2004 (10) TMI 287 - AT - Income Tax

Summary

Issues:
1. Service of notice for hearing
2. Recall of Tribunal's ex parte order
3. Validity of service by affixation
4. Application of ITAT Rules for setting aside ex parte orders

Service of Notice for Hearing:
The Revenue sought to recall the Tribunal's order due to non-appearance of the assessee during the appeal hearing. The assessee claimed they never received the notice of hearing as the liaison office was closed. The Tribunal found the assessee's version credible as the Department did not reply to or rebut the submissions made. The change in address was corroborated, and the Tribunal held that the assessee was prevented from attending the hearing due to lack of service.

Recall of Tribunal's Ex Parte Order:
The Tribunal considered the powers under ITAT Rules to recall ex parte orders. The assessee's counsel argued for a recall based on non-receipt of the hearing notice, preventing participation in the appeal hearing. The Tribunal, after reviewing the unrebutted affidavit and documents, found merit in the assessee's contentions. Consequently, the Tribunal allowed the prayer for recall, setting aside the ex parte order and restoring the appeal for a fresh hearing.

Validity of Service by Affixation:
The Tribunal scrutinized the service by affixation, finding discrepancies in the process followed. Citing legal precedents, the Tribunal emphasized the need for proper compliance with rules governing service by affixation. Noting the lack of essential details in the service report, the Tribunal concluded that the service by affixation was invalid, further supporting the assessee's arguments.

Application of ITAT Rules for Setting Aside Ex Parte Orders:
The Tribunal invoked ITAT Rule 25, allowing for setting aside ex parte orders if the appellant proves sufficient cause for non-appearance. Referring to a relevant High Court judgment, the Tribunal acknowledged the need to provide a fair opportunity for the assessee to present their case. Considering the circumstances and material on record, the Tribunal found reasonable cause for the assessee's non-appearance, leading to the allowance of the miscellaneous application and the restoration of the appeal.

In conclusion, the Tribunal granted the assessee's application, recalling the previous order and restoring the appeal for a fresh hearing, emphasizing the importance of fair opportunity and compliance with legal procedures in judicial proceedings.