Tribunal's Decision to Recall Order Upheld by High Court Due to Non-Appearance Issue

The High Court upheld the Income-tax Appellate Tribunal's decision to recall an order in a case where the appellant and respondent did not appear during the hearing. The Tribunal had the authority to set aside the order and reinstate the appeal based on the proviso to Rules 24 and 25 of the ITAT Rules, which allow for such action if sufficient cause for non-appearance is demonstrated. The High Court found that the Tribunal's decision was justified as the notice of the hearing was not properly served, leading to the non-appearance. The appeal challenging the recall of the order was dismissed.

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Issues: Rule 24 of ITAT Rules - Competency to recall order

The judgment pertains to the competency of the Income-tax Appellate Tribunal (ITAT) to recall an order passed in a case where the appellant or respondent did not appear during the hearing. The case involved cross-appeals filed by the Revenue and the assessee, which were disposed of on the merits by the Tribunal. The assessee later sought a recall of the order, which the Tribunal allowed, setting aside its earlier decision and restoring the appeals for fresh hearing. The Revenue challenged this decision, arguing that the Tribunal was not authorized to recall the order but could only rectify it. The High Court disagreed, citing the proviso to Rules 24 and 25 of the ITAT Rules, which empower the Tribunal to set aside an ex parte order and restore the appeal if sufficient cause for non-appearance is demonstrated.

The High Court emphasized that once the appellant proved a sufficient cause for non-appearance during the hearing, the Tribunal had the authority to set aside the order and reinstate the appeal. In the present case, the Tribunal found that the notice of the hearing was not properly served to the appellant or the respondent, justifying their non-appearance. Therefore, the Tribunal's decision to recall the order was deemed appropriate based on the factual findings. The High Court concluded that there was no merit in the appeal, and no substantial question of law arose for consideration. Consequently, the appeal was dismissed.

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