- (1.) This appeal, under section 260A of the Income Tax Act, 1961 (for short the "Act"), has been preferred by the appellant against the order dated 30th April, 2004 passed by the Income Tax Appellate Tribunal, Kolkata in ITA Nos. 915 and 916 (Kol) of 1999 for the assessment years 1995-96 and 1996-97. The appeal was admitted on the following substantial questions of law:-- "(i) Whether the I.T.A.T. erred in law in reversing its own ex parte order passed in the matter based on the identical issue and existing facts and whether such change of opinion is sustainable in law ? (ii) Whether the Income Tax Appellate Tribunal was justified in allowing expenditure incurred for project expenditure for those period when the project was not in operation and/or in existence ? (iii) Whether the Income Tax Appellate Tribunal was wrong in accepting the plea of deferred Revenue expenditure in the absence of any provisions in the Income Tax Act, 1961 in that regard and/or the said acceptance I.T.A.T. is in violation of section 43B of the I.T. Act as such perverse ?" So far as the first question is concerned, it is submitted by Mr. S.N. Dutta, learned Advocate for the appellant that the Tribunal, by the order under appeal, erred in law in reversing in its own order passed in the matter based on the facts on record and thus it was a change of opinion. Submission is as the Tribunal by the order dated 21st February, 2003 had turned the plea of the assessee, the order passed subsequently on 30th April, 2004 allowing deduction of the expenditure incurred was illegal.
(2.) Mrs. Anupa Banerjee, learned advocate for the respondent submits that after ex parte order dated 21st February, 2003 was passed, her client had filed a Miscellaneous Petition under Section 254(2) of the Act before the Tribunal praying for recall of the order dated 21st February, 2003 which is not annexed to the Paper Book. Submission is though it has been submitted on behalf of the appellant that the Tribunal has no power to recall the order and to rehear the appeal on merits, however, in view of the judgments of the High Court in ITO v. Murlidhar Sarda, 1975 99 ITR 485 and Khaitan Paper & Industries Ltd. v. CIT, 2005 273 ITR 234 (Cal.), as the settled position of law is the Tribunal has the power to restore and rehear an appeal already disposed of on merits and as in the instant case it is evident from the documents filed that the assessee was prevented by sufficient cause from not appearing before the Tribunal, the Tribunal was justified in recalling the order and rehearing the appeal. Let a copy of the Miscellaneous Petition under section 254(2) of the Act filed before the Tribunal, furnished be kept on record.
(3.) Admittedly Paper Book filed by the appellant does not contain the Miscellaneous Petition filed by the respondent before the Tribunal for recalling the order dated 21st February, 2003 and the order passed thereon. As it appears that the Tribunal had recalled the order dated 21st February, 2003 and had proceeded to hear the appeal afresh after giving notice to the parties and had passed the impugned order, in view of the law laid down in Murlidhar Sarda and in Khaitan Paper & Industries Ltd. , the question No. (i) is answered in the negative, against the Revenue and in favour of the assessee.;