Posting Date of Misc. Petition Hearing in Cause List is Inadequate; Parties Must be Formally Notified of Hearing Date | HC

Case Details: Ejaz Tanning Company v. Assistant Registrar - [2023] 156 taxmann.com 574 (Madras)

Judiciary and Counsel Details

• • C. Saravanan, J.
  • Ravi Kannan for the Petitioner.
  • Dr. B. Ramaswamy for the Respondent.

Facts of the Case

The assistant registrar had filed a Miscellaneous Petition to recall the order passed by the Tribunal quashing the AO’s assessment order being barred by limitation under section 153(3). The Tribunal passed an order dated 18-5-2022 allowing the Miscellaneous Petition to exercise powers under section 254(2).

Aggrieved by the order, the assessee filed writ petition to the Madras High Court, contending that no notice was issued before the Tribunal passed the order allowing Misc. petition.

High Court Held

The High Court held that as per sections 3 and 4 of the Indian Contract Act. 1872, a communication of information is deemed to be made by any act or omission of the party by which he intends to communicate such proposal, which has the effect of communicating it. Therefore, communication/intimation is complete when it comes to the knowledge of the person to whom it is made.

Mere posting of the date of hearing of the Miscellaneous Petition in the cause list is not sufficient. A proper communication has to be sent to the parties regarding the date of hearing of the Miscellaneous Petition once an appeal is disposed of. As per Sub-clause 2 to Rule 34A Income Tax (Appellate Tribunal) Rules, the procedure for filing an appeal under the Rules will apply mutatis mutandis to application under section 254(2). Sub-clause 3 to Rule 34A states that the Tribunal shall dispose of the application after giving both parties a reasonable opportunity to be heard.

Further, Rule 19(1) contemplates serving a copy of the Miscellaneous Petition to the assessee, counsel, or authorized persons, respectively. The Tribunal has to notify the parties specifying the date and place of hearing of the appeal and send the respondent a copy of the memorandum of appeal. Thus, application under section 254(2) has to be communicated to the petitioner. In the instant case, it appears that the copy of the petition has not been sent to the petitioner.

Thus, mere dispatch of a notice is not sufficient. To hold that notice came to the petitioner’s knowledge, it should also have been received by the person to whom it was addressed. There were no records to show the petitioner received the notice of intimation.

Therefore, the order passed by the Tribunal was remitted back to the Tribunal.