on 29/09/2011.

Reference: Appeal No. 4416 to 4420/Ahd/2007 & 471/09.

MAY IT PLEASE YOUR HONOURS

We, the undersigned the appellants have to submit with due respect and honor that it has come to our knowledge that the appeal which commonly include name of Shri Pankaj Danawala(CA) are being consolidated in Bench:''C'' on direction of Hon''ble VP, ITAT, Ahmedabad. In our below mentioned appeals, common issue related to CA, Shri Pankaj Danawala is involved, in which additions were made on the basis of statement of that CA u/s. 133A of the Act, during survey, at his office.

Therefore, our said appeals are requested to be adjourned for the said purpose and oblige.

It is not in dispute that such application of the petitioner was never rejected by the Tribunal. The Tribunal however, finding that on 28.9.2011, none appeared for the petitioner, recorded its reasons for proceeding ex-parte. The Tribunal was of the opinion that the petitioner was not serious in pursuing the appeal. Previously, the petitioner had not remained present and requested restoration of the appeal and assured the Tribunal that on the date fixed for hearing, the petitioner would participate in appeal hearing. The Tribunal further noticing that even in absence of the parties, Tribunal should decide the appeal on merits rather than dismissing for default, proceeded to consider the appeal of the petitioner and dismissed it by order dated 30.9.2011.

The petitioner thereupon moved yet another Misc. Application for recalling the order. The Tribunal by the impugned order rejected I such an application on the ground that previously also the petitioner had not remained present before the Tribunal. The application should not be allowed other-wise it will make mockery of judicial system. In the impugned order dated 23.3.2012, the Tribunal has raised some doubt about the receipt of such application by the Registry of the Tribunal. The Tribunal however, has not held that such application was not received, but noted that it is a matter of inquiry. Counsel for the petitioner referred to Annexure-H to point out that the application was in fact delivered by the postal authority. We have therefore, proceeded on the basis that such application was in fact received by the Registry of the Tribunal.

The petitioner has therefore, moved the present petition challenging the order of the Tribunal dated 30.9.2011 and its subsequent order dated 23.3.2012 rejecting the rectification application.

Having heard learned counsel for the parties and having perused the documents on record, we fully share the sentiments of the Tribunal that litigants, be the assessee or the department, must participate before the Tribunal and cooperate in smooth proceeding of hearing of the appeals. No litigant, be the department or the assessee, can chose not to remain present before the Tribunal and hope that the Tribunal will recall its order again and again that too without sufficient cause being shown. As we have noticed, under the rules even in absence of the assessee, the Tribunal is required to decide the appeal on merits rather than dismissing it for default. This is precisely what the Tribunal did in the second round, previously having dismissed the appeal for default but having recalled its own order upon an application being filed by the petitioner.

Having said so however, due to certain special features of the matters, we are inclined to remand the proceedings before the Tribunal for consideration of appeals on merits. Such features are that once the Tribunal restored the appeals and fixed the hearing on 28.9.2011, before the said date the petitioners moved application dated 19.9.2011 and requested that since the appeals of other assessees involving common issue related to the statement of the Chartered Accountant Shri Pankaj Danawala are adjourned to some other date, their appeals also be adjourned for the said purpose and oblige. It is true that in such an application the petitioners did not specifically request for consolidation of their appeals along with other related appeals, however, in the application itself they had pointed out that such other appeals have already been consolidated and that for such purpose, their appeals may also be adjourned.

Though formally the petitioners did not make a prayer for consolidation of their appeals along with other connected appeals, their intention was plain. They desired that their appeals be heard along with other appeals, whether formal prayer for consolidation was made or not and whether formal order for consolidation of all appeals were passed or not. In essence, the request of the petitioners was to hear their appeals along with connected appeals on the same date to avoid any conflict of judicial opinion.

Such application of the petitioners was never rejected by the Tribunal. The Tribunal however, looking to the past conduct of the petitioners proceeded to hear the appeals ex-parte recording that the petitioners had never prayed for consolidation of their appeals.

As already recorded, the Tribunal was justified in being upset with the approach of the petitioners. We ''also'' do not endorse the petitioners unilateral decision not to appear before the Tribunal particularly on 28.9.2011 having merely made an application for adjournment on 19.9.2011. However, there is one more additional ground why we are persuaded to give one last opportunity to the petitioner. Such ground is, as pointed out by the counsel for the petitioners, that in the connected appeals, the Tribunal had later on taken a view in favour of the assessee and confirmed the decision of the Commissioner (Appeals). We are not concluding the issue whether the evidence, issues and consideration of all relevant factors were or were not common in the present set of appeals as compared to the connected appeals referred to by the petitioners. Such issues have necessarily be gone into by the Tribunal while hearing the petitioners appeals. For the purpose of this order, however, it is sufficient to take note of petitioners contention that in connected appeals, the Tribunal had on similar evidence taken a different view.

Under the circumstances, impugned orders dated 30.9.2011 and 23.3.2012 are set aside. The appeals of the all the petitioners are restored and placed back before the Tribunal for consideration on merits. For such purpose a tentative date be fixed on 25.2.2013. It shall not be necessary for the Tribunal to issue separate notices for fixing the date of hearing to the petitioners and it shall be the duty of the counsel for the petitioners to communicate the same to the petitioners. We clarify that this date is fixed only to avoid any dispute about service of notices and it would be entirely within the discretion of the Tribunal to reschedule the hearing as per its convenience. Counsel for the petitioners stated that the petitioners shall remain present before the Tribunal on 25.2.2013 personally or through their authorised representative and also on all subsequent dates if the appeals are so adjourned. The petitioners shall pay cost of Rs. 5000 per petition to the respondents. Petitions are disposed of accordingly.