2014 (8) TMI 1216 - AT - Income Tax

Validity of Rectification u/s 254 - Non service of notice of hearing on the respondent-assessee - denial of natural justice - no opportunity of being heard - HELD THAT - It was obligatory on the part of the Income-tax authority to effect service of notice of hearing on the assessee since the service could not be effected by post at the address given by the revenue in the memorandum of appeal. Tribunal was therefore well within its powers to direct the Income-tax department to effect service on the assessee particularly since the department, as an executive organization is well equipped with the requisite staff strength of Notice Server, Income-tax Inspector etc. for the purpose of serving various statutory notices on the tax payer. Since the revenue has shown apathy with regard for serving the notices of hearing on the respondent assessee Revenue has also not made any request to get the notice served by alternate way i.e., by way of publication etc. which is laid down in rule 20 of CPC. Tribunal can take help on procedural aspect as laid down under relevant provisions of the Civil Procedure Code where Income-tax Act and rule thereunder are not able to meet particular situation. This view is fortified by ratio laid down in the case of M.K. Mohammed Kunhi 1968 (9) TMI 5 - SUPREME COURT wherein it has been held that Tribunal has power identical to appellate court under C.P.C.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. In the facts and circumstances of the case, we have no alternative but to dismiss the appeal.

Summary

Issues:
- Proper service of notice for hearing in appeals filed by Revenue
- Jurisdiction and powers of the Tribunal regarding service of notice
- Dismissal of appeal due to failure in notice service

Analysis:
The judgment pertains to appeals filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) for multiple assessment years. The primary issue addressed is the proper service of notice for hearing on the respondent assessee. The Tribunal noted that despite sending notices through the Departmental Representative, the service was not effectively carried out. The absence of the respondent assessee during the hearing due to lack of proper notice was deemed crucial, as the opportunity of being heard is a fundamental right in appeal proceedings as per section 254(1) of the Income Tax Act.

The Tribunal emphasized the importance of providing the correct address of the assessee for expeditious resolution of tax disputes. It was observed that in cases where notices cannot be served directly on the respondent assessee, the practice of serving notices through Income-tax authorities has been established to ensure fair adjudication. The judgment cited legal precedents to support the Tribunal's authority to direct the Income-tax department to effect service on the assessee when necessary, as part of its incidental and ancillary powers essential for effective exercise of its substantive power.

Furthermore, the judgment highlighted the Tribunal's ability to seek procedural guidance from the Civil Procedure Code when the Income-tax Act and its rules are insufficient to address specific situations, reinforcing the Tribunal's broad powers in ensuring fair proceedings. Ultimately, due to the Revenue's failure to provide the exact address of the assessee and the lack of effort in alternative service methods, the appeals were dismissed. However, the Tribunal granted the Revenue the opportunity to recall the order if the assessee is located within a reasonable time, citing a similar decision by the Ahmedabad Bench of the Tribunal for reference.

In conclusion, the judgment underscores the significance of proper notice service in maintaining the integrity of appeal proceedings, the Tribunal's authority to ensure fair hearings through alternative service methods, and the dismissal of appeals in cases of inadequate notice service.