Income Tax Appellate Tribunal - Chandigarh
Haryana State Roads And Bridges ... vs Dcit, Panchkula on 24 October, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH 'A', CHANDIGARH
BEFORE MS. DIVA SINGH, JUDICIAL MEMBER
AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No.582/Chd/2016
(Assessment Year : 2012-13)
Haryana State Roads and Vs. The D.C.I.T.,
Development Corporation Ltd., Panchkula Circle,
Bay No.13-14, Sector 2, Panchkula.
Panchkula.
PAN: AAACH9435M
(Appellant) (Respondent)
Appellant by : Shri Harry Rikhy
Respondent by : Shri Gulshan Raj, CI T DR
Date of hearing :10.10.2017
Date of Pronouncement :24.10.2017
O RDE R
PER ANNAPURNA GUPTA, A.M.:
Th i s a p p e a l f i l e d b y t h e a s s e s se e h a s b e e n p r ef e r r e d a g a i n s t t h e or d e r p a s s e d b y th e Ld . C o m m i s s i o n er o f I n co m e Ta x ( A p p e a l s ) , Pa n c h k u l a ( h e rei n a f t e r r e f e rr e d to as ' CI T( A p p e a l s ) ' ) r el a t i n g to a s s e ssm e n t y e a r 2 0 1 2 -1 3 .
2. G r o u n d N o. 1 r a i se d b y t h e a s s e sse e r e a d s a s u n der :
"1. That the order of the Ld. Commissioner of Income Tax (Appeals), Panchkula is defective both in law and facts of the case."
3. Th e a b o v e g r o un d b e i n g g e n e ral i n n at u r e ne ed s n o a d j u d i c a ti o n .
4. G r o u n d N o. 2 r a i se d b y t h e a s s e sse e r e a d s a s u n der :
"2. That the Ld. Commissioner of Income Tax (Appeals) Panchkula is not justified in dismissing the appeal on the technical ground that the Appeal Form 35 not filed as per the Rule 45 as the appellant had duly filed the appeal in the prescribed form according to the Rule 45 of the Income Tax Rules as done in the past."2
5. Th e assessee in the a b ov e g ro u n d has c h a l l e n g ed dismissal of t he appeal by the L d . CI T( A p p e a l s ) for the r e a s o n th a t th e a p p e a l f i l e d w as n o t ma i n t a i n ab l e i n l a w s i n c e t he v e r i f i ca t i o n i n t h e a pp e a l m e mo w a s s i g n e d b y u n a u t h o r i z e d p ers o n .
6. B r i e f l y s ta t e d , du r i n g t h e a p pe l l a t e p r o c e e di n g s , t h e L d . CI T( A p p e a l s ) n o t e d o n p e r u sa l o f t he m e m or a n d u m o f a p p e a l i n F o r m N o . 3 5 t h a t t h e ve r i f i c a ti o n i n F or m d i d n o t mention any na m e and f u r t her that it wa s signed by Executive E n gi n e e r of the as s e s s e e c o m p an y . Th e L d . CI T( A p p e a l s ) n o t e d t h at t h e a p p e a l w as n o t v e r i f i e d i n a c c o r d a n ce with Rule 4 5 ( 2) of I nc o m e Ta x Ru l e s , 1 9 62 w h e r e i n i t w a s to b e si g n e d a n d v e r i f i e d b y a p ers o n w h o i s a u t h o r i z ed t o s i g n t h e r e tu r n of i n c o m e u/ s 14 0 o f t he I n co m e Ta x A c t , 1 9 6 1 ( i n s h o rt ' th e A c t ' ) , w h i c h i n t h e c a s e o f a c o m p a ny i s t h e M a n a gi n g Di r e c t o r an d i n th e a b s e n c e o f M a n a g i n g Di re c t o r b y a n y D i r e c t o r a u t ho r i z ed t o v e r i f y the return. Th e s a m e w a s c o n f r o n t e d t o t h e a s se s s e e v i d e s h o w c a u se n o t i c e d a t e d 1 1 . 3 . 20 1 6 , i n re s p o n se t o w h i ch t h e a s s e s se e s u bm i t t e d t h at t h e n a m e o f t h e s i g ni n g p e r s o n had not been mentioned due to t y p o gr a p h i ca l error or o m i s s i o n a n d f ur t h e r h i s n a me i s S h r i S . P . S i ro h a , who d u r i n g t he y e ar w a s t h e G e n e ral M a n a g er o f t h e a s s e s s ee company. I t w as f u r t h e r s t a t e d t h a t h e wa s a u th o r i z e d by t h e M a n a g i n g Di r e c t o r , S h ri M a he s h K u m a r a n d E x e c u t i v e D i r e c t o r Sh r i K .B . N a r a n g . Th e L d . CI T( A p p e a l s ) r e f u s e d t o a c c e p t t h e a ss e ss e e ' s c o n t en t i o n s i n c e t h e a p p ea l w a s n ot 3 a c c o m p a n i e d b y a n y e v i d e n ce a n d n o u n a v o i d a bl e r e a s o n f o r not signing by the M a n a gi n g Director was given. He t h e r e f o r e h el d t h a t t h e a p p e a l r e m a i n e d u n v er i f i e d a s p e r the provisions of the Act a nd , t h e r e f o re , it was not m a i n t a i n ab l e i n l a w . F o r t h e a b ov e r e a so n s , t h e ap p e a l wa s d i s m i s s e d b y t he L d . CI T( A p p e a l s) .
7. Th e r e l e v a n t f i nd i n g s o f t h e L d. CI T( A p p e a l s ) a t p a r a 2 . 7 o f t he o r d er a r e r e p r od u c e d as u n d e r :
"2.7 In view of above facts and judicial pronouncements on relevant provisions of the Act, it is found that the appeal u/s 246A before the Commissioner (Appeals) is required to be filed in the prescribed Form No. 35, and the same is to be signed by the person specified in Sub Rule (2) of Rule 45. As per sub rule(2)ofRule45,theprescribed form of appeal, the grounds of appeal and the form of verification appended thereto, are required to be signed and verified by the person who is authorized to sign the return of income u/s 140oftheAct.As per section140 of the Act, the return of income u/s 139 has to be signed and verified, in the case of a company, resident in India, by the Managing Director thereof, or where for any inevitable reason such Managing Director is not able to sign and verify the return or where there is no Managing Director, by any Director thereof. Therefore, the person who is the Managing Director of the company, or its Director in certain circumstances, on the date of the filing of the return only can sign and verify the return in the case of a company. In the case of return of income, there is provision to cure defects if AO issues notice u/s 139(9) but no such provision to cure defects in filing of appeal is provided in the Act. In the instant case, the verification in the appeal memo was signed by an un- named person being Executive Engineer of the company who was neither Managing Director nor Director of the company on the signed date when the present appeal was filed. Although, there is no provision for authorizing any other person for signing the appeal memo even then, as stated in response to show cause notice, no such authorization was also filed alongwith the appeal memo or even during any later stage of appellate proceedings. Therefore, in the absence of appeal verified and signed as per provisions of the Act, the appeal is not maintainable in law and liable to be dismissed. Thus, the appeal is dismissed."
8. B e f o r e u s , t he Ld . c o u n s e l f or a ss e s s e e c o n te n d ed t h a t a d e q u a t e o p p o r tu n i t y w a s n ot gi v e n t o t h e as s es s e e t o f i l e 4 e v i d e n c e o f au t ho r i z a t i o n o f t h e E x e c u t i v e E n g i ne e r t o s i g n t h e a p p ea l fo r m b y t h e D i r e ct o r o f t h e c o m p a ny a n d a l s o to s t a t e t h e r e a s o ns f o r n o t s i g n i n g t h e a p p e a l b y t h e D i r e c t or o f t h e c o m p a n y. Th e L d . c o uns e l f o r a s s e s se e d r e w o ur a t t e n t i o n t o t h e f a c t t h at i t w a s o n l y a t t h e f a g en d o f the a p p e l l a t e p r o ce ed i n g s t ha t t h i s i s s u e w as b r o ugh t t o t he notice of the as s e s s e e . Th e Ld. counsel for assessee pointed out t ha t the a p p e l l a te order was passed on 15.3.2016 and this issue of the appeal not being m a i n t a i n ab l e i n l a w f o r t h e a f o re s a i d r e a s o ns w a s p o i n t ed o u t t o t h e a ss e ss e e o n l y o n 11 . 3. 2 0 1 6 . Th e r e f o re , v i r t u a l l y o n l y 4 d a y s w e re g i v e n t o t h e as s e s s e e f o r re s po n d . Th e L d . C o u n s el s t a te d that there were reasons for non- c o m p l y i n g wi t h th e p r o v i s i o ns o f R u l e 4 5 ( 2 ) r . w. s .1 4 0 o f t h e A c t , b u t i n t h e a b s e n c e o f a d e qu a t e o p p o rt u n i t y t h e s a me c o u l d no t be s ub m i t t e d t o t h e L d . CI T( A p p e a l s ) . Th e L d . c o u n s e l f o r as s es s e e p r a y e d th a t t h e m at t e r b e re s t o r e d t o t h e L d . CI T( A p p e al s ) f o r g i v i n g o ppo r t u n i t y to t h e as s e s s e e t o a d d r e s s t h e i s s ue . Th e L d . c o u n s e l f o r a s s e s s e e a l s o s t a t ed t h a t a t t h e ti me o f f i l i n g of a pp e a l n o d e f ec t n o t i c e w a s i s s u e d t o t h e a ss e s s e e i n t h i s r eg a r d a n d , t h e r efo r e , a l s o i t s k i p p e d th e a t t en t i o n o f th e a s se s s e e . Th e L d . c o u n s e l for a s s e s s e e p r a y e d t h a t i n t h e i n t e r e s t o f n a t u r al j u s t i c e t h e appeal be r es t or e d t o t h e L d .C I T( A p p e al s ) t o g i v e f r e s h o p p o r t u n i t y o f he a r i n g a nd t o g i v e o p p o r tu n i t y to c u r e th e defect.
5
9. Th e L d . D R , o n t h e o t h e r h a n d , r e l i e d u p o n t h e o r d e r o f t h e L d. CI T( A pp e a l s ) .
10. W e h a v e h e a r d t h e c o n t e n ti o n s o f b o t h t h e p ar t i e s. U n d o u b t e dl y , t he L d . CI T( A p p e a l s) h a d d i s mi s s e d a s s e s s e e 's a p p e a l s i n ce t h e a p p e a l f o r m was n o t p r o p e rl y ve r i f i e d a s p r e s c r i b ed b y Ru l e 4 5 ( 2 ) o f th e I n co m e Ta x R u l es r . w . s . 1 40 o f t h e A c t w h i ch r e q u i re s t he s a m e t o b e si g ne d b y th e M a n a g i n g D i r e c to r o f t h e c o m p an y w h i l e i t w a s s i g n e d b y a p e r s o n w h o s e na m e w a s a l s o no t m e n ti o n e d i n t h e ap p e a l form. I t i s a l s o a n u n di s p u t e d f a c t t h at w h en th e a p p e al w a s f i l e d n o d ef ec t n o t i c e w a s i s su e d t o t h e a s s e ss e e a n d i t w a s o n l y o n 1 1 .0 3 . 2 0 1 6 , d u ri n g a p p e l l a t e p ro c e ed i n g s , t h a t t h e a s s e s se e w a s c o n f r o n t ed w i t h t h e s a m e . Th e re f o r e , i t i s p r o b a b l e t h at t h e a s s e s s e e r e m a i n e d u n a w a r e o f t h e d e f e ct a l l a l o ng a n d i t w a s o n l y 1 1 . 3 .2 01 6 t h a t i t b ec a me a w a r e o f t h e s a i d d e f e ct a n d f i l e d a r e p l y m e n t i o n i ng t h e na m e o f t h e p e r s o n w h o ha d s i g n e d t h e f o r m a n d st a t i n g t h at t h e s a i d p e r s o n h a d b e en a u t h o r i z e d b y th e M a n a g i n g D i re c t o r o f t h e c o m p a n y to d o so . W i t h ou t g i vi n g a n y f u rt h e r op p o r t u n i t y to the a s s e ss ee to fi l e e v i d en c e in this r eg a r d , th e L d . CI T( A p p e a l s ) , w e f i n d , d i s m i s se d t h e a ss e s s e e' s a p p e a l .
11. I n v i e w o f t h e ab o v e f a c t s , w e ar e i n a g r e e m e n t w i t h t h e c o n t e n ti o n o f t h e L d . c o u n s el f o r a s s e s s ee t h a t a d e q u a te o p p o r t u n i t y t o ad d r e s s t h e d ef e c t i n t h e a p p e a l f or m f i l e d by the a s se s s e e wa s not g i v en to the a s s e ss e e nor was a d e q u a t e o p po r tu n i t y g i v e n t o e x p l a i n t h e r e as on f o r t h e defect. I n vi e w of t h e sa m e , we co n s i d e r i t f i t t o re s t o r e th e 6 appeal denovo to the file of th e L d . CI T( A p pe al s ) to be d e c i d e d af r e s h o n t h e i s su e o f n o n - m a i nt a i n a bi l i t y o f t he a p p e a l al o n g w i t h t h e o th e r gr o u nd s r a i s ed , a ft e r g i v i n g du e o p p o r t u n i t y o f he a r i n g t o t h e as se s s e e .
12. In the r e s ul t , the a p pe a l of the a s se s s e e is a l l o w e d f o r s ta t i s t i c a l p ur p o s e s.
O r d e r p r on o u n c ed i n t h e o p e n cou r t .
Sd/- Sd/-
(DIVA SINGH) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 24 t h October, 2017
*Rati*
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A)s
4. The CIT
5. The DR
Assistant Registrar,
ITAT, Chandigarh