M/S LOK VIKAS HOUSING FUNDS LTD vs. ADDLL COMMISSIONER I T JAIPUR

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 634 / 2009 M/S Lok Vikas Housing Funds Limited (Presently Lok Vikar Housing Finance Corporation Limited) Lok Vikas Bhawan, 3F1, Shivanand Marg, Malviya Nagar, Jaipur (Raj) Through Its, Aged About 56 Years, Managing Director Lokesh Kumar Singh S/o Shri Jagdish Singh R/o 81/33, Patel Marg, Mansarovar, Jaipur (Raj) ----Appellant Versus The Additional Commissioner of Income Tax Range-I, Jaipur(raj) ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sandeep Taneja For Respondent(s) : Mr. K.D. Mathur for Mr. R.B. Mathur _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 18/07/2017 1. By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby Tribunal has dismissed the appeal on the ground of delay in filing the application for recalling the order dt. 7.12.2001 dismissing the appeal as unadmitted. 2. This court while admitting the appeal framed following substantial question of law:- “1. Whether the order dated 7.12.2001 passed by the Income Tax Tribunal, Jaipur in ITA No.452/JP/99 dismissing the appeal as unadmitted is against the provisions of law containing in Rule 19 and 20 read with Rule 24; and 2. Whether ITAT seriously erred in passing the impugned order dated 25.2.2009 in M.A. No.21/JP/2008 rejecting the application for

(2 of 4) [ITA-634/2009] recalling the said order dated 7.12.2001 and to hear and decide the appeal on merits filed under Rule 24 of Income Tax (Appellate Tribunal) Rules, 1963 by wrongly applying provisions of Section 254(2) of Income Tax Act, 1961?” 3. Counsel for the appellant Mr. Taneja pointed out the unamended provisions prior to 1.8.1987 the date on which the order was passed particularly Rule 24 which reads as under:- “24. Dismissal of appeal for appellant’s default etc.-where on the day fixed for hearing or any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may in its discretion either dismiss the appeal for default or may hear it ex parte. Provided that where the appeal has been dismissed for default and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the dismissal and restoring the appeal.” 3.1 After amendment w.e.f. 8.4.2002 Rule 24 provides as under:- “24. Hearing of appeal ex parte for default by the appellant.- Where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent: Provided that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non- appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restoring the appeal.”

(3 of 4) [ITA-634/2009] 3.4 Taking into consideration the language of the Rule 24 after amendment, it is clear that tribunal could not have dismissed the appeal for default and ought to have decided the same on merits. 3.4 He has relied upon the decision of this court in Tribhuwan Kumar and ors. vs. Commissioner of Income Tax and anr. reported in (2007) 294 ITR 401 wherein it has been held as under:- “6. Having considered the aforesaid three provisions, we are unable to comprehend the view of the Tribunal that the assessee's appeal was not maintainable in view of Rules 19 and 20 of the Rules. Surely the appeal preferred by the assessee was competent under Section 253 of the IT Act. How, in the circumstances the Tribunal could hold that the assessee's appeal from the order of the CIT(A) was not maintainable when the appeal lay from the said order. The Tribunal misread and misapplied Rules 19 and 20 of the Rules of 1963, in holding that the assessee's appeal was not maintainable. If for any reason, the assessee was not being represented on the date of hearing, the Tribunal could have proceeded for hearing of the appeal ex parte provided in Rule 24 but that was not done. The appeal has not been heard on the merits and the Tribunal erroneously held that the assessee's appeal is not maintainable in law.” 6. Counsel for the respondent supported the order of the tribunal and contended that inspite of several opportunities, the appellant has not complied with the order and the order passed by the tribunal is just and proper. 6.1 He also contended that review application which was preferred before the tribunal was after 4 years and tribunal has rightly rejected the same having no power. 7. We are of the opinion that tribunal is misconceived on the issue raised by the appellant as the application was filed for

(4 of 4) [ITA-634/2009] recalling the order and not for rectification. In that view of the matter, the first issue we have decided in favour of the assessee. The tribunal ought to have reconsidered Rule 24 after amendment and having failed to do so, both the orders are quashed and set aside. The tribunal will decide the merit afresh. 8. The issues are answered in favour of the assessee. The appeal stands allowed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Brijesh 75.