1997 (9) TMI 148 - AT - Income Tax

Summary

Issues Involved:
1. Rejection of previous miscellaneous applications.
2. Non-receipt of hearing notice by the assessee.
3. Distinction between review and recall of the Tribunal's order.
4. Tribunal's obligation to provide an opportunity of being heard.
5. Tribunal's power under sections 254(1) and 254(2) of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Rejection of Previous Miscellaneous Applications:
The assessee's previous miscellaneous applications were rejected by the Tribunal. The first application (M.A. No. 67/Cal/96) was rejected on the ground that the notice was received by an authorized person, which was a mistaken assumption. The second application was rejected without hearing the assessee, based on the Tribunal's belief that it could not review its order. The Tribunal followed the decision in CIT v. Gokul Chand Agarwal, which was not applicable as the application was for recalling the ex parte order, not for review.

2. Non-receipt of Hearing Notice by the Assessee:
The assessee contended that the notice of hearing was not received by an authorized representative. The recipient, Shri Lekhraj Pandey, was not an employee of the assessee but of M/s. Estate C.L. Burman. Evidence such as attendance and salary registers, and a certificate from the employer, supported this claim. The Tribunal had originally rejected the application based on the mistaken assumption that Shri Lekhraj was an authorized person.

3. Distinction Between Review and Recall of the Tribunal's Order:
The assessee's counsel argued that the application was for recalling the ex parte order, not for reviewing the Tribunal's order. The Tribunal has the power to set aside an ex parte order to provide an opportunity of being heard, which is distinct from the power of review. This distinction is supported by the Kerala High Court's decision in CIT v. ITAT and Joseph Michael & Bros. v. ITAT.

4. Tribunal's Obligation to Provide an Opportunity of Being Heard:
The Tribunal is required to provide a reasonable opportunity of being heard to the assessee under section 254(1) of the Income-tax Act. The ex parte order was passed without giving such an opportunity, which was a violation of natural justice. The Tribunal's power to set aside an ex parte order is inherent and can be exercised to ensure that justice is served.

5. Tribunal's Power Under Sections 254(1) and 254(2) of the Income-tax Act:
The Tribunal has the power under section 254(1) to provide a reasonable opportunity of being heard and to set aside an ex parte order. Under section 254(2), the Tribunal can rectify any mistake apparent from the record. The Tribunal's mistaken assumption that the notice was served on an authorized person was a mistake apparent from the record. The Tribunal's failure to provide its own reasoning and findings in the ex parte order was also a mistake of law.

Conclusion:
The Tribunal concluded that the assessee had sufficient cause for non-appearance and that the ex parte order was based on mistaken assumptions. The Tribunal set aside the ex parte order dated 10-9-1996 and restored the appeal for fresh hearing, directing the registry to fix the appeal for a new hearing. The miscellaneous application was allowed, ensuring that the principles of natural justice were upheld.