M/s State Bank Of India., Visakhapatnam V. The ITO, TDS Ward-2(2)., Visakhapatnam

ITA 11/VIZ/2008

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72684 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 09-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNAN
• Keywords: Opportunity of being heard; Reasonable cause; Right to appeal; Condonation of delay; Ignorance of law
• Section: 201(1); 246

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, VISHAKHAPATNAM BEFORE S/SHRI B. RAMAKOTAIAH (AM) & SAKTIJIT DEY (JM) I.T.A. NOS.15 & 16 /VIZ/2008 ASSESSMENT YEARS: 2006 - 07 & 2007 - 08 CHIEF MANAGER, STATE BANK OF INDIA, ZONAL OFFICE,BALAJINAGAR, SIRIPURAM ROAD, VISAKHAPATNAM VS. INCOME TAX OFFICER (TDS) - 2(2), WARD - 2 VISAKHAPATNAM PAN/TAN NO. : VPNSO 2897 G (APPELLANT) .. (RESPONDENT) I.T.A. NOS.11 & 12 /VIZ/2008 ASSESSMENT YEARS: 2006 - 07 & 2007 - 08 CHIEF MANAGER, STATE BANK OF INDIA, VENKATESWARMITTA BRANCH, VISAKHAPATNAM VS INCOME TAX OFFICER (TDS) - 2(2), WARD - 2 VISAKHAPATNAM PAN/TAN NO. : VPNSO 2897 G (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI C.SUBRA H MANYAM RESPONDENT BY : SMT. KOMALI KRISHNAN DATE OF HEARING : 0 3/12/2013 DATE OF PRONOUNCEMENT : 11 /12/2013 O R D E R PER BENCH: THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST RESPECTIVE ORDERS OF THE CIT(A) ON COMMON GROUNDS. 2 2. FIRST, WE TAKE UP APPEALS IN I.T.A. NO.15 & 16/VIZ/2008. 3. THE FOLLOWING TWO ISSUES EMERGE OUT OF THE GROUNDS RAISED BY THE ASSESSEE: 1. WHETHER THE CIT(A) WAS JUSTIFIED IN NOT ENTERTAINING THE ASSESSEES APPEALS ON THE GROUND THAT IT IS NOT SIGNED BY THE AUTHORIZED PERSON ; 2. WHETHER THE CIT(A) WAS JUSTIFIED IN NOT CONSIDERING THE APPEALS OF THE ASSESSEE ON MERITS OF THE DEMAND. 4. BRIEFLY STATED THE RELEVANT FACTS ARE THAT THE ASSESSING OFFICER ON THE BASIS OF INFORMATION AVAILABLE ON RECORD NOTED THAT THE ASSESSEE DEDUCTOR I.E. CHIEF MANAGER, STATE BANK OF INDIA, ZONAL OFFICE, VISAKHAPATNAM HAD NOT TREATED THE AMOUNTS PAID AS LEASED ACCOMMODATION TO SOME OF ITS EMPLOYEES AS PERQUISITE AND, ACCORDINGLY NOT DEDUCTED TAX AT SOURCE ON SUCH INCOME. HE, THEREFORE, ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE BANK ON 05 - 07 - 2007 CALLING UPON IT TO FURNISH THE DETAILS OF AMOUNTS PAID AS RENTS AND ALSO TO SHOW CAUSE AS TO WHY THE ASSESSEE SHOULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT AS PER THE TERMS OF SECTION 201(1) OF THE ACT. THE ASSESSEE IN ITS REPLY DATED 6 - 08 - 2007 SUBMITTED THAT THERE WAS NO CONCESSION WHEN THE LEASED ACCOMMODATION IS PROVIDED TO ITS EMPLOYEES IN VIEW OF THE DECISION OF HO N'BLE CALCUTTA HIGH COURT DT.15 - 03 - 94 IN CO 5462 (W)/94. THE ASSESSING OFFICER AFTER CONSIDERING THE CONTENTION OF THE ASSESSEE THOUGH ACCEPTED THE FACT THAT VARIOUS ASSOCIATIONS HAVE APPROACHED COURTS WITH REGARD TO THE TREATMENT OF P ERQUISITE WHEN LEASED ACCOMMODATION IS PROVIDED TO ITS EMPLOYEES AND ALSO THE FACT THAT SOME OF THE HONBLE HIGH COURTS HAVE DELIVERED JUDGMENTS IN FAVOUR OF THE SAID ASSOCIATION S . 3 HOWEVER, H E OBSERVED THAT , THESE DECISIONS PERTAIN TO THE PERIOD MUCH EARLIER TO THE FINANCIAL YEAR UNDER CONSIDERATION. HE FURTHER NOTED THAT SUBSEQUENT TO THIS PERIOD FOR WHICH THE JUDGMENTS WE R E DELIVERED BY DIFFERENT HIGH COURTS, RULES 3 OF THE IT RULES, WHICH DEALS WITH THE CALCULATION OF PERQ UISITE OF LEASED ACCOMMODATION PROVIDED BY THE EMPLOYER HAS UNDERGONE AMENDMENT FROM TIME TO TIME AS A RESULT THE RATIO LAI D DOWN BY THE DIFFERENT HIGH COURTS HAVE BECOME IN APPLICABLE. HE FURTHER NOTED THAT IN THE CASE OF ARUN KUMAR & OTHERS VS. UNION OF INDIA AND ANOTHER REPORTED IN 286 ITR 89, HON'BL E APEX COURT HELD THAT THE ASSESSEES CAN ALWAYS ARGUE THAT THERE IS NO CONCESSION WHEN LEASED ACCOMMODATION IS PROVIDED. TO NULLIFY THE EFFECT OF THE SAID DECISION OF THE HONBLE SUPREME COURT, AN AMENDMENT WAS BROUGHT INTO THE STATUTE BY THE FINANCE ACT, 2007 IN SECTION 17(2) WHEREIN IT WAS CLEARLY MENTIONED THAT WHEN LEASED ACCOMMODATION IS PROVIDED TO THE EMPLOYEES OF AN ORGANIZATION OTHER THAN CENTRAL GOVERNMENT OR STATE GOVER NMENT, THEN IT IS DEEMED THAT A CONCESSION HAS BEEN GRANTED TO THE RESPECTIVE EMPLOYEES AND THE SAID CONCESSION IS PERQUISITE AS PER THE PROVISIONS OF SECTION 17(2) OF THE I.T.ACT, 1961. THE SAID AMENDMENT WAS BROUGHT INTO THE STATUTE WITH RETROSPECTIVE E FFECT FROM THE F.Y. 2001 - 02. THE AO CONCLUDED THAT AS PER THE SAID AMENDMENT, THE AMOUNTS PAID AS LEASED ACCOMMODATION IS TO BE TREATED AS PERQUISITE IN THE HANDS OF THE RESPECTIVE EMPLOYEES. HE FURTHER HELD THAT SINCE PERQUISITE IS IN THE NATURE OF INCO ME IN THE HANDS OF THE EMPLOYEES, THE ASSESSEE DEDUCTOR IS REQUIRED TO DEDUCT TAX AT SOURCE. THE ASSESSEE HAVING NOT DEDUCTED TAX AT SOURCE AS WAS REQUIRED 4 TO BE DONE, IT HAS TO BE TREATED AS ASSESSEE IN DEFAULT AND, ACCORDINGLY, SUBJECT TO DEMAND UNDER S ECTION 201(1) AND LEVY OF INTEREST UNDER SECTION 201(1A) OF THE ACT. THE AO ACCORDINGLY, RAISED DEMAND OF RS.18,29,029/ - UNDER SECTION 201(1) AND RS.3,32,017/ - UNDER SECTION 201(1A) OF THE ACT. BEING AGGRIEVED OF SUCH ORDER PASSED BY THE ASSESSING OFFI CER, ASSESSEE PREFERRED APPEALS BEFORE LD CIT(A). 5. LD CIT(A) ON EXAMINING THE APPEAL DOCUMENTS NOTED THAT VERIFICATION IN FORM NO.35 WAS BY THE CHIEF MANAGER, STATE BANK OF INDIA, ZONAL OFFICE, VISAKHAPATNAM, THE CIT(A) WAS OF THE VIEW THAT I N CASE OF A COMPANY, THE APPEAL PAPERS AS WELL AS THE FORM OF VERIFICATION HAS TO BE SIGNED BY THE MANAGING DIRECTOR. THEREFORE, HE ISSUED A SHOW CAUSE LETTER DATED 19.10.2007 REQUIRING THE ASSESSEE TO EXPLAIN AS TO WHY THE APPEAL S SHOULD NOT BE DISMISSED IN VIEW OF THE SPECIFIC PROVISION OF RULE 45 OF THE INCOME TAX RULES, 1961 R.W.S SECTION 140 ( C ) OF THE INCOME TAX ACT, 1961. IN REPLY TO SHOW C AUSE NOTICE, ASSESSEE SUBMITTED THAT A S PER CENTRAL OFFICE NOTE NO.ORG/1705 DATED 2 7/03/87 IN PURSUANCE OF REGULATIONS 76 (1) OF THE STATE BANK OF INDIA GENERAL REGULATIONS, 1955, FRAMED U/S 50 OF THE STATE BANK OF INDIA ACT 1955, THE EXECUTIVE COMMITTEE OF THE CENTRAL BOARD HEADED BY THE MANAGING DIRECTOR OF STATE BANK OF INDIA HAD AUTH ORISED ALL CATEGORIES OF SBI OFFICERS TO SIGN ALL DOCUMENTS, INSTRUMENTS, ACCOUNTS, RECEIPTS LETTER AND ADVISORS ETC., CONNECTED WITH THE CURRENT OR AUTHORISED BUSINESS OF THE BANK IN RESPECT OF MATTERS COMING IN DISCHARGE OF FUNCTIONS OF THE POSTS HELD BY THEM FOR THE TIME BEING. IT WAS SUBMITTED THAT AS PER REGULATION 76, THE POWER OF SIGNING THE DOCUMENTS HAS BEEN 5 GIVEN TO THE VICE CHAIRMAN, THE MANAGING DIRECTORS, THE DY. MANAGING DIRECTORS, THE CHIEF GENERAL MANAGERS AND SUCH OTHER OFFICERS OR EMPLOYE ES OF THE STATE BANK AS THE CENTRAL BOARD OR THE EXECUTIVE COMMITTEE MAY AUTHORISE IN THIS BEHALF BY NOTIFICATION IN THE GAZETTE OF INDIA. ON THE AFORESAID BASIS, IT WAS CONTENDED THAT THE CHIEF MANAGER, SBI, ZONAL OFFICE, VISAKHAPATNAM HAS THE AUTHORIT Y TO SIGN AND VERIFY THE DOCUMENTS IN CONNECTION WITH ANY LEGAL PROCEEDINGS. IT WAS FURTHER SUBMITTED THAT THE AUTHOR ITY OF SBI OFFICERS CONFERRED UNDER SBI ACT, 1955 HAS BEEN CONFIRMED BY VARIOUS JUDGMENTS OF HON'BLE COURT . IN THIS CONTEXT, ASSESSEE SUBMITTED A JUDGMENT OF HON'BLE PUNJAB AND HARYANA HIGH COURT REPORTED IN AIR 1981 AT PAGE 188. IT WAS FINALLY SUBMITTED BY THE ASSESSEE THAT IN VIEW OF SPECIFIC P ROVISIONS OF THE SBI ACT, 1955, IT OVERRIDES THE PRO VISIONS OF INCOME - TAX TAX ACT AND THE C HIEF MANAGER IS COMPETENT TO SIGN AND VERIFY THE APPEAL PAPERS. 6. LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF VIJAY PRAKASH D. MEHTA VS. COLLECTOR OF CUSTOMS REPORTED IN 175 ITR 540, THOUGH WAS OF THE VIEW THAT AN AGGRIEVED ASSESSEE IN AN INCOME TAX PROCEEDINGS HAS THE STATUTORY RIGHT TO FILE THE FIRST APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) BUT SUCH RIGHT IS CIRCUMSCRIBED BY SECTION 249 OF THE ACT. HE FU RTHER NOTED THAT SECTION 249(1) OF THE ACT MANDATES THAT EVERY APPEAL SHALL BE IN THE PRESCRIBED FORM AND SHALL BE VERIFIED IN THE PRESCRIBED MANNER. HE FURTHER NOTED THAT SUCH PRESCRIPTION HAS BEEN GIVEN IN RULE 45 OF THE INCOME TAX RULES, 1962, WHICH S TATES THAT THE FORM OF APPEAL, THE GROUNDS OF 6 APPEAL AND THE FORM OF VERIFICATION APPENDED THERETO RELATING TO AN ASSESSEE SHALL BE SIGNED AND VERIFIED BY THE PERSON WHO IS AUTHORISED TO SIGN THE RETURN OF INCOME U/S 140 ( C ) OF THE ACT AS APPLICABLE TO THE ASSESSEE. ON INTERPRETATION OF SECTION 140 ( C ) OF THE INCOME TAX ACT, LD CIT(A) WAS OF THE VIEW THAT AS PER THE SAID PROVISIONS IN CASE OF A COMPANY, THE RETURN AND THE FORM OF VERIFICATION HAS TO BE SIGNED BY THE MANAGING DIRECTOR THEREOF, OR WHERE FOR ANY UNAVOIDABLE REASONS SUCH MANAGING DIRECTOR IS NOT ABLE TO SIGN AND VERIFY THE RETURN OR WHERE THERE IS NO MANAGING DIRECTOR, BY ANY DIRECTOR THEREOF. HE THEREFORE, CONCLUDED THAT SINCE THE ASSESSEE IS A COMPANY, THE APP EAL PAPERS AS PER THE STATUTORY REQUIREMENTS SHOULD HAVE BEEN SIGNED BY THE MANAGING DIRECTOR. LD CIT(A), HOWEVER, FOLLOWING CERTAIN DECISIONS OF HONBLE SUPREME COURT AND OTHER BENCHES OF THE TRIBUNAL, INCLUDING THE HYDERABAD BENCH, WAS OF THE VIEW THAT NON - SIGNING OF PAPERS BY THE PROPER PERSON IS ONLY A CURABLE DEFECT. THE CIT(A ) THEREFORE NOTICED THAT THE ASSESSEE TO GET THE APPEAL MEMO SIGNED BY THE PROPER PERSON HOWEVER, THE ASSESSEE ARGUED THAT THE CHIEF MANAGER OF THE CONCERNED BRA NCH IS COMPETENT PERSON TO SIGN. L D CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BY HOLDING THAT AS PER SPECIFIC PROVISIONS OF RULE 45 R.W.S140 ( C ) , THE ASSESSEES APPEAL CANNOT BE CONSIDERED TO BE A VALID APPEAL AS IT HAS NOT BEEN SIGNED BY THE COMPET ENT PERSON. IN THIS CONTEXT, LD CIT(A) RELIED UPON VARIOUS DECISIONS AND DISMISSED THE APPEALS IN LIMINE BY TREATING THEM AS NON - EST. BEING AGGRIEVED BY THIS ORDER OF LD CIT(A), ASSESSEE IS IN APPEALS BEFORE US. 7 7 . AT THE TIME OF HEARING, LD A.R. SUBMIT TED THAT LD CIT(A) WAS TOTALLY MISCONCEIVED AND UNJUSTIFIED IN DISMISSING THE APPEALS IN LIMINE AS THE CHIEF MANAGER IS COMPETENT AND AUTHORIZED TO SIGN AND VERIFY THE APPEAL MEMO AS PER THE STATUTORY PROVISIONS. LD A.R. REFERRING TO SECTION 246A, SECTION 140 ( C ) AND RULE 45 OF THE I.T.RULES SUBMITTED THAT AFORESAID PROVISIONS READ TOGEHTER NOWHERE PUT ANY RESTRICTION THAT ONLY THE MANAGING DIRECTOR HAS TO SIGN THE APPEAL PAPERS. LD A.R. SUBMITTED THAT IN CASE OF THE ASSESSEE, APPEALS ARISE OUT OF ORDER PA SSED UNDER SECTION 201(1) AND 201(1A) OF THE ACT. IT WAS SUBMITTED BY LD A.R. THAT THE ANNUAL RETURN FOR TDS IN FORM NO.27A , 27B AND APPLICATION FOR TAN IN FORM NO.49B WERE SIGNED BY THE CHIEF MANAGER OF THE ZONAL OFFICE. IT WAS SUBMITTED TH AT THE AO HAS ALSO ACTED UPON THE RETURN FILED BY THE CHIEF MANAGER, ZONAL OFFICE AND IN FACT THE ORDER PASSED UNDER SECTION 201 AND 201(1A) OF THE ACT AS WELL AS DEMAND NOTICE ISSUED CONSEQUENT THERETO WERE ONLY IN THE NAME OF THE CHIEF MANAGER, SBI, WHO IS THE DEDUCT OR. THEREFORE, HE CONTENDED THAT IF THE LOGIC APPLIED BY LD CIT(A) IN DISMISSING THE APPEALS WOULD BE MADE APPLICABLE TO SUCH RETURNS THEN DEMAND RAISED BY THE AO ITSELF WOULD BECOME INVALID AS IT IS AGAINST THE CHIEF MANAGER ONLY AND ALSO IN CONSEQUENCE TO RETURNS, STATEMENT S FILED BY THE CHIEF MANAGER WHO ACCORDING TO THE CIT(A), IS NOT COMPETENT PERSON TO FILE THE RETURNS AS PER SECTION 140 ( C ) OF THE ACT. LD A.R. SUBMITTED THAT CONSIDERING THE AMBIGUITY OF THE STATUTORY PROVISIONS, THERE HAS BEEN AN 8 AMENDMENT TO SECTION 246A OF THE ACT BY I NSERTING THE WORD DEDUCTOR IN SUB - SECTION(1) OF SECTION 246A AS A PERSON COMPETENT TO FILE AN APPEAL. LD A.R. SUBMITTED THAT THOUGH THE AFORESAID AMENDMENT HAS BEEN BROUGHT TO THE STATUTE W.E.F. 1.7.2012 BUT SINC E IT IS CURATIVE IN NATURE, IT WILL APPLY ALSO TO THE EARLIER ASSESSMENT YEARS. 8 . L D A.R. ALSO ARGUING ON THE MERITS OF THE DEMAND SUBMITTED THAT IN RESPECT OF ANOTHER BRANCH OF THE ASSESSEE BANK I.E. BRANCH MANAGER, SBI, GANAPAVRAM IN I.T.A. NO.389/VIZA G/2007 DATED 24.3.2010, THIS BENCH OF THE TRIBUNAL FOLLOWING ANOTHER ORDER OF THE COORDINATE BENCH IN THE CASE OF RASHTR IYA ISPAT NIGAM LIMITED VS A CIT (ITA NOS.472 & 473 OF 2008 HELD THAT WHERE THE STANDARD RENT IS CHARGED FROM THE EMPLOYEES WHILE PROVIDI NG RENT FREE ACCOMMODATION, THERE CAN BE NO CONCESSION IN RESPECT OF ACCOMMODATION PROVIDED TO THE EMPLOYEES, HENCE CANNOT BE TREATED AS PERQUISITE REQUIRING DEDUCTION OF TAX AT SOURCE AND, ACCORDINGLY, THE COORDINATE BENCH DIRECTED TO DELETE THE DEMAND RAISED UNDER SECTION 201(1) OF THE ACT . 9 . ON THE OTHER HAND, LD D.R. STRONGLY SUPPORTING THE ORDERS OF LD CIT(A) SUBMITTED THAT SINCE THE APPEAL PAPERS HAVE NOT BEEN SIGNED BY THE AUTHORIZED PER SON AS MENTIONED IN SECTION 140(C) OF THE ACT, THEREFORE, THE CIT(A) WAS JUSTIFIED IN DISMISSING THE APPEALS IN LIMINE. 9 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RECORD OF THE CASE AS WELL AS THE ORDERS OF REVENUE AUTHORITIES. 11 . IT HAS TO BE NOTED FROM THE ORDER OF LD CIT(A) THAT HE HAS DISMISSE D THE APPEAL S IN LIMINE ONLY ON THE GROUND THAT THE CHIEF MANAGER WAS NOT THE COMPETENT PERSON TO SIGN THE APPEAL P APERS AND FOR FILING THE APPEAL AND AS REQUIRED UNDER SECTION 140 ( C ) R.W.S 45 OF THE IT RU LES IS THAT MD SHOULD HAVE SIGNED THE APPEAL PAPERS. HOWEVER, WE ARE NOT ABLE TO PERSUADE OURSELVES TO AGREE WITH THE AFORESAID FINDINGS OF THE CIT(A) FOR THE REASONS NOTED HEREINAFTER: 12. AS PER THE DOCUMENTS AVAILABLE ON RECORD, IT IS A FA CT THAT ANNUAL RETURN AND STATEMENT IN FORM NO.27A, 27B AS WELL AS APPLICATION FOR TAN WAS SIGNED AND VERIFIED BY THE CHIEF MANAGER OF THE ZONAL OFFICE, SBI, VISHAKHAPATNAM AND THE AO HAS NOT ONLY ACTED UPON IT BUT HAS ALSO PASSED CONSEQUENTIAL ORDERS AS WELL AS ISSUED D EMAND NOTICE IN THE NAME OF CHIEF MANAGER OF THE ZONAL BANK. 13 . THAT BEING THE FACT, IN OUR VIEW LD CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL S IN LIMINE ON THE GROUND THAT APPEAL PAPERS WERE SIGNED BY THE CHIEF MANAGER AND NOT BY THE MANAGING DIR ECTOR. IF WE ACCE PT THIS FINDING OF THE CIT( A) THEN DEMAND RAISED BY THE AO IN THE NAME OF CHIEF MANAGER WOULD ITSELF BECOME INVALID AND CANNOT BE ENFORCED. AT THIS STAGE, IT WILL BE APPROPRIATE TO LOOK INTO THE RELEVANT STATUTORY PROVISIONS ON THIS ISS UE. SECTION 246A O F THE I.T.ACT PROVIDES RIGHT OF APPEAL TO AN ASSESSEE BEFORE THE CIT(A) AGAINST CERTAIN ORDERS 10 AS ENUMERATED IN CLAUSES (A) TO (R) OF SECTION 246A(1). SUB - SECTION (1) OF SECTION 249 OF THE ACT PROVIDES THAT EVERY APPEAL TO BE FILED BEFORE THE CIT(A) SHALL BE VERIFIED IN THE PRESCRIBED MANNER. SUB - RULE (1) OF RULE 45 OF THE I.T. RULES PROVIDES THAT AN APPEAL TO COMMISSIONER (A) SHALL BE MADE IN FORM NO.35 AND SUB RULE (2) OF THE SAID RULE PROVIDES THAT THE FORM OF APPEAL , THE GROUND S OF APPEAL AND THE FORM OF VERIFICATION APPENDED THERETO RELATING TO AN ASSESSEE SHALL BE SIGNED AND VERIFIED BY THE PERSON WHO IS AUTHORIZED TO SIGN THE RETURN OF INCOME UNDER SECTION 140 OF THE I.T.A CT, 1961 AS APPLICABLE TO THE ASSESSEE .( EMPHASIS SUPPL IED BY US), SECTION 140 ( C ) PROVIDES THAT IN CASE OF A COMPANY THE RETURN IS TO BE SIGNED BY THE MD THE REOF OR WHERE FOR ANY UNAVOIDABLE REASON SUCH MD IS NOT ABLE TO SIGN AND VERIFY THE RETURN, OR WHERE THERE IS NO MANAGING DIRECTOR, BY ANY DIRECTOR, THE REOF. HOWEVER, THE PROVISO TO AFORESAID CLAUSE (C) AND MORE SPECIFICALLY CLAUSE (B) OF THE PROVISO PR OVIDES THAT WHERE THE MANAGEMENT OF THE COMPANY HAS BEEN TAKEN OVER BY THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT UNDER ANY LAW, THE RETURN OF THE COMPANY SHALL BE SIGNED AND VERIFIED BY THE PRINCIPAL OFFICER THEREOF. ON A CONJOINT READING OF THE AFORESAID S TATUTORY PROVISIONS, IT HAS TO BE ACCEPTED THAT IN CASE OF A GOVERNMENT CO MPANY, THE RETURN CAN BE SIGNE D AND VERIFIED BY THE PRINCIPAL OFFICER. THAT BESIDES, AS PER THE PROVISIONS OF REGULATION 76(1) OF SBI GENERAL REGULATIONS 1955 R.W.50 OF SBI ACT, 1 955, THE CHIEF MANAGER IS ALSO A COMPETENT PERSON TO SIGN RETURN AS WELL AS 11 VERIFICATION. THIS IS BECAUSE OF THE FACT THAT RULE 45 OF THE I.T.RULES ALSO PRESCRIBES THAT APPEAL MEMO CAN BE VERIFIED BY ANY PERSON WHO IS AUTHORIZED TO SIGN THE RETURN OF INCO ME AS APPLICABLE TO THE ASSESSEE. THEREFORE, IN OUR CONSIDERED VIEW THE CHIEF MANAGER, SBI, ZONAL OFFICE, VISAKHAPATNAM IS AUTHORIZED AND COMPETENT TO SIGN THE APPEAL MEMO AND LD CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL S IN LIMINE OF THE ASSESSEE . WE MAY FURTHER OBSERVE THAT LD CIT(A) HAS APPROACHED THE ENTIRE ISSUE IN A VERY NARROW TECHNICAL MANNER WHICH IS NOT IN THE INTEREST OF JUSTICE. ONE CANNOT ALSO LOSS SIGHT OF THE FACT THAT SBI IS THE LARGEST BANKING COMPANY IN THE COUNTRY HAVING NUMEROU S BRANCHES, RUNNING INT O THOUSAND S IN EVERY PART OF THE COUNTRY INCLUDING THE REMOTE AREAS. IT IS THEREFORE, NEITHER POSSIBLE NOR PRACTICABLE THAT APPEAL MEMOS IN EVERY CASE RELATING TO EVERY BRANCH HA S TO BE SIGNED BY THE MD ONLY. WE , THEREFORE, HOLD T HAT ASSESSEE S APPEALS COULD NOT BE DISMISSED IN LIMINE ON THE GROUND THAT IT IS NOT SIGNED AND VERIFIED BY THE AUTHORIZED PERSON. FOR THIS REASON, THE ORDERS PASSED BY LD CIT(A) DESERVES TO BE SET ASIDE AND, ACCORDINGLY, WE SET ASIDE THE ORDERS OF LD CIT (A). 14 . SINCE, WE HA VE SET ASIDE THE ORDER OF LD CI T(A), WE CONSIDER IT UN NECESSARY TO DEAL WITH THE ASPECT AS TO WHETHER THE AMENDMENT BROUGHT TO SECTION 246 A OF THE ACT INCLUDING THE DEDUCTOR AS A PERSON WHO ALSO CAN FILE AN APPEAL WILL APPLY RETROSPECTIVELY OR PROSPECTIVELY. THOUGH LD A.R. ALSO CONTENDED THAT THE DEMAND RAISED IS ALSO NOT SUSTAINABLE IN VIEW OF THE DECISION OF THE COORDINATE BENCH IN THE 12 CAS E OF BRANCH MANAGER, SBI GANAPAVRAM (SUPRA) BUT SINCE LD CIT(A) HAS DISMISSED THE APPEALS OF THE ASSESSEE IN LIMINE WITHOUT GOING INTO THE MERITS OF THE CASE, WE ARE NOT INCLINED TO DECIDE THE ISSUE ON MERITS AND CONSIDER IT APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF LD CIT(A) TO CONSIDER ASSESSEES APPEALS ON MERITS. 1 5 . IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 1 6 . SO FAR AS APPEALS FILED BY THE ASSESSEE IN I.T.A. NO S.11 &12/VIZ/2008 ARE CONCERNED , BESIDES THE MAIN GRO UNDS RAISED ON THE ISSUE OF DISMISSAL OF APPEAL IN LIMINE ON ACCOUNT OF ALLEGED NON - SIGNING OF APPEAL MEMO BY THE AUTHORIZED PERSON AS IS THE CASE IN ITA NO.15 & 16 ABOVE, ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND, WHICH READS AS UNDER: UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, LD CIT(A) IS NOT CORRECT IN NOT CONDONING THE DELAY OF 89 DAYS IN FILING THE APPEAL BEFORE HIM. 1 7 . IN THESE APPEALS, THE FACTS ARE IDENTI CAL TO THE FACTS IN I.T.A. NO.15 & 16 /VIZ/2008. ON A PERUSAL OF THE ORDER PASSED B Y THE CIT(A), WE FIND THAT APART FROM THE FACT THAT ONE OF THE REASONS FOR DISMISSING THE APPEALS IS APPEAL MEMO HAS NOT BEEN SIGNED BY THE AUTHORIZED PERSON, THE CIT(A) HAS ALSO DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND OF DELAY OF 89 DAYS IN FILING THE APPEAL S . 13 WHILE DOING SO, LD CIT(A) HAS STATED THAT SINCE THE ASSESSEE DID NOT FILE APPLICATION FOR CONDONATION OF DELAY AT THE TIME OF FILING THE APPEAL S BUT ONLY A FTER THE DEFECT WAS POINTED OUT. THE CIT(A) FURTHER OBSERVED THAT THE PETITION FOR CONDONATION OF DELAY SUPPORTED BY AN AFFIDAVIT WAS FILED BY THE ASSESSEE STATING THEREIN THAT THE CHIEF MANAGER OF THE ASSESSEE BANK BEING IGNORANT OF THE PROVISIONS OF LAW DID NOT KNOW WHAT FURTHER ACTION IS REQUIRED TO BE TAKEN AGAINST THE ORDER PASS ED UNDER SECTION 201(1) & 201(1A) OF THE ACT , HENCE HAS SOLICITED , WHICH RESULTED IN A DELAY OF 89 DAYS. THE CIT(A) DID NOT ACCEPT THE PLEA OF THE ASSESSEE BASICALLY FOR THE REASON THAT ASSESSEE HAD INITIALLY DID NOT FILE THE DELAY CONDONATION PETITION W ITH THE APPEAL PAPERS AND FURTHER THE CHIEF MANAGER OF THE BANK BEING A RESPONSIBLE OFFICER DEALING WITH FINANCIAL TRANSACTION HAVIN G SUBSTANTIAL LEGAL IMPLICATION, HE CANNOT TAKE THE PLEA OF IGNORANCE OF LAW REGARDING FILING OF APPEAL S AGAINST AN ORDER W HICH IS AGAINST THE BANK. THEREFORE, HE HELD THAT ASSESSEES APPEAL S ARE LIABLE TO BE DISMISSED AS NOT MAINTAINABLE . 1 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDER OF LD CIT(A) ON THIS ISSUE. 1 9 . ON PERUSAL OF THE ORDER OF THE CIT(A), IT HAS TO BE NOTED THAT LD CIT(A) HAS REFUSED TO CONDONE THE DELAY BASICALLY FOR THE REASON THAT ASSESSEE HAS NOT FILED DELAY CONDONATION PETITION AT THE TIME OF FILING THE APPEAL S AND ONLY AFTER A SHOW CAUSE NOTI CE WAS ISSUED, ASSESSEE HAS FILED CONDONATION PETITION SUPPORTED BY AN 14 AFFIDAVIT. THE CIT(A) OF COURSE HAS FURTHER HELD THAT THE REASON SHOWN FOR CONDONATION OF DELAY IS NOT ACCEPTABLE SINCE THE CHIEF MANAGER BEING A RESPONSIBLE OFFICER TAKING THE PLEA OF IGNORANCE OF LAW ON HIS PART CANNOT BE ACCEPTED. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES O F THE CASE, WE ARE OF THE CONSIDERED VIEW THAT NOT FILING THE DELAY CONDONATION PETITION AT THE TIME OF PRESENTATION OF APPEAL IS NOT FATAL AND CANN OT BY ITSELF BE A GROUND FOR NOT CONDONING THE DELAY. 20 . THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF STATE OF KARNATAKA VS NAGAPPA, AIR 1986 KANT 199, COPY OF WHICH HAS BEEN PLACED ON RECORD BEFORE US BY LD A.R. HAVE HELD AS UNDER: HENCE, IN OUR VIEW , MANDATORY SUBRULE (1) OF R.3A, THE OPERATION OF WHICH IS BEING DEALT WITH, HAS TO BE REGARDED BY A COURT BEFORE WHICH A TIME BARRED APPEAL IS PRESENTED, AS REQUIRING THAT COURT TO MAKE THE APPELLANT PRESENTING SUCH APPEAL, COMPLY WITH ITS REQUIREMENT BY AFFORDING HIM A REASONABLE OPPORTUNITY IN THAT REGARD AND TO HAVE RECOURSE TO DISMISSAL OF SUCH APPEAL AS NOT PROPERLY PRESENTED, ONLY WHEN THE APPELLANT DISREGARDS THE OPPORTUNITY SO AFFORDED. IT IS ALSO OUR VIEW THAT A TIME BARRED APPEAL, WHICH WAS ORIG INALLY PRESENTED DEFECTIVELY, BUT WHICH DEFECT IS REMEDIED (CURED) WITHIN THE TIME ALLOWED BY THE COURT, SHOULD BE REGARDED AS ONE PROPERLY PRESENTED AS ON THE DATE OF ITS ORIGINAL PRESENTATION, IN THAT, THE REMEDYING OF SUCH A PROCEDURAL DEFECT NECESSARIL Y RELATES BACK TO THE DATE OF ORIGINAL PRESENTATION OF THE APPEAL 21 . WE ALSO FEEL THAT LD CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE CAUSE SHOWN BY THE ASSESSEE IS NOT REASONABLE WITHOUT PROPERLY CONSIDERING ALL THE 15 ASPECTS OF THE ISSUE. AS CAN BE SE EN FROM THE FACTS ON RECORD, ASSESSEE WHILE EXPLAINING THE CAUSE OF DELAY HAS STATED THAT AS HE WAS NOT AWARE OF THE PROVISIONS OF LAW, COULD NOT DECIDE THE COURSE OF ACTION AGAINST THE ORDER PASSED UNDER SECTION 201(1) & 201(1A) OF THE ACT AND WAS AWAITIN G INSTRUCTION FROM HIS HEAD OFFICE. IN OUR VIEW, THIS IS A REASONABLE CAUSE FOR DELAY AS THE CHIEF MANAGER CANNOT BE EXPECTED TO NOW THE LEGAL IMPLICATIONS OF AN ORDER PASSED UNDER THE INCOME TAX ACT AND FURTHER HE CANNOT BY HIMSELF DECIDE THE FUTURE COURSE OF ACTION WITHOUT TAKING INSTRUCTIONS/APPROVAL OF THE HEAD OFFICE. IN THE AFORESAID VIEW OF THE MATTER, WE HOLD THAT LD CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT ASSESSEES APPEALS ARE LIABLE TO BE DISMISSED ON THE GROUND OF DELAY. SO FAR AS DISMIS SAL OF APPEALS BY THE CIT(A) ON THE GROUND OF NON - SIGNING OF APPEAL MEMO BY THE MD IS CONCERNED, IN VIEW OF OUR DECISION IN ASSESSEES APPEALS IN ITA NOS. 15 & 16 /VIZ/2008, WE HOLD THAT THE CIT(A) WAS NOT JUSTIFIED IN DISMISSING ASSESSEES APPEALS IN LIMI NE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A). 2 2 . SINCE LD CIT(A) HAS NOT DECIDED THE APPEALS ON MERITS, WE REMIT BACK THE APPEALS TO HIS FILE AND DIRECT HIM TO DECIDE THE APPEALS ON MERITS AFTER CONDONING THE DELAY . THE CIT(A) SHALL AFFORD A R EASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 2 3 . IN THE RESULT, APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 16 24 . TO SUM UP, ALL THE FOUR APPEALS FILED BY THE AS S ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 11 /12/2013 . SD/ - S D/ - (B.RAMAKOTAIAH ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER VISHAKHAPATNAM DATED 11 / 12/2013 PARIDA , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : CHIEF MANAGER, STATE BANK OF INDIA,ZONAL OFFICE,BALAJINAGAR,SIRIPURAM ROAD, VISAKHAPATNAM /CHIEF MANAGER, SBI, VENKATESWARMITTA BRANCH,VISAKHAPATNAM 2. THE RESPONDENT. : INCOME TAX OFFICER (TDS) - 2(2), WARD - 2 VISAKHAPATNAM 3. THE CIT(A) - 1, VISAKHAPATNAM 4. CIT (TDS), HYDERABAD 5. DR, ITAT, VISHAKHAPATNAM 6. GUARD FILE. BY ORDER SR.PS, ITAT, VISHAKHAPATNAM //TRUE COPY//