Income Tax Appellate Tribunal - Ahmedabad
Income Tax Officer vs Marco Roadways on 19 June, 2002
Equivalent citations: (2003)81TTJ(AHD)275
ORDER
T.N. Chopra, A.M.
1. This appeal is filed by the Revenue against the order of the CIT(A) dt. 24th Jan., 1995, for asst. yr. 1989-90. The Revenue assails the deletion of the addition of excess payment of truck hiring charges Rs. 2,75,531 and hire charges of Rs. 12,186.
2. The notices of hearing sent to the assessee at the address given in Form No. 36, by the Revenue M/s Marco Roadways, Ghee Bazar, Kalupur, Ahmedabad were received back unserved. Therefore, notices of hearing were given to the Departmental Representative for effecting service on the respondent-assessee. However, on the dates of hearing no intimation was given by the learned Departmental Representative whether service of the notice had been effected on the assessee or not particularly since none attended on behalf of the assessee. Last such notice of hearing fixing the date of hearing as 11th June, 2002, was handed over to the Departmental Representative on 28th March, 2002, 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 U.S. Bhatti, the learned senior Departmental Representative 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 effect or not. It appears that the Department has shown total negligence in the matter of service of notices of hearing so that the appeal of the Revenue could not be taken for hearing on more than one occasions.
3. 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 service 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 did not make any effort to get the notices served, it has not been possible to conduct the adjudication proceedings as per the requirements of Section 254(1). When the Bench confronted the learned Departmental Representative as to why the Revenue's appeal may not be dismissed due to wilful reluctance in service of notices on the respondent-assessee, the learned Departmental Representative came up with a two-fold plea. Firstly he submitted that when the notices were handed over by the Registry for service on earlier occasions, his predecessor failed to forward the same to the AO for effecting service on the assessee. Shri Bhati explained that he could not be blamed for the negligence of his predecessor Departmental Representative. Secondly Shri Bhati argued that since the Tribunal is not a Court, the Revenue's appeal cannot be dismissed even if the correct address of the respondent has not been given by the Revenue or the notice of hearing handed over by the Tribunal has not been served on the assessee. In support of his contention, Shri Bhati placed reliance on the decision of the Gujarat High Court in the case of CIT v. Western India Engg. Co. Ltd. (1970) 77 ITR 165 (Guj).
4. We are unable to appreciate the ultra legalistic approach of the learned Departmental Representative. In our opinion, it is not at all relevant whether the Tribunal is a Court or not. It cannot possibly be disputed that the Tribunal is to decide the dispute between the assessee and the Revenue and exercise judicial power of the State. The IT Department is an instrumentality of the State entrusted with the function of assessment and collection of taxes. It is rather unfortunate that the Revenue has canvassed a hypertechnical view and pleads that there is no obligation on it to either provide correct address of the respondent-assessee or to serve notice of hearing on the assessee. We feel that the IT Department as an executive organ of the State, has displayed wilful reluctance to effect service of notice of hearing on the respondent-assessee issued by the Tribunal which is a judicial organ of the State entrusted with the adjudication of tax disputes with the taxpayers. In an appeal filed by the Revenue expeditious disposal of the tax dispute would necessarily be in the best interest of the Revenue. However, it is rather unfortunate that the negative attitude based on absurd technicalities is being adopted.
5. 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-assessee in Revenue's appeals, such notices are got served through IT authorities. Such practice and procedure has been long established and followed in the interest of expeditious adjudication of tax disputes. It is beyond our comprehension as to why the Revenue now seeks a departure from the long established practice.
6. 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 ITO v. M.K. Mohammed Kunhi (1969) 71 ITR 815 (SC). 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.
7. 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, Gujarat Maritime Board v. Haji Daud Haji Harun Abu (1996) 11 SCC 23).
8. 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 and Anr. v. Paras Laminates (P) Ltd. (1990) 186 ITR 722, 726 (SC), 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 recognised as incidental and ancillary, not because they are inherent in the Tribunal, nor 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 powers 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."
Reference may further be made to the decision of Hon'ble Supreme Court in the case of Union of India v. Paras Laminates (P) Ltd. (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 IT 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 IT 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, IT Inspector, etc. for the purpose of serving various statutory notices on the taxpayer. Since the Revenue has shown scant regard for serving the notices of hearing on the respondent-assessee and has come up challenging the power of the Tribunal to direct the Revenue for service, we have no alternative but to dismiss the appeal of the Revenue.
In the result, the appeal of the Revenue is dismissed.