ITAT order set aside for improper notice service under Rule 19 - communication incomplete without addressee receipt

The HC set aside ITAT's order due to improper notice service to the appellant. The court held that mere posting of hearing dates in cause lists is insufficient communication under Rule 19 of ITAT Rules, 1963. Proper notice must be served to parties regarding miscellaneous petition hearings after appeal disposal. The tribunal failed to send petition copy to the petitioner as required under Section 254(2) of Income Tax Act, 1961. The court emphasized that communication is complete only when received by the addressee, not merely dispatched. Case remitted to ITAT for fresh hearing after proper notice to petitioner.

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Issues Involved:
1. Validity of the Tribunal's order dated 18.05.2022 under Section 254(2) of the Income Tax Act, 1961.
2. Procedural compliance regarding notice issuance to the petitioner.
3. Merits of the Tribunal's decision to recall its earlier order dated 23.12.2020.

Summary:

Issue 1: Validity of the Tribunal's order dated 18.05.2022 under Section 254(2) of the Income Tax Act, 1961

The petitioner challenged the Tribunal's order dated 18.05.2022, which was passed under Section 254(2) of the Income Tax Act, 1961. The Tribunal had recalled its earlier order dated 23.12.2020, citing a "wrong application of law" and directed the registry to fix the appeal for a fresh hearing before a regular bench. The petitioner contended that the order dated 18.05.2022 was passed without issuing any notice to the petitioner, thus necessitating its annulment and remittance back to the Tribunal for a fresh order.

Issue 2: Procedural compliance regarding notice issuance to the petitioner

The petitioner argued that the Tribunal did not follow the procedure under Rule 19 of the Income Tax (Appellate Tribunal) Rules, 1963, as the petitioner was unaware of the listing of the miscellaneous petition in M.P. No. 47/CHNY/2021. The Tribunal's order dated 18.05.2022 was passed without the petitioner receiving any notice. The learned Senior Standing Counsel for the second respondent claimed that notices dated 06.04.2022 and 04.05.2022 were issued, but there were no records to substantiate that these notices were dispatched and received by the petitioner. The court emphasized that mere posting of the date of hearing in the cause list is not sufficient and proper communication must be sent to the parties.

Issue 3: Merits of the Tribunal's decision to recall its earlier order dated 23.12.2020

The petitioner asserted that the Tribunal's earlier order dated 23.12.2020, which allowed the petitioner's appeal, was well-reasoned and there was no apparent error on the face of the record. The Tribunal's decision to recall the order was challenged on the grounds that the respondents should have appealed against the order instead of seeking its recall. The court noted that the Tribunal's order dated 23.12.2020 was quashed due to being barred by limitation under Section 153(3) of the Income Tax Act, 1961. The court found that the Tribunal did not provide the petitioner with a reasonable opportunity to be heard before passing the impugned order dated 18.05.2022.

Conclusion:

The court set aside the impugned order dated 18.05.2022 passed by the Income Tax Appellate Tribunal and remitted the case back to the Tribunal to pass a fresh order after hearing the petitioner in M.P. No. 47/Chny/21. The writ petition was disposed of with these observations, and no costs were awarded. Consequently, connected Writ Miscellaneous Petitions were closed.

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