2010 (10) TMI 574 - HC - Income Tax

Search and seizure - assessment order under section 143(30 - carried out on the residential premises of one of the partners of the petitioner followed by survey action under section 133A of the Act at the business premises resulted in impounding of books of account under section 131 of the Act - After receipt of the copy of the order, the petitioner claims to have written a letter to the registry of the Tribunal seeking permission to inspect the documents so as to enable it to move miscellaneous application for recalling the order dated March 3, 2003 - The petitioner-assessee during the course of the inspection found that R.P.A.D. envelop was returned to the Tribunal with postal endorsement Not found at the given address. Returned to sender . After receipt of the aforesaid inspection the petitioner moved miscellaneous application to the Tribunal praying for recalling of the order dated March 3, 2003 for want of service of notice of hearing resulting in denial of opportunity of hearing. The said application was rejected by the Tribunal. request the President of the Tribunal either to frame rules or issue practice notes making it clear to all concerned that in the event of change of address there should be amendment to the cause title of the memo of appeal followed by amendment in column 10 of Form 36 with further reiteration that any correspondence in this behalf shall not be entertained by the Tribunal - If the procedure suggested is adopted, then the parties before the Tribunal would be compelled to amend their memo of appeal or cross-objections - the impugned orders are quashed and set aside. Proceedings are remitted back to the Tribunal for consideration afresh on the merits.

Summary

Issues:
Challenging order of Income-tax Appellate Tribunal under Article 226 of the Constitution of India for dismissal of appeal and rejection of miscellaneous application.

Detailed Analysis:

1. Factual Matrix and Assessment Order:
- Search and seizure action under Income-tax Act, 1961 resulted in impounding of books of account.
- Assessing Officer made significant additions to the income of the petitioner, leading to a substantial increase in the total income.
- Commissioner of Income-tax (Appeals) confirmed the assessment order in an exparte order.

2. Appeal to Tribunal and Allegations of Non-Service:
- Petitioner moved appeal to the Tribunal, claiming to have informed about the change of address.
- Tribunal's order dated March 3, 2003 dismissed the appeal as unadmitted due to non-appearance of the petitioner, allegedly due to non-service of notice.
- Petitioner moved a miscellaneous application seeking to recall the order, which was rejected by the Tribunal.

3. Submissions and Consideration:
- Petitioner argued breach of natural justice due to non-service of notice, supported by evidence of change of address intimation.
- Revenue's counsel questioned the validity of the address change process and the acknowledgment of receipt by the Tribunal.
- High Court found the Tribunal's order unsustainable and in breach of natural justice due to incorrect statement on service of notice.
- Emphasized the importance of proper procedure for address change to avoid ex parte hearings and subsequent challenges.

4. Court's Direction and Conclusion:
- Court quashed the impugned orders and remitted the proceedings back to the Tribunal for fresh consideration.
- Directed the Tribunal to adopt a formal procedure for address change in appeal memos to ensure proper notice service.
- Highlighted the need for compliance with the new procedure to prevent similar issues in the future.
- Petitions allowed with no costs, and the Prothonotary directed to inform relevant Tribunals about the judgment for necessary action.