Ex parte tax appeal dismissal for non-appearance: s.254(2) limitation runs from order receipt; recall granted, rehearing set.

The dominant issue was whether an ex parte ITAT order could be recalled under s. 254(2) despite the four-year limitation. The Tribunal construed "date of the order" in s. 254(2) as the date of receipt/communication to the party, and held the miscellaneous application was within time. On merits of recall, applying principles of natural justice and the precedent on restoration where an appeal was dismissed ex parte without adjudication, it found sufficient cause for non-appearance and treated the non-hearing as a mistake warranting rectification. The ex parte order was recalled, the appeal was directed to be fixed for out-of-turn hearing within three months, and notice was to issue at the updated address.

---

---

Issues Involved:
1. Restoration of the appeal dismissed ex-parte by the Tribunal.
2. Limitation period for filing an application for recalling the ex-parte order.
3. Interpretation of "date of order" under section 254(2) of the Income Tax Act.
4. Validity of the Tribunal's ex-parte order and whether it can be recalled on the grounds of non-communication.

Issue-wise Detailed Analysis:

1. Restoration of the appeal dismissed ex-parte by the Tribunal:
The assessee sought restoration of the appeal in ITA no. 6756/Mum/2012, which was dismissed ex-parte by the Tribunal for non-prosecution on 4th August 2006, for the assessment year 1990-91. The Tribunal had dismissed the appeal after noting that the assessee did not appear on multiple hearing dates. The assessee, a blind man aged over 62 years, claimed that his Chartered Accountant did not cooperate and failed to inform him about the hearing dates or the ex-parte order. The assessee only became aware of the order after the Income-tax Department initiated proceedings for the attachment and subsequent auction of his office property.

2. Limitation period for filing an application for recalling the ex-parte order:
The application for recalling the ex-parte order was filed on 1st March 2012, which was beyond the limitation period by 576 days. The assessee argued that the limitation period should start from the date he received the order, which was 17th February 2012, not from the date the order was signed.

3. Interpretation of "date of order" under section 254(2) of the Income Tax Act:
The assessee's counsel argued that the phrase "four years from the date of order" in section 254(2) should be interpreted as the date on which the order was communicated to the assessee. The counsel cited various Supreme Court and High Court decisions supporting this interpretation, including:
- D. Saibaba v. Bar Council of India [2003] 6 SCC 186
- Madan Lal v. State of U.P., AIR 1975 SC 2085
- Vijay Kumar Ruia v. CIT [2011] 334 ITR 38
- Petlad Bulakhidas Mills Co. Ltd. v. Raj Singh [1959] 37 ITR 264 (Bom.)

The Tribunal noted that the interpretation of "date of order" should align with the principles of fair play and natural justice, meaning the date when the order is communicated to the party concerned.

4. Validity of the Tribunal's ex-parte order and whether it can be recalled on the grounds of non-communication:
The Tribunal acknowledged that the assessee, being blind and dependent on his Chartered Accountant, was not aware of the ex-parte order until much later. The Tribunal referred to the Supreme Court's judgment in Raja Harish Chandra Raj Singh v. Dy. Land Acquisition Officer, AIR 1961 SC 1500, which emphasized that the limitation period should start from the date the order is communicated to the affected party. The Tribunal also considered the Special Bench decision in Arvindbhai H. Shah v. Asstt. CIT [2004] 91 ITD 101 (Ahd.), which did not express an opinion on whether the limitation period should be counted from the service of the order.

Conclusion:
The Tribunal concluded that the "date of order" under section 254(2) should be construed as the date when the order is received or communicated to the party. Since the assessee received the order on 17th February 2012, the application for recalling the ex-parte order was within the limitation period. The Tribunal recalled the ex-parte order dated 4th August 2006 and directed the Registry to fix the appeal for hearing on merits within three months, ensuring that the notice is served at the assessee's updated address.

Result:
The assessee's miscellaneous application was allowed, and the ex-parte order was recalled for a hearing on merits.

---