MSTC Ltd., Kolkata V. DCIT, CIR-3, KOLKATA, Kolkata

ITA 545/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0963 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SLLONG YADEN
• Assessee Lawyers: J L RAHA
• Keywords: Principle of natural justice
• Section: 45(2)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.544-545/KOL/2016 ASSESSMENT YEARS:2005-06 & 2007-08 MSTC LTD., 225C, AJC BOSE ROAD, 2 ND FLOOR, KOLKATA-20 [ PAN NO.AACCM 0021 E ] / V/S . CIT(A)-I, AAYAKAR BHWAN, KOLKATA /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI J.L RAHA, CA ! /BY REVENUE SHRI SLLONG YADEN, ADDL. CIT-DR /DATE OF HEARING 26-10-2017 /DATE OF PRONOUNCEMENT 17-11-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEAL BY THE ASSESSEE ARE DIRECTED AGAINST TH E DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA OF EVEN DATE I.E. 27.01.2016. ASSESSMENTS WAS FRAMED BY DCIT, CIRCLE-3(1), KOLKAT A U/S 143(3)/147/251 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE THEIR ORDERS DATED 26.11.2012 AND 08.01.2015 FOR ASSESSMENT YEARS 2005 -06 & 2007-08. SHRI J.L. RAHA, LD. AUTHORIZED REPRESENTATIVE APPEA RED ON BEHALF OF ASSESSEE AND SHRI SALLONG YADEN, LD. DEPARTMENTAL REPRESENTATIVE APPE ARED ON BEHALF OF REVENUE. ITA NO.544-545/KOL/2016 A.YS. 0 5-06 & 07-08 MSTC LTD. VS. CIT(A)-I KOL PAGE 2 2. THE ASSESSEE HAS RAISED THE COMMON GROUNDS IN BO TH THE APPEAL, THE FOLLOWING GROUNDS ARE REPRODUCED IN ITA NO. 544/KOL/2016 FOR A.Y. 2005-06L :- 1. THAT YOUR APPELLANT COMPANY, A PSU UNDER MINIST RY OF STEEL, GOVT. OF INDIA HAS THREE FULL TIME DIRECTORS INCLUDING MANAG ING DIRECTOR. SINCE MOST OF THE TIME THEY REMAIN BUSY WITH INTERACTING WITH THE MINISTRY AT NEW DELHI, GENERAL MANAGER (FINANCE) WAS GIVEN A GENERAL POWER TO ACT ON BEHALF OF THEM FOR SIGNING, VERIFICATION OF ANY DOCUMENT AND ON THE STRENGTH OF THIS POWER GM(F) HAS SIGNED THE APPEAL PETITION. 2. THAT THE AUTHORIZED SIGNATORY (GM, FINANCE) AS P ER GENERAL POWER USED TO SIGN SUCH DOCUMENTS AND BEING ACCEPTED BY DIFFERENT GOVT. DEPARTMENTS INCLUDING INCOME TAX DEPARTMENT SINCE LONG AND BEIN G ACCEPTED BY REVENUE SINCE LONG INCLUDING THE LD. CIT(A). THOUGH, THIS I S DEFINITELY A DEPARTURE FROM THE STATUTE BUT HAVING NO REVENUE IMPACT YOUR APPEL LANT PRAYS BEFORE YOUR HONOUR TO KINDLY GO BY THE MERIT OF THE CASE AND CO NDONE THE TECHNICAL DEFECT AND ALLOW US AN OPPORTUNITY TO RATIFY THE APPEAL PE TITION FOR HEARING OF THE CASE BEFORE CIT(A). 3. THAT YOUR APPELLANT CRAVES LEAVE TO STATE FURTHE R GROUNDS AT THE TIME OF HEARING OF THE CASE, BEFORE YOUR HONOUR. 3. SINCE COMMON GROUNDS ARE INVOLVED IN BOTH THE AP PEALS, THEREFORE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. FIRST WE TAKE UP ITA NO.544/KOL/2016 FOR A.Y. 05-06 . 4. THE INTER-RELATED COMMON ISSUES RAISED IN THIS A PPEAL IS THAT LD CIT(A) ERRED IN REJECTING THE APPEAL FILED BY THE ASSESSEE ON THE G ROUND THAT THE APPEAL WAS NOT SIGNED BY THE DIRECTOR/ MANAGING DIRECTOR OF THE ASSESSEE- COMPANY. 5. AT THE OUTSET IT WAS OBSERVED THAT THE APPEAL ME MO FILED BY THE ASSESSEE IN FORM NO. 35 WAS NOT SIGNED BY THE DIRECTOR/ MANAGIN G DIRECTOR OF THE COMPANY AS PER THE PROVISION OF SECTION 140(C) OF THE ACT AND 45(2) OF INCOME TAX RULE 1962. THE APPEAL FORM WAS SIGNED BY THE AGM TAXATION WHO WAS NOT THE DIRECTOR OF THE ASSESSEE-COMPANY. THE LD CIT(A) WAS OF THE VIEW THA T THE APPEAL MEMO SHOULD HAVE BEEN SIGNED BY THE DIRECTOR/ MANAGING DIRECTOR OF T HE COMPANY BUT THE ASSESSEE HAS FAILED TO DO SO. ACCORDINGLY, THE LD CIT(A) HELD TH AT THE APPEAL FILED BY THE ASSESSEE IS NON-EST . 5.1 HOWEVER THE LD. AR FOR THE ASSESSEE BEFORE US S UBMITTED THAT LD. CIT(A) HAS RIGHTLY ADOPTED THE 45(2) RULE OF INCOME TAX RULE 1 962 BUT FOR SOME PRACTICAL ITA NO.544-545/KOL/2016 A.YS. 0 5-06 & 07-08 MSTC LTD. VS. CIT(A)-I KOL PAGE 3 DIFFICULTY THE ASSESSEE COULD NOT MEET THE REQUIREM ENT. FIRST AS THIS IS A GOVT. OF INDIA UNDERTAKING UNDER MINISTRY OF STEEL GOVT. OF INDIA AND ALL THE DIRECTOR(S) RE- NOMINATED BY THE HON'BLE PRESIDENT OF INDIA. THE AS SESSEE-COMPANY HAS THREE WHOLE TIME DIRECTORS INCLUDING CHAIRMAN-CUM-MANAGING DIRE CTOR. ALL OTHER DIRECTOR(S) ARE FROM DIFFERENT INDUSTRIES AND GOVT. DEPARTMENTS STA TIONED ALL OVER INDIA. AGAIN, AS THE CHAIRMAN-CUM-MANAGING DIRECTOR AND OTHER TWO WHOLE TIME DIRECTORS HAD TO INTERACT WITH THE MINISTRY AT NEW DELHI AND DIFFERENT BRANCH ES/UNITS OF THE COMPANY ALLOVER INDIA THEIR AVAILABILITY IS BIT UNCERTAIN. DUE TO T HIS UNCERTAINTY A GENERAL POWER OF ATTORNEY (ANNEXURE-B) WAS GIVEN TO GENERAL MANAGER FINANCE BY THE CHAIRMAN-CUM- MANAGING DIRECTOR TO ENSURE COMPLIANCE WITH ALL STA TUTORY REQUIREMENTS AND TO ACT UPON ON HIS BEHALF. IT IS FURTHER TO BRING THE TRIB UNAL THAT IN PAST SEVERAL CASES (ANNEXURE-3 TO G) INCLUDING 1 ST APPEAL AGAINST ORIGINAL ASSESSMENT ORDER (ANNEXURE - D) OF THE CITED YEAR WAS DISPOSED OFF UNDER THE SIG NATURE OTHER THAN DIRECTOR. SOME ALIKE CASE MATERIALS AND THE CORRESPONDING ORDER OF LD. CIT(A) OF THE ASSESSEE IS PLACED INN ANNEXURE-1 AS INSTANCES. FROM SUCH INSTA NCES THE ASSESSEE HAS CONCEIVED THAT LD. CIT(A) HAS GOT SOME DISCRETIONARY POWER TO ACT UPON APPEAL PETITION SIGNED BY DULY AUTHORIZED PERSON OF CHAIRMAN-CUM-MANAGING DIRECTOR. ACCORDINGLY, IN RESPONSE TO THE NOTICE OF LD. CIT(A) FOR NON-COMPLI ANCE OF RULE 45(2) THE ASSESSEE RESUBMITTED THE SAME APPEAL PETITION WITH SIGNATURE OF AUTHORIZED OFFICER OF CHAIRMAN- CUM-MANAGING DIRECTOR. CONSIDERING THE PRACTICAL DI FFICULTY AND ALSO PRECEDENCE THE ASSESSEE PAYS FOR CONDONING THE COMPLIANCE OF RULE 45(2) OF THE I.T RULES, 1962 AND ALLOWING HEARING ON CITED APPEAL PETITION WITH A CO PY OF SAME APPEAL PETITION BEARING SIGNATURE OF CHAIRMAN-CUM-MANAGING DIRECTOR OR ANY OTHER DIRECTOR. 6. ON THE OTHER HAND, LD DR SUBMITTED THAT THE LD. CIT(A) GRANTED OPPORTUNITY TO THE ASSESSEE TO RECTIFY THE MISTAKE BUT ASSESSEE FA ILED TO DO. THEREFORE, NO FURTHER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE. HE VE HEMENTLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. 7. AFTER HEARING THE CONTENTIONS OF BOTH THE PARTIE S AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE OBSERVE THAT THE ASSESSEE H AS AGREED TO RECTIFY THE DEFECT AS POINTED OUT BY THE LD CIT(A). THEREFORE, IN THE INT EREST OF NATURAL JUSTICE AND FAIR PLAY WE FEEL THAT THE ASSESSEE DESERVES ONE MORE OPPORTU NITY TO RAISE ITS CONTENTIONS BEFORE ITA NO.544-545/KOL/2016 A.YS. 0 5-06 & 07-08 MSTC LTD. VS. CIT(A)-I KOL PAGE 4 THE LD. CIT(A). IN THIS VIEW OF ABOVE PROPOSITION, WE ARE INCLINED TO RESTORE THE ISSUE TO THE FILE OF LD CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW. CONSEQUENTLY, THIS GROUND OF APPEAL RAISED BY THE A SSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. COMING TO ITA NO.545/KOL/2016 FOR A.Y. 2007-08 . 9. SINCE THE FACTS ARE EXACTLY IDENTICAL, BOTH THE PARTIES WERE AGREED WHATEVER VIEW IS TAKEN IN THE ABOVE APPEAL (ITA NO. 544/KOL/ 2016) MAY BE TAKEN IN THIS APPEALS ALSO, WE HOLD ACCORDINGLY. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 11. IN COMBINE RESULT, FOR STATISTICAL PURPOSE, BOTH TH E APPEAL OF ASSESSEE ARE TREATED AS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 17/11/2017 SD/- SD/- ( ( !) ( !) (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S * - 17/11/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-MSTC LTD., 225C, AJC BOSE ROAD, 2 ND FLOOR, KOLKATA-20 2. ! / REVENUE-CIT(A)-I, AAYAKR BHWAN, KOLKATA 3. - . / CONCERNED CIT 4. . - / CIT (A) 5. / ((- , - / DR, ITAT, KOLKATA 6. 3 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY HEAD OF OFFICE/DDO -,