M/S.COOL MIND TECHNOLOGIES PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX

Against the rejection by the First Appellate Authority, the appellant preferred an appeal before the Income Tax Appellate Tribunal. The said appeal however came to be dismissed for non prosecution. It is the case of the appellant that he received neither the notice of hearing before the Appellate Tribunal nor the dismissal order of the Appellate Tribunal. When he eventually got a copy of the said dismissal order of the Appellate Tribunal, he preferred an application for restoration of the appeal, but the said application was also dismissed as belated.

It is impugning the said dismissal orders of the Appellate Tribunal, dismissing the appeal and the miscellaneous application, that the appellant approached the writ court through the writ petition aforementioned.

The learned Single Judge who considered the matter, although noticed the provisions of Section 254 of the Income Tax Act, read with Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and found that the Appellate Tribunal was statutorily obliged to consider the appeal on merits, and did not have the power to dismiss the appeals filed before it for non prosecution, nevertheless proceeded to dismiss the writ petition on the ground that the miscellaneous application preferred by the appellant for restoration of the appeal, was itself belated.

We have heard Sri.Joseph Markos, the learned Senior Counsel assisted by Sri.Abraham Joseph Markos for the appellant and Sri.Jose Joseph, the learned Standing Counsel for the Income Tax Department.

On a consideration of the rival submissions, we find that another Division Bench of this Court, in the decision reported in Uzhuva Service Co-operative Bank Ltd. v. Income Tax Officer and others [2020 (5) KHC 615] has, in an almost identical situation, found that the Income Tax Appellate Tribunal acting under Section 254 of the IT Act, 1961, cannot dismiss an appeal preferred by an assessee for non-prosecution. The court found that in terms of the provisions of Section 254 of the IT Act, the Appellate Tribunal was statutorily obliged to consider all appeals on merits and the dismissal for non-prosecution, without considering the merits of the appeal, was not legally sustainable. We further notice that in the said case also, the assessee had filed an application for the restoration of the appeal beyond the statutory period prescribed under the Income Tax (Appellate Tribunal) Rules. The situation, therefore, was not different from what arises in the instant case.

Thus, taking note of the said precedent of this Court and finding it to be in confirmity with the statutory provisions under the IT Act and Rules, we allow this writ appeal by setting aside the impugned judgment of the learned Single Judge, as also Ext.P4 and P6 orders of the Income Tax Appellate Tribunal that were impugned in the writ petition, and direct the Appellate Tribunal to restore the appeal (ITA 375/Coch/2016) on its file and pass orders on merits after hearing the appellant, within an outer time limit of six months from the date of receipt of a copy of this judgment.