1950 (9) TMI 17 - HC - Income Tax

Summary

Issues:
1. Validity of service by post on the appellant as per Section 63 of the Income-tax Act.
2. Legality of dismissing the appeal for default based on the notice issued by the Tribunal.

Analysis:

Issue 1: Validity of service by post on the appellant as per Section 63 of the Income-tax Act:
The case involved a firm appealing before the Income-tax Appellate Tribunal, where a notice was sent by registered post to the firm's address, received by an employee who endorsed it on behalf of the firm. The question was whether this constituted valid service as per Section 63 of the Income-tax Act. The Act allows service by post, and the definition of "person" under the General Clauses Act includes a firm. The service on the firm by post was deemed sufficient, and the key consideration was whether there was proper service on the firm. The presumption of due service arose from sending the notice by registered post, which was rebuttable. The Tribunal rejected an affidavit claiming non-receipt of the notice, and the court held that the service was valid as the notice was properly addressed and delivered.

Issue 2: Legality of dismissing the appeal for default based on the notice issued by the Tribunal:
The notice issued by the Tribunal stated that the appeal would be "heard and determined in the absence of the assessee." The Tribunal dismissed the appeal for default when the assessee did not appear. The question was whether the Tribunal had the authority to dismiss the appeal based on this notice. The court held that the word "determination" in the notice implied a decision on the merits of the case, not just a dismissal for default. As such, the Tribunal erred in dismissing the appeal for default, as the notice did not clearly indicate that non-appearance would result in dismissal. The court suggested sending the case back to the Tribunal for further reference, but both parties agreed to formulate the question for decision.

In conclusion, the court found that there was valid service by post on the appellant as per Section 63 of the Income-tax Act. However, the Tribunal erred in dismissing the appeal for default based on the notice issued, as it did not clearly convey that non-appearance would lead to dismissal. The dismissal for default was deemed inappropriate, and the case was to be decided on its merits rather than dismissed.