The ITAT's dismissal of an appeal for non-prosecution instead of on merits and refusal to restore the same, despite applications by the petitioner, was violative of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963. The application for restoration of the appeal was within time and could not have been dismissed based on the provisions of limitation applicable to Section 254(2) of the Income Tax Act.

JUDGMENT

Rajiv Sahai Endlaw, J. - The petition impugns, (a) the order dated 23rd December, 2020 of the Income Tax Appellate Tribunal (ITAT), New Delhi, of dismissal of M.A. No. 118/DEL/18 filed by the writ petitioner in ITA No. 3844/DEL/2013 for Assessment Year 2008-09; as well as, (b) the order dated 10th December, 2015 of dismissal of ITA No. 3844/DEL/2013; and, seeks adjudication on merits of ITA No. 3844/DEL/2013.

2. We have heard the counsel for the petitioner and the counsel for the respondent appearing on advance notice.

3. Considering the nature of the controversy, the need to call for a counter affidavit is not felt.

4. The petitioner preferred ITA No. 3844/DEL/2013 aforesaid before the ITAT, for Assessment Year 2008-09. However the petitioner failed to appear, when the said appeal was listed on 9th December, 2015 and the ITAT, vide impugned order dated 10th December, 2015, recording that on earlier occasion also when the appeal was listed, adjournment was sought on behalf of the petitioner and that the petitioner did not appear to be interested in pursuing the appeal, and referring inter alia to Commissioner of Income Tax (Central) Vs. B. N. Bhattacharjee, (1979) 118 ITR 461, holding that the appeal does not mean mere filing of memo of the appeal but effectively pursuing the same, dismissed the appeal for nonprosecution.

5. The petitioner, in or about March, 2017, filed an application for recall of the order dated 10th December, 2015 of dismissal for nonprosecution of ITA No. 3844/DEL/2013 aforesaid. The said application was dismissed by the ITAT vide order dated 7th February, 2018, recording/reasoning, (i) that the petitioner had filed its return declaring total income of Rs.17,72,070/-; (ii) that the Assessing Officer made addition to the extent of Rs.9,78,25,000/-; (iii) that the appeal preferred by the petitioner was dismissed by the Commissioner of Income Tax (Appeals); (iv) that the petitioner preferred appeal to the ITAT on 17th June, 2013 but which was dismissed in limine vide order dated 10th December, 2015; (v) it was the case of the petitioner in the subject application, that the petitioner, between 8th December, 2015 and 10th December, 2015 was ill and hence could not appear when the appeal was listed on 10th December, 2015; (vi) that the petitioner, in effect was seeking rectification of the order dated 10th December, 2015; (vii) that under Section 254(2) of the Income Tax Act, the petitioner has time period of four years to apply for restoration of the appeal, on providing sufficient reasons for non-appearance; (viii) however Section 254(2) had been amended with effect from 1st June, 2016 and after amendment, any miscellaneous application had to be filed within six months from the date of the order; (ix) though as on the date of the order dated 10th December, 2015, the petitioner had time period of four years to file an application under Section 254(2) of the Income Tax Act, for restoration of the appeal, however vide amendment w.e.f 1st June, 2016, the said period of four years was reduced to six months; and, (x) thus application for restoration of the appeal dismissed on 10th December, 2015 had to be filed within six months and the application was barred by time. Resultantly, the said application was dismissed.

6. The petitioner, instead of preferring remedies against the aforesaid order dated 7th February, 2018, on 26th February, 2018, filed another application being M.A. No. 118/DEL/18 aforesaid, for recall of the order dated 7th February, 2018. The said application has been dismissed vide the impugned order dated 23rd December, 2020, reasoning that the subject second application was not maintainable and the order dated 7th February, 2018, which was a speaking order, could not be reviewed as the purport of the petitioner was.

7. The net result of the aforesaid is, that the appeal preferred by the petitioner before the ITAT, remained to be decided on merits.

8. A Division Bench of this Court of which one of