FORTUNE FINANCIAL SERVICES (I) LTD, MUMBAI V. ITO TDS WD 1(5), MUMBAI

ITA 3729/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1889 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: F
• Assessment Year: misc
• Appeal Filed On: 26-05-2014
• Court: TRIBUNAL
• Keywords: Principle of natural justice

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3729/MUM/2014 ASSESSMENT YEAR: 2008-09 M/S. FORTUNE FINANCIAL SERVICES (I) LTD. K.K. CHAMBERS, 2 ND FLOOR, SIR. P.T. MARG, FORT, MUMBAI -400001 / VS. ITO TDS WD 1(5) MUMBAI (ASSESSEE ) (REVENUE) P.A. NO. AAACF0610J / ASSESSEE BY SHRI VIJAY MEHTA (AR) / REVENUE BY SHRI SANTOSH MANKOSKAR (DR) ! ' # $ / DATE OF HEARING : 23/11/2015 # $ / DATE OF ORDER: 16/12/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-3, FORTUNE FINANCIAL SERVICES 2 MUMBAI {(IN SHORT CIT(A)}, DATED 28.03.2014 FOR T HE ASSESSMENT YEAR 2008-09, DECIDED AGAINST THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 201(1)/201(1A) OF THE ACT, ON THE FOLLOWING GROUNDS : '1.ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX, (APPEALS)-3, MUMBAI ERRED IN ASSESSING RS.12,01,781/- AS TDS INT EREST FINE DEMANDED. 2.ON THE FACTS AND IN THE CIRCUMSTANCES AND IN LAW AND IN THE INTEREST OF NATURAL JUSTICE THE HONOURAB LE COMMISSIONER OF INCOME TAX, (APPEALS)-3, MUMBAI HAS ERRED IN NOT ALLOWING APPELLANT SUFFICIENT TIME TO CURE DEFECTS STATED BY HIM VIDE ORDER SHEET DATED FRIDAY , MARCH 21, 2014 WHEREIN OPPORTUNITY ALLOWED BY CIT(A ) UP TO MONDAY MARCH 21, 2014 BEING TOO SHORT TIME FO R CORRECTION.' 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI VIJAY MEHTA, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI SANTOSH MANKOSKAR, DEPARTM ENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. IN THIS GROUND THE EFFECTIVE ISSUE RAISED BEFORE US IS THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE IN-LIMINIE ON THE GROUND THAT THERE WAS DEFECT IN THE APPEAL F ILED BY THE ASSESSEE. IT HAS BEEN ARGUED BY THE LD. COUNSEL THA T BY MISTAKE OF FORM NO.35 (I.E. APPEAL FROM) FILED BEFO RE LD. CIT(A) WAS SIGNED BY THE HEAD CORPORATE OFFICER AS MANAGIN G DIRECTOR WAS NOT AVAILABLE. THESE FACTS WERE POINTE D OUT TO THE ASSESSEE BY LD. CIT(A) VIDE ORDER SHEET ENTRY DATED 21.03.2004 AND THE NEXT DATE FOR RECTIFICATION OF THE DEFECT W AS GIVEN AS FORTUNE FINANCIAL SERVICES 3 24.03.2014. IT WAS SUBMITTED THAT EFFECTIVELY NO OP PORTUNITY WAS GIVEN BY THE LD. CIT(A) AND APPEAL WAS DISMISSE D. IT WAS PRAYED THAT IN CASE OPPORTUNITY IS GIVEN, THE ASSES SEE SHALL REMOVE THE DEFECT, AND SHALL ALSO SINCERELY ATTEND HEARING BEFORE LD. CIT(A). THE LD. COUNSEL HAS ALSO SUBMITT ED AN AFFIDAVIT CUM UNDERTAKING IN SUPPORT OF HIS PRAYER. RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDGMENTS FOR THE PROPOSITION THAT THE AFORESAID DEFECT IS CURABLE: (I) ACIT VS M/S. GTL TECHNOLOGY INVESTMENT LTD. (IT A NO. 879/MUM/2010 (II) M/S OXFORD INDUSTRIES LTD. (ITA NO.5548/MUM/20 09 DATED 15.09.2010 3.1. ON THE OTHER HAND, LD. DR HAS RELIED UPON THE ORDE RS OF LOWER AUTHORITIES. 3.2. WE HAVE GONE THROUGH THE ORDERS OF LOWERS AUTHORIT IES AS WELL AS SUBMISSIONS MADE BY BOTH THE SIDES. IT IS N OTED BY US THAT LD. CIT(A) HAS ADOPTED HIGHLY IRRESPONSIBLE AN D CASUAL APPROACH WHILE DISPOSING THE APPEAL. EFFECTIVELY, N O TIME WAS GIVEN TO THE ASSESSEE FOR REMOVAL OF THE DEFECT. TH E ASSESSEE HAS SUCCESSFULLY EXPLAINED THE REASON FOR NON APPEA RANCE BEFORE THE LD. CIT(A) ON 24.03.2014 WITH THE HELP O F AN AFFIDAVIT. IT IS FURTHER NOTED BY US THAT THE IMPUG NED DEFECT IN THE APPEAL MEMO WAS CURABLE AS HAS BEEN HELD IN THE JUDGMENTS RELIED UPON BY THE LD. COUNSEL. FORTUNE FINANCIAL SERVICES 4 3.3. IN THE CASE OF ACIT VS. GTL TECHNOLOGY INVESTMENT LTD.(SUPRA) THE HONBLE BENCH HELD AS UNDER: 5. WE FIND THAT THE APPEAL MEMO BEFORE THE LD. CIT (A) IS SIGNED BY ONE SHRI SANJAY O. BANG WHOSE DESIGNATION IS MENTIONED AS DY. COMPANY SECRETARY. EVEN THE VERIFICATION AS WELL AS GROUNDS OF APPEAL ARE ALSO SIGNED BY SHRI SANJAY O. BANG. AS PER THE RULES, THE APPEA L MEMO BEFORE THE LD. CIT (A) HAS TO BE SIGNED BY A PERSON AUTHORISED U/S.140 OF THE ACT WHO ARE COMPETENT TO SIGN THE RETURN OF INCOME. SO FAR AS COMPANY IS CONCERNE D, CLAUSE (C) TO SEC.140 READS AS UNDER: (C) IN THE CASE OF A COMPANY, BY THE MANAGING DIRE CTOR THEREOF, OR WHERE FOR ANY UNAVOIDABLE REASON SUCH MANAGING DIRECTOR IS NOT ABLE TO SIGN AND VERIFY TH E RETURN, OR WHERE THERE IS NO MANAGING DIRECTOR, BY ANY DIRE CTOR THEREOF PROVIDED THAT WHERE THE COMPANY IS NOT RE SIDENT IN INDIA, THE RETURN MAY BE SIGNED AND VERIFIED BY A PERSON WHO HOLDS A VALID POWER OF ATTORNEY FROM SUC H COMPANY TO DO SO, WHICH SHALL BE ATTACHED TO THE RE TURN 6. IT IS CLEAR FROM ABOVE PROVISION THAT THE MANAGI NG DIRECTOR IS AUTHORISED TO SIGN THE RETURN OR IN THE ABSENCE OF MANAGING DIRECTOR ANY OF THE DIRECTORS TO SIGN. IN THE PRESENT CASE, THE APPEAL MEMO VERIFICATION AND ITS GROUNDS OF APPEAL FILED BEFORE THE LD. CIT (A) ARE SIGNED B Y SHRI SANJAY O BANG IN THE CAPACITY OF AS DY. COMPANY SECRETARY. THE SEC.140 DOES NOT AUTHORISE DY. COMP ANY SECRETARY TO TO SIGN THE APPEAL WHICH IS TO BE FILE D BEFORE THE CIT (A). WE, THEREFORE, ACCEPT THE CONTENTION O F THE LD. FORTUNE FINANCIAL SERVICES 5 CIT DR THAT DY. COMPANY SECRETARY HAS NO AUTHORITY TO SIGN AND FILE THE APPEAL ON BEHALF OF PRESENT ASSES SEE COMPANY. AT THE SAME TIME, WE DID NOT ACCEPT THE FU RTHER CONTENTION OF LD. CIT(DR) THAT IT IS A SERIOUS ILLE GALITY. IN OUR OPINION, IT IS MERELY IRREGULARITY AND THAT CAN BE RECTIFIED. WE, ACCORDINGLY, SET ASIDE THE ORDER OF LD. CIT (A) AND RESTORE ENTIRE MATTER TO HIS FILE. THE LD. CIT (A) IS DIRECTED TO GIVE OPPORTUNITY TO THE ASSESSEE TO RECTIFY THE DEFECT AND THEN TO DISPOSE OFF THE APPEAL ON MERIT AS PER PROV ISIONS OF LAW AS ADMITTEDLY WHEN THE SAID APPEAL WAS DECIDED IT WAS NOT FILED BY PERSON AUTHORISED U/S.140 OF THE A CT. 3.4. SIMILARLY, IN THE CASE OF M/S. OXFORD INDUSTRIES L TD. (SUPRA), THE TRIBUNAL HELD AS UNDER: 7. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES O F THE CASE WE ARE OF THE VIEW THAT NOT SIGNING OF THE APP EAL MEMO BY THE MANAGING DIRECTOR SUFFERS FROM A CURABL E DEFECT WHICH MAY BE CURED BY THE ASSESSEE BY FILING THE RELEVANT APPEAL MEMO DULY SIGNED BY THE MANAGING DIRECTOR. THIS VIEW ALSO FINDS SUPPORT FROM THE JUD GEMENT OF HONBLE DELHI HIGH COURT IN BHARAT NIDHI LTD. VS . CIT (2008) 306 ITR 230 (DEL.) WHEREIN IT HAS BEEN HELD (HEADNOTE) : HELD, THAT A SECRETARY WAS OTHERWISE A PERSON WHO WAS COMPETENT TO SIGN DOCUMENTS ON BEHALF OF THE ASSESSEE WHICH WAS A COMPANY. THOUGH THE SECRETARY WAS NOT COMPETENT TO FILE A RETURN UNDER SECTION 140 OF THE ACT, FROM THE RECORDS AND AS FORTUNE FINANCIAL SERVICES 6 MENTIONED IN THE STATEMENT OF CASE, EVEN IN THE PAS T THE RETURNS OF THE ASSESSEE HAD BEEN FILED BY ITS SECRETARY. HOWEVER, THE MOMENT THE DEFECT WAS POINTED OUT TO THE ASSESSEE, A FRESH RETURN WAS FIL ED WHICH WAS SIGNED BY THE MANAGING DIRECTOR. FROM THE FACTS OF THE CASE, THERE COULD NOT BE ANY DOUBT WHATSOEVER THAT THE ASSESSEE HAD MADE AN ERROR WHICH WAS IN THE NATURE OF A DEFECT AND THAT DEFECT WAS REMOVED BY FILING A FRESH RETURN SIGNED BY THE MANAGING DIRECTOR OF THE ASSESSEE. THE RETURN WOULD THEN RELATE BACK TO THE ORIGINAL FILING DATE. SINCE THE LD. CIT(A) EXCEPT PROPOSING TO TREAT THE APPEAL AS INVALID, HAS NOT PROVIDED ANY SPECIFIC OPPORTUNITY TO REMOVE THE DEFECT, THEREFORE, WE ARE OF THE VIEW TH AT THE MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD . CIT(A) AND SEND BACK THE MATTER TO HIS FILE WHO SHALL PROV IDE A REASONABLE OPPORTUNITY TO THE ASSESSEE TO REMOVE TH E DEFECT AND SHALL DECIDE THE APPEAL AFRESH AND ACCOR DING TO LAW. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFOR E, ALLOWED. 3.5. THEREFORE, KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTANCES AND THE LEGAL POSITION AS DISCUSSED A BOVE, WE SEND THIS APPEAL BACK TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO PROVIDE THE ASSESSEE AN OPPORTUNITY TO RECTIFY THIS DEFECT. THE LD. CIT(A) SHALL DISPOSE THIS APPEAL ON MERITS AFTER FORTUNE FINANCIAL SERVICES 7 GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE SHALL ALSO EXTEND REQUISITE COOPERATION TO LD. CIT( A) 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2015. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER ! ' MUMBAI; & DATED : 16/12/2015 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ()* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. - - ! . ( ( ) / THE CIT, MUMBAI. 4. - - ! . / CIT(A)- , MUMBAI 5. 12 +3 , - ($ 3 4 , ! ' / DR, ITAT, MUMBAI 6. 5 ' / GUARD FILE. / BY ORDER, ,1( + //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! ' / ITAT, MUMBAI