1. The matter is listed on the question of admission.
2. The appeal is admitted for final hearing on the following substantial question of law:
Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in proceeding ex parte in the matter and further erred in rejecting the appellant's application for bi-parte hearing ?
3. With the consent of the parties and as the question is very short, the appeal is finally heard.
4. The short facts necessary for disposal of the present appeal are that before the Income-tax Appellate Tribunal, the assessee was represented by Shri S. K. Jain who had withdrawn his power on the date of the final hearing itself. It is to be noted that after the assessee's representative had withdrawn his power, the matter was not adjourned nor any notice was issued to the assessee but the learned Tribunal proceeded to decide the appeal on basis of the written arguments which were available on the record. After the said final order was passed on December 20, 2007, the present appellant made an application under Section 254(2) of the Income-tax Act, with a submission that for the lapse on the part of the counsel and as there was no representation, the final order be recalled and the matter be again heard.
5. Vide the impugned order dated June 20, 2008, the learned Tribunal observed that all the points raised by the assessee in his written arguments were considered by the Tribunal in its order dated December 20, 2007, therefore, no prejudice was occasioned to the assessee even if the appellant's representative had withdrawn his power.
6. Being aggrieved by the said order dated June 20, 2008, the petitioner/ appellant/assessee, is before this Court.
7. After hearing learned Counsel for the parties and on going through the order dated June 20, 2008, and the submissions made in the application filed under Section 254(2) of the Income-tax Act, we are of the considered opinion that the present appellant had made out sufficient cause for recalling of the order dated December 20, 2007. We are obliged to observe that if the representative of a party or a counsel for the party withdraws from the case without informing the assessee or the appellant or a party whom he represents then the court ordinarily should not proceed to decide the matter on the merits, because nobody knows that apart from the written arguments, what counsel could orally submit.
8. Taking into consideration the totality of the circumstances and, for the reasons aforesaid, we hold that the learned Tribunal was unjustified in passing the order dated June 20, 2008, and erred in rejecting the appellant's application filed under Section 254(2) of the Income-tax Act.
9. The appeal is allowed. The order dated June 20, 2008, is set aside and consequently the order dated December 20, 2007, passed in I. T. A. No. 299/Indore/99 for the assessment year 1995-96, is also set aside. The appellant shall appear before the Tribunal on January 27, 2009, with a copy of this order. After receiving the copy of this order, the learned Tribunal shall fix the date of hearing and shall decide the matter at its earliest in accordance with law.