D. MANMOHAN, VICE-PRESIDENT 
AND S. RIFAUR RAHMAN, ACCOUNTANT MEMBER

Snehal Thakkar for the Applicant. 
M. Sitaram for the Respondent.

ORDER

D. Manmohan, Vice-President - All these applications were filed at the instance of the assessee. At the outset, it may be noticed that as per the law existing at the relevant point of time, a M.A. has to be filed within 04 years from the date the Tribunal passes an order. In these matters, M.As are filed beyond the period of limitation and unlike appeal proceedings there is no provision to condone the delay. Therefore, the limited issue before us is whether the M.As are barred by limitation or not? If they are treated as barred by limitation, automatically these M.As deserve to be dismissed as un-admitted.

2. However, the case of the Ld. Counsel for the assessee is that though the appeals are disposed of by the Tribunal the order passed therein cannot be treated as an order passed under law inasmuch as Section 254(1) mandates disposal of an appeal on merits even if no one appeared for the assessee whereas the impugned order was passed by dismissing the appeal 'for want of prosecution'.

3. Brief facts which are necessary for disposal of these matters are set-out hereunder. There are total 17 appeals out of which 14 appeals are filed by the Assessees and three appeals are filed by the Revenue. Some of the appeals were filed way back in 1996/1997. Soon-after numbering the appeals, most of the appeals were posted for hearing in 1998 and from then onwards, assessees' counsels were seeking adjournments from time to time and on 22.07.1998 it was specifically mentioned that the cases would be adjourned 'finally' on the undertaking of assessees' Counsel that he would not be seeking further adjournments. But again on 07.08.1998, the assessees sought one more adjournment and hence the Bench adjourned it 'sine die' but again from 2007 onwards appeals were posted for hearing from time to time but a new Counsel appeared, again seeking adjournments on some pretext or the other. After sufficient lapse of time, a request was made to club departmental appeals and other appeals and accordingly, the appeals were grouped together. Even thereafter, the cases were adjourned on number of occasions. Finally when the appeals were posted for hearing on 18.03.2008, the Bench rejected the request of the assessees for further adjournment by observing as under :—

". . . . . . . . . . . . It is indeed a very sorry state of affairs that the appeals, though very old, have not been disposed of yet and for which the major blame goes to the assessees themselves. The earliest appeal was filed in 1996 and most of the other appeals are filed as back as in 1997. The earliest assessment year involved is 1985-86, i.e. about twenty two years back from now. The lackadaisical approach of the assessee leading to procrastination is evident at least from two instances which are immediately striking from the records. Way back in October. 2001, the Honourable Andhra Pradesh High Court had disposed of a writ petition in one of the group companies (W.P. No. 15830 of 2000 in the case of Unique Plastics Ltd.) directing the Tribunal to dispose of the appeals pending before it expeditiously, preferably within a period of six months. However, the assessees remained unmindful of the directions of the High Court and kept on seeking adjournments. It is not that the department has not sought any adjournment but the assessees have sought adjournments on overwhelmingly more occasions. Another instance is that one of the departmental appeals in the case of Shree Gouraavi Plastics Ltd., (ITA. No. 526/Hyd/06) was posted for hearing on 05.02.2008. On that date, the assessee sought adjournment stating that the case of Gouraavi Plastics be adjourned to 18.3.2008 for hearing along with other group matters. In good faith, the Bench granted the request. However, on 18.3.2008 i.e., today, again a request has been sent in for adjournment and the reason stated is that the company's managing director as well as the chartered accountant are out of station. In the past also, many adjournments have been sought on this and other flimsy grounds. On earlier occasions, it has been stated that the chartered accountant is busy in audit work or in some other professional work. All these only go to show that both, for the assessees as well as the chartered accountant, matters pending before the Tribunal have the last priority amongst all these business and professional engagements and for twelve long years no priority status has been accorded to the Tribunal. As a matter of fact, the liberal attitude of the tribunal has been taken for granted and the assessees are still stretching it as far as they can without realising the tolerance threshold of the Tribunal and the level of its elasticity. Thus, considering the history of adjournments and the conduct of the assessees, we reject the request for adjournment and dismiss all the appeals of all the assessees for want of prosecution."

4. While dismissing the appeals filed by the assessees the Tribunal observed that there were three appeals filed by the Revenue also in the case of Mahaveer Combines P. Ltd., and Unique Plastics P. Ltd., wherein the department challenged the deletion of the addition made on protective basis particularly on account of the fact that the additions made on substantive basis are pending before the Tribunal. In this regard, the Tribunal observed that the assessee's appeals having been dismissed by upholding the additions made on substantive basis the appeals relating to the protective additions do not survive and on that ground they were also dismissed with a rider that "if the appeals of the assessee are reinstated by the Tribunal, then the three appeals of the department shall also stand reinstated automatically."

4.1 Though the orders were passed on 18.03.2008, the assessees herein preferred to file M.As on 06.10.2015 after lapse of about 07 years whereas the statute permits an assessee to prefer a M.A. within 04 years. When called-upon the Ld. Counsel appearing on behalf of the assessee to explain as to how such M.As can be admitted, the Ld. Counsel vehemently contended that the adjournments granted on earlier occasions, from 1996 onwards, need not be reconsidered at this stage since the Bench, at that point of time, though fit to grant adjournments but certainly from 2005 onwards on most of the occasions either the Revenue has asked for adjournment or the Bench has not functioned and only on two occasions the assessee sought adjournments i.e., on 05.03.2007 and 22.06.2007 that too on account of illness of the Chairman of the group of the companies and also on account of the fact that he was facing various other Court proceedings before the Enforcement Directorate etc., and non-attendance in such cases might have resulted in detention of the appellants/Directors of the assessees' companies. Under these circumstances, the assessees herein had to seek adjournment before the Tribunal and thus there was a reasonable cause for non-appearance on the dates fixed for hearing.

4.2 Provisions of section 254(2) mandates that a M.A. has to be filed within 04 years from the date of the order and in the absence of any power vested in the Tribunal to condone the delay, no application is maintainable beyond 04 years. When the same was pointed out to the Ld. Counsel appearing on behalf of the assessee, it was submitted that the impugned consolidated order of the Tribunal cannot be considered as an order passed under section 254(2) of the Act and in such cases, the time limit prescribed under section 254(2) does not apply. In this regard, he relied on the decision of the Hon'ble Apex Court in the case of Sri Ayyanar Spg. & Wvg. Mills Ltd. v. CIT [2008] 301 ITR 434/171 Taxman 498. In the aforecited case, the Hon'ble Supreme Court observed that the provisions of Section 254(2) consists of two parts i.e., first part of section 254(2) refers to suo motu power of rectification by the Tribunal whereas the second part refers to rectification and amendment of an application being made by the A.O. or the assessee pointing out the mistake from the record. The application having been filed within 04 years, merely because the Tribunal had taken time to dispose of an application the High Court should not have held that the application filed by the party cannot be entertained beyond the period of 04 years. The Apex Court also approved the decision of Hon'ble Rajastan High Court in the case of Harshvardhan Chemical & Minerals Ltd. v. Union of India [2002] 256 ITR 767/123 Taxman 965 wherein the Court observed that if an application is moved within the period as allowed i.e., 04 years, the Tribunal may, at any time, dispose of the application even if the time taken is beyond 04 years. Ld. Counsel appearing on behalf of the assessees submits that the aforecited decisions referred to the suo motu powers of the Tribunal to consider the matter on merits any time even after the expiry of limitation of 04 years. He also submitted that upon filing an appeal before the Appellate Tribunal, it is the duty of the Tribunal to dispose of the appeal as per the provisions of section 253 of the Act by passing an appropriate order whereas, in the instant case, the Tribunal had not passed a valid order since it is in violation of Rule 24 of the Appellate Tribunal Rules and also contrary to the decision of the Apex Court in the case of CIT v. S. Chenniappa Mudaliar [1969] 74 ITR 41 as well as the decision of the Apex Court in the case of Balaji Steel Re-rolling Mills (Civil Appeal No. 10265 of 2014). In the said case, the Apex Court observed that the Tribunal has no power to dismiss the appeal for want of prosecution. Thus, he contended that order passed in violation of the Supreme Court order is non-est in the eye of Law which cannot be taken forward in appeal before the higher authorities and therefore, the assessee could not prefer an appeal before the High Court. Thus, it is not treated as an order passed under section 254(1) and the question of limitation under section 254(2) does not arise at all. It was contended that the parliament, in its wisdom, has not enacted any mandatory provision in the I.T. Act or in the I.T. Rules wherein any time limit was prescribed for the Tribunal to pass an order and therefore, the Tribunal is not barred by any law to complete the process of disposal of appeals (out of 14 appeals filed by the assessees herein) on merits at least at this stage. He also relied upon the decision of the Hon'ble Bombay High Court in the case of Bharat Petroleum Corpn. Ltd. v. JTAT [2013] 359 ITR 371/[2014] 42 taxmann.com 25 wherein the Court observed that an 'order' passed in violation of Rule 24 of the I.T. Rules is 'irregular'. He also relied upon the decision of Hon'ble Supreme Court in the case of State of Haryana v. AGM Management Services Ltd., [Civil Appeal No. 2751 of 2006 dated 15.06.2006] to submit that the Tribunal should limit itself to interpreting the statute, instead of interpreting the judgment by taking each word as sacrosanct. In otherwords, the case of the assessee is that in the light of binding judgment of the Hon'ble Supreme Court in the cases of Sri Ayyanar Spg. & Wvg. Mills Ltd. (supra) and Chenniappa Mudaliar (supra), the Tribunal has no power to dismiss an appeal for non-prosecution in which event the Tribunal is duty bound to pass an order under section 254(1) failing which the assessee is entitled to file a petition under section 254(2) for recall of the 'irregular' order passed by the Tribunal. He also relied upon the observations made by Lord Denning to submit that each case depends on its facts and one should avoid the temptation to decide cases matching colour of one case against the colour of another.

5. The Ld. D.R., in his written submissions contended that when an assessee takes a conscious decision of not preferring an appeal even after lapse of 04 years, he should be treated as guilty of negligence, in which event, a petition for condonation of delay should not be permitted. In this regard, he referred to the decisions of the ITAT i.e., S.S. Builders v. ITO [IT Appeal No. 5765 (Mum.) of 2009, dated 4-6-2010], ITAT Hyderabad Bench decision in the case of T. Kishan v. Asstt. CIT [2013] 56 SOT 114/23 taxmann.com 383. He has also relied upon various decisions of High Courts to submit that if an assessee follows lackadaisical approach, by not challenging the order within the time frame prescribed, the authorities concerned should not extend the benefit of condonation in such cases. He has also highlighted the reasons given by the assessees in the M.As, as well as in the written submissions filed on behalf of the assessees, to submit that assessees have not provided any proof to show that they have shifted to a far-off place abandoning their whole interest in Hyderabad. Therefore, assessees' explanation for the delay cannot be accepted on the face of it.

5.1 He further contended that Rule 24 of the I.T. Rules cannot have independent application since the said Rules are framed in exercise of the powers conferred in sub-section (5) of section 255 of I.T. Act. He also distinguished line of decisions cited by the Ld. Counsel for the assessee by stating that in the case law relied upon by the assessees the M.As were filed within the time frame of 04 years wherein the delay, in not passing an order, is not in the control of the parties who approached the Court and under those circumstances, the Hon'ble Rajasthan High Court observed that delay on the part of the Tribunal in disposing of an application should not come in the way of the rights of the assessee. In otherwords, if an application is filed in time, delay in disposal of the application should not be taken as a ground to hold that the provisions of Section 254(2) of the Act are not applicable. In the instant case, there was a substantial delay in filing of the M.A. and assessees herein consciously chose not to prefer any application before the High Court against the orders under section 254(1) of the I.T. Act. Therefore, the M.As filed by the assessees deserve to be dismissed, having been filed beyond the period of limitation.

6. We have heard the rival contentions and perused the record. We have also carefully gone through the case law relied upon by the Ld. Counsel for the assessee as well as the Ld. D.R. and also examined various precedents on this issue. It is not in dispute that the assessees herein moved M.As under section 254(2) of the I.T. Act, 1961 which in turn, refers to an order passed under section 254(1) of the I.T. Act. At the same time, Ld. Counsel, appearing on behalf of the assessees, submits that the Tribunal had no power to dismiss the appeal for want of prosecution and as a consequence thereof earlier orders passed in the year 2008 are to be treated as non-est in law; In the circumstances it can safely be said that there is no order passed under section 254(1) of the Act and therefore, the method followed in disposing of the appeals and the so-called order deserves to be recalled.

7. In our considered opinion, the assessees plea deserves to be rejected on the face of it for two reasons. Firstly, if a procedure has been followed by the Tribunal - dismissing the appeals for want of prosecution - which, in the opinion of the assessees herein, is contrary to the decisions of the Apex Court, the proper remedy would be to challenge the said order before the Hon'ble High Court since to our limited knowledge Article 227 of the Constitution of India empowers a party to request the Hon'ble High Court to quash any order passed by the Tribunal which is contrary to law, while exercising it's supervisory jurisdiction. The assessees, for the reasons best known to them, have not chosen to prefer either appeals or a writ petition to invoke the jurisdiction of the Hon'ble High Court either under section 260A of the I.T. Act or under Article 227 of the Constitution of India. In otherwords, the assessees having not chosen to pursue the remedy available, they cannot - after long lapse of time - claim that the order passed by the Tribunal is contrary to law. In the case of Parshuram Potteries Works Co. Ltd. v. ITO [1977] 106 ITR 1 at page-10 the Hon'ble Supreme Court observed that stale issues should not be re-activated beyond a particular stage and there must be a point of finality in all the legal proceedings; lapse of time must induce or set at rest all judicial and quasi-judicial controversies as it must in others spheres of human activity. A proper approach is to challenge the order before a higher Forum, either under section 260-A of the Income Tax Act or in writ jurisdiction, by taking immediate steps, after disposal of the appeals. Here is a case where there was more than 07 years delay and in fact, the assessees did not choose to pursue such a kind of remedy. At the same time, the Ld. Counsel appearing on behalf of the assessee submits that the impugned order passed by the Tribunal cannot be treated as an order passed under section 254(1) of the Act. Section 254(2) of the Act speaks of rectifying mistakes in the orders passed under section 254(1) of the Act and if the assessees claim that there was no order passed under section 254(1), there is no right of filing a petition under section 254(2) of the Act.

7.1 The second aspect of the matter is that the dismissal of appeal for want of prosecution - though according to the assessees is illegal or contrary to law - is nevertheless an order passed under section 254(1) of the Act in which event the remedy available to the assessees is to file a petition before the Tribunal to recall the order within a period of 04 years as has been prescribed under law. If a M.A. is filed beyond the period of 04 years it cannot be entertained by the Tribunal and hence, the reasons for the delay in filing M.As cannot be gone into. Appellate Tribunal being a creature of statute cannot accept any miscellaneous application, which is filed beyond the period of limitation prescribed under statute.

7.2 In the case of Bharat Petroleum Corporation (P.) Ltd. (supra) and in the case of Chemipol v. Union of India[Central Excise Appeal No. 62 of 2009 dated 17.09.2009] the Hon'ble Bombay High Court relied upon various Supreme Court and High Court judgments and extracted the observations of his Lordship Chief Justice Hidaytullah in Sunderlal Mannalal vs. Nandramdas Dwarkadas (AIR 1958 MP 260) to highlight that no Court or Tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared. This observation of Justice Hidaytullah was approved by the Hon'ble Supreme Court in Dr. P. Nalla Thampy Thera v. B.L. Shankar 1984 (Supp.) SCC 631. In the case of New India Assurance Co. Ltd. v. R. Srinivasan [2000] 3 SCC 242, the Supreme Court observed that every judicial body or authority inherently possesses the power to dismiss a case in default. These decisions were referred to by the ITAT, Mumbai Bench in the case of Bharat Petroleum Corpn. Ltd. v. Asstt. CIT [2014] 66 SOT 11/49 taxmann.com 397 (Mum. - Trib.) wherein the Tribunal observed that the Rules do not circumscribe the jurisdiction of the Tribunal conferred by the statute and if the assessee is habitually taking adjournments, despite granting sufficient time, the assessee is responsible for the dismissal of the appeals for non-prosecution and therefore, the Tribunal cannot be found to have committed a mistake. This decision was affirmed by Hon'ble Mumbai High Court (supra).

7.3 In the M.As filed before us the assessees have filed the applications under Rule 24 of the I.T. Rules for which the assessees have to furnish proper reasons for non-appearance on the dates fixed for hearing. The explanation given on behalf of the assessees is very vague. It was submitted in the application that Sri Paresh Dhanji Chedda has serious health problems because of his old age and he was medically adviced to take rest in his native village at Kutch in Gujrat and to take care of him the entire family shifted to Kutch. In 2012 when his condition further deteriorated he was brought back to Hyderabad in critical condition for medical treatment. However, he could not survive and ultimately passed away in 2013. Thereafter, the family members had gone back to the native place to settle several things which caused further delay in filing M.As.

7.3.1 It may be noticed that the appeals were dismissed for want of prosecution in 2008 and there is nothing on record to suggest that assessees have completely shifted lock, stock and barrel from Hyderabad in 2007 itself. On the other hand, the cases were adjourned at the request of the assessees in the month of October, 2007 and November, 2007 and finally posted on 18.03.2008. Therefore, it is the duty of the assessees to follow-up with their Counsels as to what was the latest position on the matter. Assessees herein have merely given a vague statement that they have left in 2007 and returned only in 2012. Be that as it may, even if they have returned in 2012, it is not known as to why no effort was made to file any petition immediately thereafter. In otherwords, reasons for taking further time of 03 years, in choosing to file M.As, could not be explained. Thus even under Rule 24 of the Appellate Tribunal Rules it cannot be said that assessees had any reasonable cause for the delay in filing the M.As. However, in our opinion, it is not necessary for us to consider the reasonable cause since the Tribunal has no power to condone the delay, in view of the mandate of the provisions of section 254(2) of the Act which permits a party to approach the Tribunal within a period of 04 years if there is a mistake in the order passed by the Tribunal. The ratio of the Supreme Court decisions cited by the Ld. Counsel for the assessees are applicable only when the parties to the dispute approached the Tribunal within the period of limitation; the Supreme Court was of the view that the delay on the part of the Tribunal in disposing of the applications should not effect the rights of the parties if M.As are filed within the period of limitation. In the present applications, admittedly, the applications were filed beyond period of 04 years in which event the Tribunal had no power to admit the M.As in the light of plain language of the provisions of section 254(2) of the I.T. Act.

7.3.2 As already discussed hereinbefore, if the assessees seek to contend that these are not applications filed under section 254(2) then the remedy lies elsewhere and the assessees ought to have challenged the orders passed under section 254(1) at an appropriate Forum. But the assessees chose not to challenge the common order passed by the Tribunal. As rightly pointed out by the Hon'ble Apex Court in the case of Parshuram Potteries Works Co. Ltd. (supra), there should be a point of finality in all legal proceedings and stale issues should not be re-activated beyond a particular stage even if on a particular aspect the Court may have a sympathetic view on the party.

7.4 Before parting, we may observe that the Tribunal is a final fact finding authority and matters involving facts can be decided on merits only when facts are placed on record. In these group of matters, additions were made consequent to search action conducted on 14.09.1995 jointly in the case of Mr. Paresh Dhanji Chedda. The additions are based on certain material found during the course of search. The A.O. has given a categorical finding on the issues on hand after taking into consideration the relevant material. If the assessees challenge the finding of the tax authorities it is for them to file paper books to highlight that the decisions rendered by the lower authorities is not in accordance with law and facts. Paper Book, if any, has to be filed under Rule-18 of the Appellate Tribunal Rules. Rule 18(6) says that only those papers which are referred to at the time of hearing can be taken as papers filed before the Tribunal. The relevant Rule is extracted for immediate reference :—

"Rule 18(6) : Documents that are referred to and relied upon by the parties during the course of arguments are alone be treated as part of the record of the Tribunal."

7.5 In the appeals filed before us, admittedly, no material was referred to by the parties before us. Under these circumstances, the only course open to the Tribunal is to hold that the assessees having not challenged the orders passed by the lower authorities by relying upon proper material, appeals filed by them deserve to be dismissed. It is well-known that without material papers assessees' cannot support their stand and ordinarily, under these circumstances, the Tribunal dismisses appeals by observing "dismissed for want of prosecution". The net effect is that the appeals cannot be decided on merits in the absence of any material placed on record. It is not the case of the assessees herein that they have filed material before the Tribunal or there is any specific legal issue which can be disposed of in the light of settled legal decisions without the aid of further facts. Such being the case, in our opinion, the order passed by the Tribunal, under section 254(1) of the Act, is proper and as rightly observed by the Hon'ble Bombay High Court in the case of Chemipol (supra) the Tribunal will have no other alternative except to exercise their inherent powers to dismiss the proceedings for non-prosecution. It cannot thus be said that it is not an order passed under section 254(1) of the Act. Right of appeal or Right of filing a petition for recall is not a constitutional right but a right vested under the statute and it has to be exercised strictly in conformity with the letter of the law. The statute prescribed period of 04 years within which a M.A. can be filed by an assessee and no power is vested in the Tribunal to admit any M.A. filed beyond the period of 04 years. Such being the case, the M.As. filed after period of more than 07 years and nearly 08 years deserve to be dismissed as un-admitted.

7.6 On a conspectus of the matter, we hold as under :—

In the result, the M.As filed by the assessees are dismissed.