Case Law Details
Hon’ble Supreme Court in the case of Para Laminates (P.) Ltd.‘s held that the Tribunal is entitled to exercise all incidental and ancillary powers which are reasonably necessary for performing the adjudicative functions. Applying the aforesaid principles, it clearly follows that it was obligatory on the part of the I.T. 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.
The Tribunal was therefore well within its powers to direct the I.T. 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 (supra), wherein it has been held that Tribunal has power identical to appellate court under C.P.C. We are of the view that 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. However, revenue is at liberty to get this order recalled to decide on merit in case assessee is traced by the revenue. This view is fortified by the decision of Ahmedabad Bench ‘A’ of the Tribunal in the case of Dy. CIT Vs. Aditya Organisers (P) Ltd. (2004) 91 ITD 342 (Ahd).
INCOME TAX APPELLATE TRIBUNAL, PUNE
I.T.A. No. 241/PN/2010: A.Y. 2001-02
I.T.O. Vs. Rachana Constructions and Engineers & Contractors
Date of pronouncement: 17-4-2012
ORDER
PER SHAILENDRA KUMAR YADAV, JM
This appeal by the revenue is directed against the order of the CIT-(A)-II Nasik dated 25-11-2009 for A.Y. 200 1-02 on various grounds.
2. The notices of hearing sent to the assessee at the address given in Form No. 36, were received back unserved. Therefore notices of hearing were given to the departmental representative for effective service on the respondent assessee. However on the dates of hearing no intimation was given by the ld. DR whether service of the notice had been effected on the assessee or not. Last such notice of hearing fixing the date of hearing as 17-4-2010 was handed over to the DR well in advance of the date of hearing. However when the appeal was called on for hearing, none put in an appearance on behalf of the respondent assessee. Shri Alok Mishra the learned DR who was present on behalf of the Revenue when asked about the service on the respondent-assessee was unable to say whether service had been effected or not. Department has shown total apathy in the matter of service of notices of hearing. Accordingly the appeal of the Revenue could not be heard on merit in absence of service of notice upon assessee. It shows that revenue has not provided proper address of assessee. Opportunity of hearing is essential before adjudicating appeal for which service of notice is condition precedent. Under section 254(1) the Tribunal is required to give both the parties to the appeal an opportunity of being heard. What is engrained in section 254(1) is not an empty formality but a valuable right available to the parties in appeal before the Tribunal. Since in the instant case notice of hearing could not be effected on the respondent-assessee at the address given by the Revenue in the Memorandum of Appeal, and the Departmental Representative has not got the notice service in spite of sufficient opportunity, it has not been possible to conduct the adjudication proceedings as per the requirements of section 254(1). When the Bench confronted the learned DR as to why the Revenue’s appeal may not be dismissed for apathy in service of notices on the respondent-assessee, the learned DR had no answer.
3. In an appeal filed by the revenue expeditious disposal of the tax dispute would necessarily be in the best interest of the revenue for which correct address of assessee is necessary, so that matter may be decided after providing opportunity of hearing.
4. Apart from the above, we feel that it has been the established practice and accepted procedure that in case notices of hearing cannot be served on the respondent assessees in revenue’s appeals, such notices are got served through Income-tax authorities. Such practice and procedure has been long established and followed in the interest of expeditious adjudication of tax disputes.
5. Apart from the consideration of expediency and equity as referred herein above, we are of the considered view that the practice of getting the service effected on the respondent-assessee in a revenue’s appeal wherein notices of hearing could not be served on the assessee by post is fully in conformity with the judicial powers and jurisdiction of the Tribunal and does not in any manner run contrary to any provisions of the Statute. Powers conferred by an enabling statute include not only such as are expressly granted but also, by implication, all powers which are reasonably necessary for the accomplishment of the object intended to be secured. The doctrine of incidental or implied powers of the appellate authority has been enunciated and endorsed by the Hon’ble Supreme Court in the case of ITO v. M.K. Mohammed Kunhi [1969] 71 ITR 815. It is a well established rule of legal jurisprudence that where an Act confers a jurisdiction, it impliedly grants the powers of doing all such acts, or employing such means, as are essentially necessary to its execution.
6. It is well settled that where a substantive power is conferred upon a Court or Tribunal, all incidental and ancillary powers necessary for an effective exercise of the substantive power have to be inferred – Chief Executive Officer and Vice-Chairman, Gujarat Maritime Board v. Haji Daud Haji Harun Abu [1996] 11 SCC 23. 7. In the context of the jurisdiction and powers of the Customs, Excise and Gold (Control) Appellate Tribunal, the Supreme Court has, in Union of India v. Paras Laminates (P.) Ltd. [1990] 186 ITR 722, 726, observed:
“There is no doubt that the Tribunal functions as a Court within the limits of its jurisdiction. It has all the powers conferred expressly by the statute. Furthermore, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers. Certain powers are recognized as incidental and ancillary, not because they are inherent in the Tribunal, or because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised. The powers of the Tribunal are no doubt limited. Its area of jurisdiction is clearly defined but, within the bounds of its jurisdiction, it has all the powers expressly and impliedly granted. The implied grant is, of course, limited by the express grant and, therefore, it can only be of such power as are truly incidental and ancillary for doing all such acts or employing all such means as are reasonably necessary to make the grant effective.”
8. Reference may further be made to the decision of Hon’ble Supreme Court in the case of Para Laminates (P.) Ltd.’s case (supra) wherein a similar proposition has been enunciated by the Apex Court and it has been held that the Tribunal is entitled to exercise all incidental and ancillary powers which are reasonably necessary for performing the adjudicative functions. Applying the aforesaid principles, it clearly follows that it was obligatory on the part of the I.T. 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. The Tribunal was therefore well within its powers to direct the I.T. 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 (supra), wherein it has been held that Tribunal has power identical to appellate court under C.P.C. We are of the view that 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. However, revenue is at liberty to get this order recalled to decide on merit in case assessee is traced by the revenue. This view is fortified by the decision of Ahmedabad Bench ‘A’ of the Tribunal in the case of Dy. CIT Vs. Aditya Organisers (P) Ltd. (2004) 91 ITD 342 (Ahd).
9. In the result, the appeal of the revenue is dismissed.
Decision pronounced in the open court at the conclusion of the hearing.
Pune dated the 25th April 2012
