Madras High Court
Rekha Jain vs The Income Tax Officer on 1 March, 2021
TCA.No.169 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 01.03.2021
CORAM
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM
and
THE HONOURABLE MS.JUSTICE R.N.MANJULA
Tax Case Appeal No.169 of 2021
Rekha Jain ...Appellant
Vs
The Income Tax Officer,
Non Corporate Ward – 9(5),
Chennai. ...Respondent
APPEAL under Section 260A of the Income Tax Act, 1961 against
the order dated 11.06.2019 passed by the Income Tax Appellate Tribunal, 'A'
Bench, Chennai in I.T.A.No.827/Chny/2019 for the assessment year 2012-
13.
For Appellant : Mr.A.S.Sriraman
For Respondent : Mr.T.R.Senthil Kumar, SSC
JUDGMENT
(Delivered by T.S.SIVAGNANAM,J)
This appeal, filed by the assessee under Section 260A of the
Income Tax Act, 1961 (for short, the Act), is directed against the order dated
11.06.2019 made in I.T.A.No.827/Chny/2019 on the file of the Income Tax
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TCA.No.169 of 2021
Appellate Tribunal, 'A' Bench, Chennai ('the Tribunal' for brevity) for the
assessment year 2012-13.
2. The appellant has raised the following questions of law:
"1. Whether the Appellate Tribunal is
correct in passing the exparte order by not
granting adequate opportunity of hearing
especially in the context of the legal requirement
for the adherence to the principles of natural
justice?
2. Whether the dismissal of the appeal on
the technical ground of the presumed defect in the
appeal fee paid/remitted is legally sustainable on
the consideration of the limited powers vested
with the Appellate Tribunal in dealing with the
defective appeals and further on the consideration
of the gross violation of the principles of natural
justice?
3. Whether the Appellate Tribunal is correct
in considering the grounds challenging the
validity of the reopening of the proceedings u/s
147 of the Act even though the borrowed
satisfaction should not be reckoned as valid
information for the purpose of assuming such
jurisdiction for completing the re-assessment?
4. Whether the Appellate Tribunal is
justified in not considering the grounds
challenging the validity of reopening despite the
admitted fact of the Respondent/Assessing Officer
defied the law declared by the Supreme Court
reported in 259 ITR 19?
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TCA.No.169 of 2021
5. Whether the claim for tax exemption u/s
10(38) of the Act is valid on the facts and in the
circumstances of the case relating to the bonafide
and genuine share transaction entered into by the
appellant?"
3. We have heard Mr.A.S.Sriraman, learned counsel appearing for
the appellant-assessee and Mr.T.R.Senthil Kumar, learned Senior Standing
Counsel appearing for the respondent – Revenue.
4. The Tribunal, by the impugned order, has dismissed the appeal
filed by the assessee on the ground of non-rectification of defects. Identical
issue was considered by us in the case of M.Mukesh Kumar vs Income Tax
Officer in T.C.A.No.2 of 2021 dated 04.01.2021. The operative portion of
the judgment reads as follows:
“4. It may not be necessary for us to go into
the factual matrix, as the appeal filed by the
assessee before the Tribunal was dismissed on the
ground that the appeal was defective. From the
defect memo, which was notified to the assessee,
we find that the initial of the assessee was shown
as 'I' instead of 'M' and owing to such a reason,
the appeal was dismissed as defective by the
impugned order. In fact, hearing of the appeal
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TCA.No.169 of 2021
took place on 27.3.2019 and none appeared for
the assessee. It is relevant to note that in the
impugned order passed by the Tribunal, the initial
of the assessee has been correctly shown as 'M'.
Thus, the Tribunal itself rectified the mistake.
5. In any event, the mistake, being an
insignificant or inadvertent error, ought to have
been permitted to be rectified instead of
dismissing the appeal on the ground that it was
defective despite Rule 12 of the Income Tax
(Appellate Tribunal) Rules, 1963 provides for
such a procedure to be adhered to. Further, we are
informed that the defect memo issued by the
Registry of the Tribunal along with hearing notice
and the papers were not returned earlier to the
assessee or to their authorized representative.
6. It is high time that the Tribunal evolves a
procedure, by which, the defective papers are
returned to the assessee or the Revenue and
reasonable time can be granted for rectifying the
defects. In fact, such a procedure is being followed
in this Court, as a result of which, many of the
minor defects were rectified and cases are
numbered. Thus, considering the fact that the
appeal was dismissed on a technical ground,
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TCA.No.169 of 2021
which, in our opinion, appears to be on a hyper
technical ground, we are inclined to interfere with
the impugned order.
7. Accordingly, the above tax case appeal
filed by the assessee is allowed, the impugned
order is set aside and the appeal is restored to the
file of the Tribunal to be heard and decided on
merits and in accordance with law. We direct that
the name of the assessee shall be mentioned as
'M.Mukesh Kumar' in all the appeal papers and
the assessee/his authorized representative shall be
permitted by the Registry of the Tribunal to carry
out the corrections and if necessary, clean copies
of the appeal papers shall be made available. The
substantial questions of law raised are left open.
No costs.”
5. We find that the above decision is squarely applicable to the
case on hand. That apart, the Tribunal, while dismissing the appeal as being
defective, has also touched upon the merits of the matter, which should not
have been done. Moresoever, none appeared for the assessee. This is also
one of the reasons for interfering with the impugned order. Therefore, we
are inclined to allow the appeal and set aside the order of the Tribunal.
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TCA.No.169 of 2021
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TCA.No.169 of 2021
T.S.SIVAGNANAM,J
AND
R.N.MANJULA,J
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6. In the result, the Tax Case Appeal is allowed. The impugned
order is set aside and the appeal is restored to the file of the Tribunal to be
heard and decided on merits in accordance with law. Consequently, the
substantial questions of law raised are left open. No costs.
(T.S.S.,J.) (R.N.M.,J.)
01.03.2021
Index: Yes/No
Internet:Yes/No
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To
1. The Income Tax Appellate Tribunal, 'A' Bench,
Chennai.
2. The Income Tax Officer,
Non Corporate Ward – 9(5),
Chennai.
TCA.No.169 of 2021
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