Haryana State Roads and Bridges Development Corporation Ltd., Panchkula V. DCIT, Panchkula

ITA 582/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6743 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 15-02-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 13-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Section: 45(2); 139

Judgement Text

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, CIT DR DATE OF HEARING :10.10.2017 DATE OF PRONOUNCEMENT :24.10.2017 ORDER PER ANNAPURNA GUPTA, A.M. : THIS APPEAL FILED BY THE ASSESSEE HAS BEEN PREFERRE D AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS), PANCHKULA (HEREINAFTER REFERRED TO AS CIT(APPEALS)) RELATING TO ASSESSMENT YEAR 2012-13 . 2. GROUND NO.1 RAISED BY THE ASSESSEE READS AS UNDE R: 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX (APPEALS), PANCHKULA IS DEFECTIVE BOTH IN LAW AND FACTS OF THE CASE. 3. THE ABOVE GROUND BEING GENERAL IN NATURE NEEDS N O ADJUDICATION. 4. GROUND NO.2 RAISED BY THE ASSESSEE READS AS UNDE R: 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) 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 APPE AL IN THE PRESCRIBED FORM ACCORDING TO THE RULE 45 OF THE INCOME TAX RULES AS DONE IN THE PAST. 2 5. THE ASSESSEE IN THE ABOVE GROUND HAS CHALLENGED DISMISSAL OF THE APPEAL BY THE LD.CIT(APPEALS) FOR THE REASON THAT THE APPEAL FILED WAS NOT MAINTAINABLE I N LAW SINCE THE VERIFICATION IN THE APPEAL MEMO WAS SIGNE D BY UNAUTHORIZED PERSON. 6. BRIEFLY STATED, DURING THE APPELLATE PROCEEDINGS , THE LD.CIT(APPEALS) NOTED ON PERUSAL OF THE MEMORANDUM OF APPEAL IN FORM NO.35 THAT THE VERIFICATION IN FORM DID NOT MENTION ANY NAME AND FURTHER THAT IT WAS SIGNED BY EXECUTIVE ENGINEER OF THE ASSESSEE COMPANY. THE LD.CIT(APPEALS) NOTED THAT THE APPEAL WAS NOT VERIF IED IN ACCORDANCE WITH RULE 45(2) OF INCOME TAX RULES, 196 2 WHEREIN IT WAS TO BE SIGNED AND VERIFIED BY A PERSO N WHO IS AUTHORIZED TO SIGN THE RETURN OF INCOME U/S 140 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), WHICH IN THE CASE OF A COMPANY IS THE MANAGING DIRECTOR AND IN THE AB SENCE OF MANAGING DIRECTOR BY ANY DIRECTOR AUTHORIZED TO VERIFY THE RETURN. THE SAME WAS CONFRONTED TO THE ASSESSE E VIDE SHOW CAUSE NOTICE DATED 11.3.2016, IN RESPONSE TO W HICH THE ASSESSEE SUBMITTED THAT THE NAME OF THE SIGNING PERSON HAD NOT BEEN MENTIONED DUE TO TYPOGRAPHICAL ERROR O R OMISSION AND FURTHER HIS NAME IS SHRI S.P. SIROHA, WHO DURING THE YEAR WAS THE GENERAL MANAGER OF THE ASS ESSEE COMPANY. IT WAS FURTHER STATED THAT HE WAS AUTHORI ZED BY THE MANAGING DIRECTOR, SHRI MAHESH KUMAR AND EXECUT IVE DIRECTOR SHRI K.B. NARANG. THE LD.CIT(APPEALS) REF USED TO ACCEPT THE ASSESSEES CONTENTION SINCE THE APPEAL W AS NOT 3 ACCOMPANIED BY ANY EVIDENCE AND NO UNAVOIDABLE REAS ON FOR NOT SIGNING BY THE MANAGING DIRECTOR WAS GIVEN. HE THEREFORE HELD THAT THE APPEAL REMAINED UNVERIFIED AS PER THE PROVISIONS OF THE ACT AND, THEREFORE, IT WAS NO T MAINTAINABLE IN LAW. FOR THE ABOVE REASONS, THE AP PEAL WAS DISMISSED BY THE LD.CIT(APPEALS). 7. THE RELEVANT FINDINGS OF THE LD.CIT(APPEALS) AT PARA 2.7 OF THE ORDER ARE REPRODUCED AS UNDER: 2.7 IN VIEW OF ABOVE FACTS AND JUDICIAL PRONOUNCEME NTS ON RELEVANT PROVISIONS OF THE ACT, IT IS FOUND THAT THE APPEAL U/S 246A BEFORE THE COMMISSIONER (APPEALS) IS REQUIRED TO B E FILED IN THE PRESCRIBED FORM NO. 35, AND THE SAME IS TO B E SIGNED BY THE PERSON SPECIFIED IN SUB RULE (2) OF RULE 45. AS PER SUB RULE(2)OFRULE45,THEPRESCRIBED FORM OF APPEAL, THE G ROUNDS OF APPEAL AND THE FORM OF VERIFICATION APPENDED THE RETO, ARE REQUIRED TO BE SIGNED AND VERIFIED BY THE PERSO N WHO IS AUTHORIZED TO SIGN THE RETURN OF INCOME U/S 140O FTHEACT.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 DIREC TOR IS NOT ABLE TO SIGN AND VERIFY THE RETURN OR WHERE THERE IS NO MA NAGING DIRECTOR, BY ANY DIRECTOR THEREOF. THEREFORE, THE PE RSON WHO IS THE MANAGING DIRECTOR OF THE COMPANY, OR ITS DIRECT OR 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 C URE DEFECTS IF AO ISSUES NOTICE U/S 139(9) BUT NO SUCH PROVISIO N 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 COMPAN Y WHO WAS NEITHER MANAGING DIRECTOR NOR DIRECTOR OF THE C OMPANY ON THE SIGNED DATE WHEN THE PRESENT APPEAL WAS FILED. ALTHOUGH, THERE IS NO PROVISION FOR AUTHORIZING ANY OTHER PER SON FOR SIGNING THE APPEAL MEMO EVEN THEN, AS STATED IN RESPONSE TO SH OW CAUSE NOTICE, NO SUCH AUTHORIZATION WAS ALSO FILED ALONG WITH THE APPEAL MEMO OR EVEN DURING ANY LATER STAGE OF APPELLA TE PROCEEDINGS. THEREFORE, IN THE ABSENCE OF APPEAL VER IFIED 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. BEFORE US, THE LD. COUNSEL FOR ASSESSEE CONTENDE D THAT ADEQUATE OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE TO FILE 4 EVIDENCE OF AUTHORIZATION OF THE EXECUTIVE ENGINEER TO SIGN THE APPEAL FORM BY THE DIRECTOR OF THE COMPANY AND ALSO TO STATE THE REASONS FOR NOT SIGNING THE APPEAL BY THE DIRECTOR OF THE COMPANY. THE LD. COUNSEL FOR ASSESSEE DREW OUR ATTENTION TO THE FACT THAT IT WAS ONLY AT THE FAG E ND OF THE APPELLATE PROCEEDINGS THAT THIS ISSUE WAS BROUGHT T O THE NOTICE OF THE ASSESSEE. THE LD. COUNSEL FOR ASSESS EE POINTED OUT THAT THE APPELLATE ORDER WAS PASSED ON 15.3.2016 AND THIS ISSUE OF THE APPEAL NOT BEING MAINTAINABLE IN LAW FOR THE AFORESAID REASONS WAS P OINTED OUT TO THE ASSESSEE ONLY ON 11.3.2016. THEREFORE, VIRTUALLY ONLY 4 DAYS WERE GIVEN TO THE ASSESSEE FOR RESPOND. THE LD.COUNSEL STATED THAT THERE WERE REASONS FOR NON- COMPLYING WITH THE PROVISIONS OF RULE 45(2) R.W.S.1 40 OF THE ACT, BUT IN THE ABSENCE OF ADEQUATE OPPORTUNITY THE SAME COULD NOT BE SUBMITTED TO THE LD.CIT(APPEALS). THE LD. COUNSEL FOR ASSESSEE PRAYED THAT THE MATTER BE REST ORED TO THE LD.CIT(APPEALS) FOR GIVING OPPORTUNITY TO THE A SSESSEE TO ADDRESS THE ISSUE. THE LD. COUNSEL FOR ASSESSEE AL SO STATED THAT AT THE TIME OF FILING OF APPEAL NO DEFECT NOTI CE WAS ISSUED TO THE ASSESSEE IN THIS REGARD AND, THEREFOR E, ALSO IT SKIPPED THE ATTENTION OF THE ASSESSEE. THE LD. COU NSEL FOR ASSESSEE PRAYED THAT IN THE INTEREST OF NATURAL JUS TICE THE APPEAL BE RESTORED TO THE LD.CIT(APPEALS) TO GIVE F RESH OPPORTUNITY OF HEARING AND TO GIVE OPPORTUNITY TO C URE THE DEFECT. 5 9. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE LD.CIT(APPEALS). 10. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES. UNDOUBTEDLY, THE LD.CIT(APPEALS) HAD DISMISSED ASSE SSEES APPEAL SINCE THE APPEAL FORM WAS NOT PROPERLY VERIF IED AS PRESCRIBED BY RULE 45(2) OF THE INCOME TAX RULES R. W.S.140 OF THE ACT WHICH REQUIRES THE SAME TO BE SIGNED BY THE MANAGING DIRECTOR OF THE COMPANY WHILE IT WAS SIGNE D BY A PERSON WHOSE NAME WAS ALSO NOT MENTIONED IN THE APP EAL FORM. IT IS ALSO AN UNDISPUTED FACT THAT WHEN THE APPEAL WAS FILED NO DEFECT NOTICE WAS ISSUED TO THE ASSESS EE AND IT WAS ONLY ON 11.03.2016, DURING APPELLATE PROCEEDING S, THAT THE ASSESSEE WAS CONFRONTED WITH THE SAME. THEREFO RE, IT IS PROBABLE THAT THE ASSESSEE REMAINED UNAWARE OF THE DEFECT ALL ALONG AND IT WAS ONLY 11.3.2016 THAT IT BECAME AWARE OF THE SAID DEFECT AND FILED A REPLY MENTIONING THE NA ME OF THE PERSON WHO HAD SIGNED THE FORM AND STATING THAT THE SAID PERSON HAD BEEN AUTHORIZED BY THE MANAGING DIRECTOR OF THE COMPANY TO DO SO. WITHOUT GIVING ANY FURTHER OPPOR TUNITY TO THE ASSESSEE TO FILE EVIDENCE IN THIS REGARD, TH E LD.CIT(APPEALS), WE FIND, DISMISSED THE ASSESSEES APPEAL. 11. IN VIEW OF THE ABOVE FACTS, WE ARE IN AGREEMENT WITH THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT ADEQUATE OPPORTUNITY TO ADDRESS THE DEFECT IN THE APPEAL FOR M FILED BY THE ASSESSEE WAS NOT GIVEN TO THE ASSESSEE NOR WAS ADEQUATE OPPORTUNITY GIVEN TO EXPLAIN THE REASON FO R THE DEFECT. IN VIEW OF THE SAME, WE CONSIDER IT FIT TO RESTORE THE 6 APPEAL DENOVO TO THE FILE OF THE LD.CIT(APPEALS) TO BE DECIDED AFRESH ON THE ISSUE OF NON-MAINTAINABILITY OF THE APPEAL ALONGWITH THE OTHER GROUNDS RAISED, AFTER GI VING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24 TH 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