2012 (5) TMI 40 - AT - Income Tax

Notice of hearing sent to the assessee at the address given in Form No. 36 returned back unserved - no intimation given by departmental representative for effective service on the respondent assessee - Held that - Since notice of hearing was handed over to the DR well in advance of the date of hearing and was unable to say whether service had been effected or not the appeal of the Revenue could not be heard on merit in absence of service of notice upon assessee - revenue has not provided proper address of assessee - opportunity of hearing is essential before adjudicating appeal for which service of notice is condition precedent - once revenue is not able to get exact address of assessee, how it will follow the same, in case matter is decided in favour of revenue against revenue.

Summary

Issues:
1. Service of notice on the respondent assessee for the appeal filed by the revenue.
2. Jurisdiction and powers of the Tribunal regarding service of notices in revenue's appeals.

Analysis:
1. The appeal by the revenue was directed against the order of the CIT-(A)-II Nasik for A.Y. 2001-02. The notices of hearing sent to the assessee were returned unserved, prompting the department to provide notices to the departmental representative for effective service. However, during the hearings, the department failed to confirm if the notice had been served on the assessee. The Tribunal emphasized the importance of providing an opportunity for a hearing before adjudicating an appeal, as mandated by section 254(1). The Tribunal found that due to the failure in serving the notice on the respondent assessee, the appeal could not be heard on its merits. The Tribunal highlighted the necessity of proper address details for the assessee to ensure a fair hearing and proper adjudication of the appeal.

2. The Tribunal discussed the practice of getting the notice served through Income-tax authorities when notices could not be served on the respondent assessee in revenue's appeals. It was noted that this practice aligns with the judicial powers and jurisdiction of the Tribunal and does not contravene any statutory provisions. The Tribunal referred to legal principles stating that when a substantive power is granted to a Court or Tribunal, all necessary incidental and ancillary powers must be inferred for effective exercise of the substantive power. The Tribunal cited relevant case laws to support the view that the Tribunal has the authority to direct the Income-tax department to effect service on the assessee when necessary, especially in cases where the revenue fails to serve notices properly. The Tribunal highlighted the duty of the revenue to make efforts to serve notices appropriately and the Tribunal's power to dismiss an appeal if the revenue fails to do so. The decision to dismiss the appeal was made with the possibility of reconsideration if the assessee is located by the revenue, as per relevant legal precedents.

In conclusion, the judgment emphasized the importance of proper service of notices on the assessee in revenue's appeals to ensure a fair hearing and adjudication process. It highlighted the Tribunal's authority to direct the Income-tax department to effect service on the assessee when necessary and the consequences of failing to do so. The decision to dismiss the appeal was based on the revenue's failure to serve notices properly, with the option for reconsideration if the assessee is located.