High Court Of Bombay
Jagjivandas Nandlal & Co. Vs. ITAT, Mumbai Bench ‘G’
Assessment Year : 1993-94
Section : 282
V.C. Daga And R.M. Savant, JJ.
Writ Petition Nos. 1805 And 1806 Of 2010
October 18, 2010
Vijay Daga, J. – Rule, returnable forthwith.
Mr. Gupta waives service for the respondents. Both petitions are taken up for hearing by consent of parties.
2. These petitions, filed under Article 226 of the Constitution of India, are directed against the order dated 3-3-2010 passed by the Income-tax Appellate Tribunal, Mumbai (“Tribunal” for short) dismissing appeal filed by the petitioner together with order dated 25-3-2010 whereby the miscellaneous application filed by the petitioner was rejected. The petitioner has prayed for direction to the Tribunal to grant fresh hearing on merits. Since the issues involved in both the petitions are interlinked, they are being disposed of by this common judgment.
3. The factual matrix giving rise to the present petitions is as under :
The search and seizer action under section 132(1) of the Income-tax Act, 1961 (“Act” for short) 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. The petitioner had filed return of income showing total loss of Rs. 3,35,997 for the assessment year 1993-94 enclosed with Profit and Loss Account, Balance Sheet with necessary annexures.
4. The Assessing Officer assessed the income of the petitioner and passed assessment order under section 143(3) of the Act making addition of Rs. 55,34,140. He added estimated profit of Rs. 16,25,981 together with loan transactions and interest, details of which are not necessary for the view taken.
5. Aggrieved by the aforesaid order of assessment, the petitioner-assessee filed appeal before the Commissioner of Income-tax (Appeals), who was pleased to passed an ex parte order dated 18-12-1996 confirming the assessment order.
6. Aggrieved by the aforesaid order, the assessee carried appeal to the Tribunal on 11-2-1997.
7. It appears that during the pendency of the aforesaid appeal, the petitioner-assessee vide its letter dated 17-3-2004 claims to have informed the new address to the Assistant Registrar of the Tribunal with further letters dated 7-6-2007; 20-11-2008 and 19-12-2008 enquiring about status of the appeal. According to the petitioner-assessee the certified copy of the Tribunal’s order dated 3-3-2003 was handed over to the petitioner on 9-1-2009. The order reads as under :
“The Notice fixing the hearing of the above appeals on 26-2-2003, sent by R.P.A.D. at the address indicated by the assessee in column No. 10 of Form No. 36 has not been returned by the postal authorities. However, at the time of hearing none appeared on behalf of the assessee, nor any request for adjournment was also filed. In these circumstances, following the decision of the Delhi Bench of the Tribunal in the case of Multiplan India (P.) Ltd. ( 38 ITD 320), we dismiss these appeals as unadmitted.” [Emphasis supplied]
8. 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 3-3-2003. Accordingly, inspection was given to the petitioner. 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 given address. Returned to Sender”. After receipt of the aforesaid inspection petitioner moved miscellaneous application to the Tribunal praying for recalling of the order dated 3-3-2003 for want of service of notice of hearing resulting in denial of opportunity of hearing. The said application was rejected by the Tribunal by an order dated 25-3-2010. The said orders are subject-matter of challenge in this petitions.
9. The learned counsel appearing for the petitioner submits that the change of address was intimated to the registry of the Tribunal vide letter dated 17-3-2004 followed by series of letters making enquiry about the status of the appeal. He, thus, submits that it is not a case wherein the Tribunal was not aware of the address of the petitioner-assessee. He, thus, submits that it was obligatory on the part of the Tribunal to send the notice of hearing to the petitioner on the changed address. The photocopies of the letters carrying initials of the person alleged to have received letters in the registry of the Tribunal are produced on record in support of the submission made. Learned counsel for the petitioner, thus, submits that the impugned orders are in breach of principles of natural justice as such liable to be quashed and set aside and that the matter needs to be remitted back to the Tribunal for consideration afresh.
10. Per contra, learned counsel for the Revenue sought to create some doubt on the letters alleged to have been written and delivered to the registry of the Tribunal. He submits that from the alleged acknowledgements, which does not carry full signature of the person receiving letters, it is not possible to make statement as to whether or not those letters were really received by the Tribunal. He further submits that the record being old, it is not possible to confirm the receipt of those letters. He further submits that it was obligatory on the part of the petitioner- assessee to amend the cause title of the appeal memo so as to indicate the change of address. In his submission, most of the time it happens that the delivered letters do not get tagged to the appeal record. He, thus, submits that the method adopted by the petitioner-assessee of writing letters and intimating the change of address is not a procedure recognised by the Rules governing the appeal procedure. He, thus, submits that the petitions are without any merits and are liable to be dismissed.
11. Having heard rival contentions canvassed by the advocates appearing for the parties, without going into the issue relating to the correspondence between the petitioner-assessee and the Tribunal leading to change of address, these petitions can be decided on the admitted facts available on record. The impugned order dated 3-3-2003 specifically mentions that the notice of hearing of appeal informing date of hearing as 26-2-2003 was sent to the appellant/petitioner herein by R.P.A.D. at the address indicated by the petitioner-assessee in column 10 of Form No. 36 and had not been returned by the postal authorities. The said statement made in the order impugned is factually wrong and incorrect in view of the fact that the notice intimating date of hearing sent by R.P.A.D. was, admittedly, returned back to the Tribunal by the postal authorities with postal endorsement “Not found at given address. Returned to Sender”. It is, thus, clear that the notice sent by R.P.A.D. was not served. It was returned for want of correct address. The Tribunal, thus, could not have treated the service by R.P.A.D. as good service. Under these circumstances, the impugned order is unsustainable and is liable to be quashed and set aside since it is clearly in breach of principles of natural justice. It was also expected on the part of the Tribunal either to issue fresh notice or at least to send an additional copy of the notice to the advocate appearing for the assessee. No such notices appear to have been sent. Consequently, the petitions deserve to succeed, since the orders are in breach of principles of natural justice.
12. Having said so, we may place it on record that in number of cases it has come to our notice that the parties are entering into correspondence with the registry of the Tribunal to intimate the change of address without amending the address given in column 10 of Form No. 36 or in the cause title of the appeal memo. It is also noticed that in most of the cases change of address is not taken on record. Sometime the letter written by the assessee is not attended by the registry of the Tribunal. With the result, the assessee does not get notice of hearing. The matter is heard behind the back of the assessee or his advocate which, ultimately, leads to unsustainable order. It generates litigation either in the same Court by way of rectification application or in the higher Court. In order to avoid this situation, it is desirable to direct the appellant or parties to the appeal to amend cause title of the appeal memo in the event of change of address followed by amendment in column 10 of Form No. 36; instead of permitting the parties to enter into the correspondence with the registry of the Tribunal.
13. We, in the above premise, request the President of the Tribunal either to frame rule or issue practice note 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 No. 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 as the case may be followed by amendment in Column No. 10 of Form No. 36 so that it will clearly indicate to the Tribunal the correct address of the appellant so as to enable it to serve the notice of hearing on the assessee at its given address. This will avoid ex parte hearing and consequent challenge to the order of the Tribunal on the ground of breach of principles of natural justice for want of notice. We hope the Tribunal shall take note of anxiety expressed by this Court and inform this Court the compliance of this order.
14. In the result, impugned orders are quashed and set aside. Proceedings are remitted back to the Tribunal for consideration afresh on merits. Petitioner undertakes to appear before the Tribunal on 8-11-2010. Both petitions are allowed. Rule in both petitions is made absolute in terms of this order with no order as to costs.
15. Prothonotary and Senior Master is directed to send copy of this judgment to the President, Income-tax Appellate Tribunal. The copy of this judgment should also be forwarded to the President of Central Excise, Customs and Service Tax Appellate Tribunal since the problem noticed by this Court is common to both the Tribunals.
[Citation : 333 ITR 374]