2011 (9) TMI 223 - HC - Income Tax

Addition - undisclosed income - Assessing Officer made certain additions under Section 68 of the Act treating the same to be undisclosed income of the assessee - Tribunal has dismissed the application of the Assessee as time barred - Decided that petitioner was never served with the summons in appeal - If it is factually correct then it would be tantamount to passing the order in the absence of the petitioner without affording adequate opportunity to the petitioner to represent her case - Such an order would be nullity in the eyes of law - If petitioner was served with the summons then the order of the Tribunal dismissing the application as time barred would be correct - Held that cannot go into the issue in this writ petition - direction to the Tribunal to decide the application filed by the petitioner afresh

Summary

Issues:
Challenging ex-parte assessment under Section 143/144 (3) of the Income Tax Act, 1961.
Appeal before CIT(A) partly allowed, addition under Section 68 deleted, Revenue appealed.
ITAT allowed Revenue's appeal for further probe, petitioner unaware, filed application under Section 254(2) of the Act for recall after four years.
Tribunal dismissed the application as time-barred, petitioner's knowledge of summons disputed.

Analysis:
The petitioner challenged an ex-parte assessment under Section 143/144 (3) of the Income Tax Act, 1961, where the Assessing Officer treated certain amounts as undisclosed income under Section 68. The appeal before the CIT(A) resulted in the deletion of the addition under Section 68, but the Revenue appealed this decision. The ITAT allowed the Revenue's appeal for statistical purposes, directing further inquiry by the Assessing Officer. However, the petitioner claimed ignorance of the appeal and filed an application under Section 254(2) of the Act for recall after more than four years.

The Tribunal dismissed the petitioner's application as time-barred, stating it was filed four years after the Tribunal's orders. The High Court found the Tribunal's approach not in line with the law. It emphasized the importance of ensuring the petitioner's awareness and opportunity to represent their case, especially if they were not served with summons. The Court highlighted that passing an order in the absence of a party without proper notice would render the order null and void. The Court directed the Tribunal to reexamine the application to determine whether the petitioner was served with the summons, as this crucial fact could only be verified from the Tribunal's records.

In conclusion, the High Court set aside the Tribunal's order and instructed a fresh consideration of the petitioner's application. The Court clarified that if the Tribunal's records confirmed the service of notice to the petitioner, the application could be deemed time-barred. The writ petition was disposed of accordingly, ensuring a fair assessment of the petitioner's claims based on the principles of natural justice and procedural fairness.