NUCLEAR POWER CORPORATION OF INDIA LTD, MUMBAI V. ADDL. C.I.T,RANGE 3(2), MUMBAI

ITA 572/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8626 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-11-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 28-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAKHI AGRAWAL
• Section: 45(2)

Judgement Text

I.T.A NO.572/ MUM/2009 NUCLEAR POWER CORPORATION OF INDIA LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. [ CORAM: D.MANMOHAN, V.P. AND PRAMOD KUMAR, AM ] I.T.A NO.572/ MUM/2009 ASSESSMENT YEAR: 2005-06 NUCLEAR POWER CORPORATION OF INDIA LTD. ,. RESP ONDEN T CENTRE-1, WORLD TRADE CENTRE, 16 TH FLOOR, CUFFE PARADE, MUMBAI-05. PA NO.AAACN 3154 F VS DY.COMMISSIONER OF INCOME TAX 3(2) .. APPELLANT AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. APPEARANCES: NARESH KUMAR BALODIA FOR THE REVENUE RAKHI AGRAWAL, FOR THE ASSESSEE ORDER PER PRAMOD KUMAR: 1. THIS IS AN APPEAL FILED BY THE ASSESSEE, A PUBLI C SECTOR UNDERTAKING, AND IS DIRECTED AGAINST CIT(A)S ORDER DATED 18 TH NOVEMBER, 2008, FOR THE ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS DULY OBTAINED PERMISSION OF THE COMMITTEE ON DISPUTES (CABINET SECRETARIAT), IN TERMS OF HONBLE SUPREME COURTS DIRECTIONS IN THE CASE OF ONGC VS COLLECTOR OF CENTRAL EXCISE (104 CTR 31), T O PURSUE THIS APPEAL. 2. WHEN THIS APPEAL CAME UP FOR HEARING ON 27 TH JANUARY, 2010, IT WAS POINTED OUT TO THE LEARNED COUNSEL THAT THE APPEAL IS NOT D ULY SIGNED AND VERIFIED BY THE I.T.A NO.572/ MUM/2009 NUCLEAR POWER CORPORATION OF INDIA LTD 2 MANAGING DIRECTOR OF THE ASSESSEE COMPANY, AS REQU IRED UNDER SECTION 140(C) OF THE INCOME TAX ACT, 1961, AND THE ASSESSEE WAS REQUIRED TO REMOVE THIS DEFECT. PURSUANT TO THE DIRECTIONS OF THE BENCH, A DEFECT M EMO DATED 3 RD MAY 2010 WAS ALSO ISSUED BY THE REGISTRY. HOWEVER, INSTEAD OF REMOVI NG THE DEFECT AND FILING FRESH FORM 36, DULY SIGNED AND VERIFIED BY THE MANAGING D IRECTOR, THE ASSESSEE, VIDE LETTER DATED 18 TH MAY 2010, INTER ALIA SUBMITTED AS FOLLOWS: AS PER THE AFORESAID LETTER, IT IS MENTIONED THAT T HE APPEAL FILED BY THE COMPANY FOR THE AFORESAID ASSESSMENT YEAR IS DEFECT IVE SINCE FORM NO.36 IS NOT SIGNED BY THE MANAGING DIRECTOR. IN THIS CONNECTION, WE WOULD LIKE TO MENTION THAT F ORM NO.36 AND GROUNDS OF APPEAL FOR THE AFORESAID ASSESSMENT YEAR IS SIGNED BY DIRECTOR (FINANCE) OF THE COMPANY, MR J.K.GHAI. THE CHAIRMAN AND MANAGIN G DIRECTOR OF THE COMPANY, HAS GIVEN AUTHORITY TO DIRECTOR (FINANCE) OF THE COMPANY TO SIGN THE DOCUMENTS RELATING TO ALL TAXATION MATTERS OF T HE COMPANY. A COPY OF LETTER OF AUTHORITY (LOA) IN FAVOUR OF DIRECTOR (FI NANCE) IS ENCLOSED HEREWITH. IN VIEW OF ABOVE AND AS DISCUSSED WITH YOUR HONOUR, WE REQUEST YOUR HONOUR TO KINDLY CONSIDER FORM NO.36 AND GROUNDS OF APPEAL FILED WITH THE ITAT ON 28 JANUARY 2009, WHICH WAS SIGNED BY DIRECT OR (FINANCE) AS VALID DOCUMENTS AND NOT TO TREAT THE APPEAL FILED BY THE COMPANY AS DEFECTIVE. 3. TODAY, WHEN THE MATTER CAME UP FOR HEARING, IT W AS POINTED OUT TO THE LEARNED COUNSEL THAT THE DEFECT POINTED OUT BY THE TRIBUNAL IS YET TO BE REMOVED AND A FRESH FORM 36, SIGNED AND VERIFIED IN THE PRESCRI BED MANNER, HAS NOT YET BEEN FILED. SHE, HOWEVER, INVITED OUR ATTENTION TO LETTER DATED 18 TH MAY 2010 FILED BY THE ASSESSEE, AND SUBMITTED THAT THE DIRECTOR (FINANCE) , HAVING BEEN DELEGATED THE AUTHORITY FOR SIGNING ALL DOCUMENTS RELATING TO TAX ATION MATTERS, WAS DULY AUTHORISED TO SIGN AND VERIFY THE APPEAL. 4. WE ARE UNABLE TO SEE ANY MERITS IN THE APPROACH SO ADOPTED BY THE ASSESSEE. INSTEAD OF COMPLYING WITH A REQUISITION TO ADHERE T O THE LEGAL PROVISIONS REGARDING FILING OF APPEALS, THE ASSESSEE HAS ADOPTED A DEFIA NT ATTITUDE, AND CONTENDED THAT THE RESPONSIBILITIES REGARDING SIGNING OF ALL TAXATION RELATED DOCUMENTS IS DELEGATED TO THE DIRECTOR (FINANCE), AND THAT, FOR THIS REASON, FORM 36 SIGNED BY THE DIRECTOR I.T.A NO.572/ MUM/2009 NUCLEAR POWER CORPORATION OF INDIA LTD 3 (FINANCE) SHOULD NOT BE REJECTED BY THE TRIBUNAL. T HIS PLEA IS NOT CORRECT. UNDER RULE 47(2) R.W. R 45(2) OF THE INCOME TAX RULES, A FORM 36, I.E. APPEAL TO THE TRIBUNAL, IS TO BE SIGNED AND VERIFIED BY A PERSON WHO IS AUT HORISED TO SIGN THE RETURN OF INCOME UNDER SECTION 140 OF THE INCOME TAX ACT, 196 1. AS TO WHO CAN SIGN THE INCOME TAX RETURN IN THE CASE OF COMPANIES, THE LA W IS FREE OF ANY AMBIGUITY AND IT PRESCRIBES THAT IN THE CASE OF A COMPANY, BY THE MANAGING DIRECTOR THEREOF, OR WHERE FOR ANY UNAVOIDABLE REASON SUCH MANAGING DIRE CTOR IS NOT ABLE TO SIGN AND VERIFY THE RETURN, OR WHERE THERE IS NO MANAGING DI RECTOR, BY ANY DIRECTOR THEREOF. HONBLE CALCUTTA HIGH COURT, IN THE CASE OF NATIONA L INSURANCE CO LTD VS CIT (213 ITR 462), HAS OBSERVED AS FOLLOWS : SECTION 140(C) PROVIDES THAT IN THE CASE OF A COMPA NY THE RETURN OF INCOME SHALL BE SIGNED BY THE MANAGING DIRECTOR THEREOF, OR WHER E FOR ANY UNAVOIDABLE REASON SUCH MANAGING DIRECTOR IS NOT ABLE TO SIGN AND VERI FY THE RETURN, BY ANY DIRECTOR THEREOF. THUS, IT IS OBLIGATORY ON THE COMPANY TO H AVE ITS RETURN SIGNED AND VERIFIED BY THE MANAGING DIRECTOR THEREOF AND ONLY IN CASE WHERE FOR ANY UNAVOIDABLE REASON SUCH MANAGING DIRECTOR IS NOT AB LE TO SIGN AND VERIFY THE RETURN, ANY OTHER DIRECTOR OF THE COMPANY CAN SIGN AND VERIFY THE RETURN. 5. IT IS THUS CLEAR THAT, UNDER THE LAW AS IT EXIST S, A FORM 36 CAN ONLY BE SIGNED BY THE MANAGING DIRECTOR OF A COMPANY, OR, WHERE THERE IS NO MANAGING DIRECTOR OR WHEN MANAGING DIRECTOR CANNOT, FOR SOME UNAVOIDABLE REAS ONS, SIGN OR VERIFY THE FORM, BY ANY DIRECTOR OF THE COMPANY. THE DELEGATION OF POWERS TO SIGN ALL THE TAXATION RELATED DOCUMENTS IS THUS DEVOID OF ANY LEGALLY SUSTAINABL E BASIS. A DIRECTOR OF THE COMPANY CAN SIGN THE INCOME TAX RETURN OF THE COMPANY ONLY IN T HE CIRCUMSTANCES SPECIFIED IN SECTION 140(C), AND BUT THEN ASSESSEES CASE IS NOT OF BEIN G COVERED BY THESE EXCEPTIONS, AND IT SIMPLY RESTS ON THE DELEGATION OF THESE DUTIES BY M ANAGING DIRECTOR TO ONE OF THE DIRECTORS. IT IS ONLY ELEMENTARY THAT A DUTY CAST BY THE LAW CANNOT BE DELEGATED TO ANYONE, AND SUCH A DELEGATION OF DUTIES IS CONTRARY TO THE SCHEME OF THE INCOME TAX ACT. I.T.A NO.572/ MUM/2009 NUCLEAR POWER CORPORATION OF INDIA LTD 4 6. FOR THE REASONS SET OUT ABOVE, AND HAVING NOTED THAT THE ASSESSEE HAS DECLINED TO COMPLY WITH OUR REQUISITION TO COMPLY WITH LEGAL PR OVISIONS REGARDING SIGNING AND VERIFICATION OF APPEAL, WE REJECT THE APPEAL AS NOT MAINTAINABLE. 7. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUN CED IN THE OPEN COURT TODAY ON 8 TH DAY OF FEBRUARY, 2011. SD/- (D.MANMOHAN ) (VICE PRESIDENT) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 8 TH FEBRUARY, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),III, MUMBA I 4. COMMISSIONER OF INCOME TAX, -3, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI