2003 (6) TMI 434 - AT - Income Tax

Summary

Issues:
Service of notice on the respondent's wife, Validity of notice served, Power of Appellate Tribunal to recall order.

Service of Notice on Respondent's Wife:
The respondent claimed that the notice of hearing was served on his wife, who was not authorized to receive it, and she did not hand it over to him. The respondent argued that this constituted improper service of notice, preventing him from appearing before the Tribunal. An affidavit from the wife supported this claim. The Tribunal noted the address issue and the return of the ex parte order due to non-delivery, subsequently served through the Income Tax Officer. The respondent contended that the service through the wife was invalid.

Validity of Notice Served:
The Department argued that the notice served on the respondent's wife was valid as the address mentioned for the respondent was always found closed. Citing a precedent, it was argued that serving notice on a family member was acceptable. The respondent relied on a judgment from the High Court of Allahabad regarding the power of the Appellate Tribunal to recall orders based on sufficient cause, emphasizing the need for proper service of notice.

Power of Appellate Tribunal to Recall Order:
The respondent's counsel cited a judgment from the jurisdictional High Court discussing the Tribunal's power to recall ex parte orders based on sufficient cause. The counsel emphasized the need for proper service of notice and the Tribunal's inherent jurisdiction to set aside orders passed ex parte when there was no proper notice or sufficient cause for non-appearance. Relying on this argument, the Tribunal recalled the order passed in the absence of the respondent and directed the case for a fresh hearing.

The Tribunal, considering the improper service of notice on the respondent's wife and the precedents cited regarding the Tribunal's power to recall orders, allowed the respondent's application. The decision highlighted the importance of proper service of notice and the Tribunal's inherent jurisdiction to set aside orders passed ex parte when there is no valid notice or sufficient cause for non-appearance. The case was directed for a fresh hearing, emphasizing the principles of natural justice and fair procedure in tax matters.