The Tax Publishers2020 TaxPub(DT) 5606 (Del-HC) : (2021) 430 ITR 0291

CONSTITUTION OF INDIA, 1950

Article 226 Rule 25

Where Tribunal had passed an ex parte order, due to non-appearance of Revenue, even though the order was passed on merits and assessee was prevented by sufficient cause from appearing before the ITAT when the appeal was taken up for hearing, further, Tribunal had taken into consideration such reasons which were not germane for deciding the Miscellaneous Application, therefore, petition was allowed.

Writ - Rectification under section 254 - Tribunal decided appeal of the revenue on merits and ex parte, as there was no presence on behalf of the petitioner -

Based on the survey under section 133A and other materials, an assessment was made making additions to Petitioner's income. Assessee filed an appeal before CIT(A) which was decided by CIT(A) in favour of assessee, and the additions made by AO were deleted. Revenue preferred an appeal before the ITAT and the said appeal was heard ex parte and allowed in favour of the Revenue. Petitioner filed the Miscellaneous Application under section 254(2) seeking setting aside of the ex parte order and restoration of the appeal. Petitioner also filed an appeal under section 260A before this Court and assailed the Order. However, as the M.A. was still pending before the ITAT, this Court disposed of the said appeal, granting liberty to the Petitioner to approach this Court in the event the Miscellaneous Application was not accepted by the Tribunal. Held: The proviso to Rule 25 deals with the situation where the Tribunal has passed an ex parte order, due to non-appearance of Revenue, even though the order was passed on merits. Thus, reasoning given in Order was beyond the scope and ambit of rule 25 of the ITAT Rules. Assessee was prevented by sufficient cause from appearing before the ITAT when the appeal was taken up for hearing. Further, Tribunal had taken into consideration such reasons which were not germane for deciding the Miscellaneous Application. The sufficiency of the cause, which was the only factor to be examined, was ignored by the Tribunal. If sufficient cause was shown, Tribunal was obligated to consider the same and make an order setting aside the ex parte order, irrespective of the fact that the final order decided the appeal on merits. Therefore, petition was allowed.

REFERRED : Kalra Papers (P) Ltd. v. ITO [ITA 113/2019 & CM Nos.5197-98/2019, dt. 5-2-2019] and ITO v. Kalra Papers (P) Ltd. [ITA No. 2297/Del/2014, dt. 24-7-2018].

FAVOUR : In assessee's favour

A.Y. : 2009-10



IN THE DELHI HIGH COURT

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