2004 (7) TMI 273 - AT - Income Tax

Revenue appeal dismissed due to improper notice service in construction profit deletion case for 1996-97.

Deputy Commissioner Of Income-Tax. Versus Aditya Organisers (P.) Ltd.

The appeal filed by the revenue against the deletion of profit from construction business for the assessment year 1996-97 was dismissed by the Tribunal ... Appellate Tribunal Issues:1. Service of notice on the respondent assessee for the appeal filed by the revenue.2. Jurisdiction and powers of the Tribunal regarding service of notice.Analysis:1. The appeal was filed by the revenue against the deletion of addition of profit from construction business for a specific amount for the assessment year 1996-97. However, notices of hearing sent to the assessee were returned unserved. The departmental representative failed to confirm the service of notice on the assessee. The Tribunal emphasized that the opportunity of being heard is crucial before adjudicating an appeal, and proper service of notice is a prerequisite. Since the revenue did not provide the correct address of the assessee and failed to ensure service of notice, the Tribunal could not proceed with the appeal on its merits. The Tribunal highlighted the importance of the right to be heard for both parties in an appeal. The revenue's apathy towards serving notices led to the dismissal of the appeal.2. The Tribunal discussed the established practice of getting notices served through Income-tax authorities when the respondent assessee cannot be served directly. It referred to legal principles stating that the Tribunal has powers, both expressly granted and implied, necessary for effective execution of its jurisdiction. The Tribunal cited previous court decisions emphasizing that incidental and ancillary powers are essential for the exercise of substantive powers. It was noted that the Tribunal is entitled to exercise all necessary powers for performing adjudicative functions, including directing the Income-tax department to serve notices on the assessee. The Tribunal highlighted that if the revenue fails to provide the exact address of the assessee, it cannot expect the same to be followed if the decision is in its favor. Ultimately, the appeal of the revenue was dismissed, with the option to recall the order if the assessee is located within a reasonable time.In conclusion, the judgment focused on the significance of proper service of notice in appeals, the Tribunal's jurisdiction and powers in ensuring fair adjudication, and the necessity of following established legal procedures for expeditious resolution of tax disputes.