1. In this reference the question referred to us to be found in the statement of the case is as follows :
'Whether the notice of hearing of the appeal before the Tribunal was logically and validly served on the assessee ?'
2. The assessee before us had filed an appeal to the Tribunal from the order of the Appellate Assistant Commissioner objecting to the addition of Rs. 2,000 in his total income as income from undisclosed sources. A certain address had been given in the memo of appeal before the Tribunal to which notice of hearing may be sent. The date of hearing of the appeal was fixed by the Tribunal on October 30, 1967, and the notice of hearing was sent to the assessee by registered post A.D. to the address given by him in the memo of appeal. The said notice seems to have been served on one Ajit Udeshi, who is the son of the assessee. However, at the hearing of the appeal no one was present on behalf of the assessee and the same was accordingly dismissed by the Tribunal for default of appearance of the appellant. That was on October 30, 1967.
3. On February 8, 1968, the assessee filed an application requesting the tribunal to restore the appeal to the file. By its order dated March 8, 1968, the Tribunal disposed of this application dismissing it as it was not satisfied with the grounds urged by the assessee in support of the application. Thereafter, at the instance of the assessee the reference has been made to the High Court.
4. To-day on behalf of the Commissioner, Mr. Joshi has pointed out that it is unnecessary to go into the question whether the notice of the hearing of the appeal before the Tribunal had been legally and validly served on the assessee since it has been decided by the Supreme Court that the Tribunal ought not to have dismissed the appeal for default of appearance and that the rule which enabled the Tribunal to do so has been held to be ultra vires.
5. This has been so held in commissioner of Income-tax v. S. Chenniappa Mudaliar : 74ITR41(SC) , in which it has been observed that the Tribunal is required to give a decision of the appeal by a simple dismissal for default on the ground that the party concerned has failed to appear. Rule 24 of the Appellate Tribunal Rules (as amended) permitting such dismissal has been clearly held as ultra vires as com ing into conflict with section 33(4). Mr. Joshi, therefore, has pointed out that in view of this authoritative pronouncement of the Supreme Court, the original order passed on October 30, 1967, cannot be sustained and the Tribunal was required and would be required dispose of the assessee's appeal on merits. This is the obvious position and since the assessee's appeal would be required to be disposed of by the Tribunal on Merits we will not go into the answer the question referred to us.
6. In view of the position explained above and since the appeal would have to be disposed of on its merits, the question referred to us is not answered. It is made clear that what we have observed earlier amounts to a direction to the Tribunal making it obligatory for it to consider the order made by it on October 30, 1967, as invalid in view of the decision of the Supreme Court and the Tribunal would be required to dispose of the assessee's appeal on merits in view of the Supreme Court decision above referred to.
7. The parties will bear their own costs of the reference.