ITO wd-6[3], Pune V. M/s Sanarch Sales & Services P.Ltd, Pune

ITA 1851/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76040 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 20-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1851/PN/2012 (ASST. YEAR: 2005-06) ACIT, CIRCLE-6, PUNE APPELLANT VS. M/S. SANARCH SALES AND SERVICES PVT. LTD., 524/1, POOJA BUILDING, SHIVAJI NAGAR, PUNE - 411005 PAN: AAHCS9237R RESPONDENT APPELLANT BY : SHRI P.L. PATHADE RESPONDENT BY : NONE DATE OF HEARING : 15-01-2014 DATE OF ORDER : 15-01-2014 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (A)-III [(I N SHORT CIT (A)-III], PUNE, FOR A.Y. 2005-06. 2. THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE A T THE ADDRESS GIVEN IN FORM NO.36 THROUGH THE DEPARTMENTA L REPRESENTATIVE FOR EFFECTIVE SERVICE ON THE RESPOND ENT ASSESSEE. HOWEVER ON THE DATE OF HEARING NO INTIMATION WAS GI VEN BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WHETHER SERVICE OF THE NOTICE HAD BEEN EFFECTED ON THE ASSESSEE OR NOT. L AST SUCH 2 NOTICE OF HEARING FIXING THE DATE OF HEARING AS 28- 10-2013 WAS HANDED OVER TO THE DEPARTMENTAL REPRESENTATIVE WELL IN ADVANCE OF THE DATE OF HEARING. HOWEVER WHEN THE A PPEAL WAS CALLED ON FOR HEARING, NONE PUT IN AN APPEARANCE ON BEHALF OF THE RESPONDENT ASSESSEE. SHRI P.L. PATHADE THE LEA RNED DEPARTMENTAL REPRESENTATIVE WHO WAS PRESENT ON BEHA LF OF THE REVENUE WHEN ASKED ABOUT THE SERVICE ON THE RESPOND ENT- ASSESSEE, WAS UNABLE TO SAY WHETHER SERVICE HAD BE EN EFFECTED OR NOT. DEPARTMENT HAS SHOWN TOTAL APATHY IN THE M ATTER OF SERVICE OF NOTICES OF HEARING. ACCORDINGLY THE APP EAL OF THE REVENUE COULD NOT BE HEARD ON MERIT IN ABSENCE OF P ROPER SERVICE OF NOTICE UPON ASSESSEE. IT SHOWS THAT REV ENUE HAS NOT PROVIDED PROPER ADDRESS OF THE ASSESSEE. OPPORTUNIT Y OF HEARING IS ESSENTIAL BEFORE ADJUDICATING APPEAL FOR WHICH SERVICE OF NOTICE IS A CONDITION PRECEDENT. UNDER SECTION 254(1) THE TRIBUNAL IS REQUIRED TO GIVE BOTH THE PARTIES T O THE APPEAL AN OPPORTUNITY OF BEING HEARD. WHAT IS ENGRAINED IN SECTION 254(1) IS NOT AN EMPTY FORMALITY BUT A VALUABLE RIG HT AVAILABLE TO THE PARTIES IN APPEAL BEFORE THE TRIBUNAL. SINCE IN THE INSTANT CASE NOTICE OF HEARING COULD NOT BE EFFECTE D ON THE RESPONDENT-ASSESSEE AT THE ADDRESS GIVEN BY THE REV ENUE IN THE MEMORANDUM OF APPEAL, AND THE DEPARTMENTAL REPRESENTATIVE HAS NOT GOT THE NOTICE SERVED I N SPITE OF SUFFICIENT OPPORTUNITY, IT HAS NOT BEEN POSSIBLE TO CONDUCT THE ADJUDICATION PROCEEDINGS AS PER THE REQUIREMENTS OF SECTION 3 254(1). WHEN THE BENCH CONFRONTED THE LEARNED DEPAR TMENTAL REPRESENTATIVE AS TO WHY THE REVENUE'S APPEAL MAY N OT BE DISMISSED FOR APATHY IN SERVICE OF NOTICE ON THE RE SPONDENT- ASSESSEE, THE LEARNED DEPARTMENTAL REPRESENTATIVE H AD NO ANSWER. 3. IN AN APPEAL FILED BY THE REVENUE EXPEDITIOUS DI SPOSAL OF THE TAX DISPUTE WOULD NECESSARILY BE IN THE BEST IN TEREST OF THE REVENUE FOR WHICH CORRECT ADDRESS OF ASSESSEE IS NE CESSARY, SO THAT MATTER MAY BE DECIDED AFTER PROVIDING OPPORTUN ITY OF HEARING. 4. APART FROM THE ABOVE, WE FEEL THAT IT HAS BEEN T HE ESTABLISHED PRACTICE AND ACCEPTED PROCEDURE THAT IN CASE NOTICES OF HEARING CANNOT BE SERVED ON THE RESPONDE NT ASSESSEE IN REVENUE'S APPEAL, SUCH NOTICE HAS GOT SERVED THR OUGH INCOME-TAX AUTHORITIES. SUCH PRACTICE AND PROCEDUR E HAS BEEN LONG ESTABLISHED AND FOLLOWED IN THE INTEREST OF EX PEDITIOUS ADJUDICATION OF TAX DISPUTES. 5. APART FROM THE CONSIDERATION OF EXPEDIENCY AND E QUITY AS REFERRED HEREIN ABOVE, WE ARE OF THE CONSIDERED VIE W THAT THE PRACTICE OF GETTING THE SERVICE EFFECTED ON THE RES PONDENT- ASSESSEE IN A REVENUE'S APPEAL WHEREIN NOTICE OF HE ARING COULD NOT BE SERVED ON THE ASSESSEE BY POST IS FULLY IN C ONFORMITY WITH THE JUDICIAL POWERS AND JURISDICTION OF THE TR IBUNAL AND DOES NOT IN ANY MANNER RUN CONTRARY TO ANY PROVISIO NS OF THE 4 STATUTE. POWERS CONFERRED BY AN ENABLING STATUTE I NCLUDE NOT ONLY SUCH AS ARE EXPRESSLY GRANTED BUT ALSO, BY IMP LICATION, 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 APP ELLATE AUTHORITY HAVE BEEN ENUNCIATED AND ENDORSED BY THE HON'BLE SUPREME COURT IN THE CASE OF ITO V. M.K. MOHAMMED K UNHI [1969] 71 ITR 815. IT IS A WELL ESTABLISHED RULE OF LEGAL JURISPRUDENCE THAT WHERE AN ACT CONFERS A JURISDICT ION, IT IMPLIEDLY GRANTS THE POWERS OF DOING ALL SUCH ACTS, OR EMPLOYING SUCH MEANS, AS ARE ESSENTIALLY NECESSARY TO ITS EXE CUTION. 6. IT IS WELL SETTLED THAT WHERE A SUBSTANTIVE POWE R IS CONFERRED UPON A COURT OR TRIBUNAL, ALL INCIDENTAL AND ANCILLARY POWERS NECESSARY FOR AN EFFECTIVE EXERCISE OF THE S UBSTANTIVE 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 TRIBUN AL, THE SUPREME COURT HAS, IN UNION OF INDIA V. PARAS LAMIN ATES (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 T HE POWERS CONFERRED EXPRESSLY BY THE STATUTE. FURTHERMORE, BE ING A JUDICIAL BODY, IT HAS ALL THOSE INCIDENTAL AND ANCI LLARY POWERS WHICH ARE NECESSARY TO MAKE FULLY EFFECTIVE THE EXP RESS GRANT OF STATUTORY POWERS. CERTAIN POWERS ARE RECOGNIZED AS 5 INCIDENTAL AND ANCILLARY, NOT BECAUSE THEY ARE INHE RENT IN THE TRIBUNAL, OR BECAUSE ITS JURISDICTION IS PLENAR Y, BUT BECAUSE IT IS THE LEGISLATIVE INTENT THAT THE POWER WHICH IS EXPRESSLY GRANTED IN THE ASSIGNED FIELD OF JURISDIC TION IS EFFICACIOUSLY AND MEANINGFULLY EXERCISED. THE POWER S OF THE TRIBUNAL ARE NO DOUBT LIMITED. ITS AREA OF JURISDIC TION IS CLEARLY DEFINED BUT, WITHIN THE BOUNDS OF ITS JURIS DICTION, 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 TRUL Y 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.) LT D.'S CASE (SUPRA) WHEREIN A SIMILAR PROPOSITION HAS BEEN ENUN CIATED BY THE APEX COURT AND IT HAS BEEN HELD THAT THE TRIBUN AL IS ENTITLED TO EXERCISE ALL INCIDENTAL AND ANCILLARY P OWERS WHICH ARE REASONABLY NECESSARY FOR PERFORMING THE ADJUDIC ATIVE FUNCTIONS. APPLYING THE AFORESAID PRINCIPLES, IT CL EARLY FOLLOWS THAT IT WAS OBLIGATORY ON THE PART OF THE INCOME-TA X AUTHORITY TO EFFECT SERVICE OF NOTICE OF HEARING ON THE ASSESSEE SINCE THE SERVICE COULD NOT BE EFFECTED BY POST AT THE ADDRES S GIVEN BY THE REVENUE IN THE MEMORANDUM OF APPEAL. THE TRIBUNAL WAS THEREFORE WELL WITHIN ITS POWERS TO DIRECT THE INCO ME-TAX DEPARTMENT TO EFFECT SERVICE ON THE ASSESSEE PARTIC ULARLY SINCE THE DEPARTMENT, AS AN EXECUTIVE ORGANIZATION IS WEL L EQUIPPED WITH THE REQUISITE STAFF STRENGTH OF NOTICE SERVER, INCOME-TAX INSPECTOR ETC. FOR THE PURPOSE OF SERVING VARIOUS S TATUTORY NOTICES ON THE TAX PAYER. SINCE THE REVENUE HAS SHO WN APATHY WITH REGARD FOR SERVING THE NOTICES OF HEARING ON T HE RESPONDENT 6 ASSESSEE REVENUE HAS ALSO NOT MADE ANY REQUEST TO G ET 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 PROVI SIONS OF THE CIVIL PROCEDURE CODE WHERE INCOME-TAX ACT AND RULE THEREUNDER ARE NOT ABLE TO MEET PARTICULAR SITUATIO N. THIS VIEW IS FORTIFIED BY RATIO LAID DOWN IN THE CASE OF M.K. MOHAMMED KUNHI (SUPRA), WHEREIN IT HAS BEEN HELD THAT TRIBUN AL HAS POWER IDENTICAL TO APPELLATE COURT UNDER C.P.C. WE ARE OF THE VIEW THAT ONCE REVENUE IS NOT ABLE TO GET EXACT ADD RESS OF ASSESSEE, HOW IT WILL FOLLOW THE SAME, IN CASE MATT ER IS DECIDED IN FAVOUR OF REVENUE. IN THE FACTS AND CIRCUMSTANCE S OF THE CASE, WE HAVE NO ALTERNATIVE BUT TO DISMISS THE APP EAL. HOWEVER, REVENUE IS AT LIBERTY TO GET THIS ORDER RE CALLED TO DECIDE ON MERIT IN CASE ASSESSEE IS TRACED BY THE R EVENUE WITHIN REASONABLE TIME. THIS VIEW IS FORTIFIED BY THE DECISION OF AHMEDABAD BENCH A OF THE TRIBUNAL IN THE CASE OF DY. CIT VS. ADITYA ORGANIZERS (P) LTD. (2004) 91 ITD 342 (AHD). 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 15 TH DAY OF JANUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 15 TH JANUARY, 2014 GCVSR 7 COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) CIT(A)-III, PUNE 4) CIT-III, PUNE 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE