DCIT 22(2), NAVI MUMBAI V. SUDHIR VASU SHETTY, MUMBAI

ITA 6967/MUM/2011

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3278 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 29-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: LOVE KUMAR
• Section: 45(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BE NCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER / I .TA NO.1075/MUM/2011 ( / ASSESSMENT YEAR: 2002-03 M/S. SPECTRUM COAL AND POWER LTD., (FORMERLY M/S. ST-CLI COAL WASHERIES LTD), MCH NO. 6-3-1089/1/1, FLAT NO. 203, PAVANI AVENUE, RAJBHAVAN ROAD, SOMAJIGUDA, HYDERABAD-500 082 ANDHRA PRADESH / VS. THE ACIT, CIRCLE 1(3), AAYAKAR BHAVAN, MUMBAI-400 020 ./ ./ PAN/GIR NO. AABCS 9860J ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI SALIL KAPOOR / RESPONDENT BY: SHRI LOVE KUMAR / DATE OF HEARING :21.01.2016 !' / DATE OF PRONOUNCEMENT :29 .01.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE LD. CIT(A)-2, MUMBAI DATED 29.11.2010 PERTAINI NG TO ASSESSMENT YEAR 2002-03. ITA NO. 1075/M/2011 2 2. THE FIRST GRIEVANCE OF THE ASSESSEE IN ITS APPEA L IS THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATIN G THE REASON FURNISHED BY THE APPELLANT FOR SIGNING THE APPEAL M EMO BY THE DIRECTOR ARE GENUINE AND BONAFIDE. HE FURTHER CON TENDED THAT THE LD. CIT(A) ERRED IN DECIDING THE APPEAL ON THE BASI S OF TECHNICAL OBJECTIONS RAISED RATHER THAN DECIDING THE APPEAL O N MERITS. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON THE TECHNICAL GROUND HOLDING THAT FORM NO. 35 IN THE GROUNDS OF A PPEAL IS NOT VALID FOR THE REASON THAT THEY WERE SIGNED BY THE DIRECTO R INSTEAD OF MANAGING DIRECTOR OF THE ASSESSEE COMPANY. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE LD. CIT(A) IS NOT JUSTIFI ED BY DISMISSING THE APPEAL OF THE ASSESSEE ON TECHNICAL GROUND HOLDING THAT THE MANAGING DIRECTOR HAS NOT SIGNED THE APPEAL MEMO ON THE GROU NDS OF APPEAL THEREFORE THE APPEAL IS NOT A VALID APPEAL. 3.1. ON IDENTICAL SITUATION IN ASSESSEES OWN CASE THE TRIBUNAL FOR THE ASSESSMENT YEARS 2000-01, 2001-02 AND 2002-03 I N ITA NOS. 3778, 3779 AND 3780 OF 2010 DATED 21.11.2011 SET AS IDE THE ORDER PASSED BY THE LD. CIT(A) AND REMANDED BACK THE MATT ER TO HIS FILE TO DECIDE THE APPEAL ON MERIT. COPY OF THE ORDER IS PL ACED ON RECORD. 3.2. ON CAREFUL CONSIDERATION OF THE CO-ORDINATE BE NCH ORDER IN ASSESEES OWN CASE WE FIND THAT THE CO-ORDINATE BEN CH FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF TILAKNAGAR INDUSTRIES LTD REMITTED THE MATTER TO THE FILE OF T HE LD. CIT(A) TO DECIDE THE APPEAL ON MERIT. THE CO-ORDINATE BENCH OF THE TRIBUNAL WHILE HOLDING SO HELD AS UNDER: ITA NO. 1075/M/2011 3 ON APPEAL BEFORE THE LD. CIT(A), THE LD. CIT(A) OB SERVED THAT THE FORM OF APPEAL, STATEMENT OF FACTS AND GRO UNDS OF APPEAL REVEALED THAT THE SAME HAVE BEEN SIGNED AND VERIFIE D BY THE DIRECTOR OF THE COMPANY, WHEREAS AS PER RULE 45(2) AND SECTION 140(C), THE SAME HAS TO BE SIGNED BY THE MANAGING D IRECTOR OF THE COMPANY. ACCORDINGLY, A SHOW CAUSE NOTICE WAS GIVEN BY THE LD. CIT(A) ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 3 PROPOSING TO TREAT THE APPEAL AS INVALID. IN RESPONSE, THE ASSESSEE FILED DETAILED WRITTEN SUBMISSIONS. IT WAS , INTER ALIA, SUBMITTED THAT THE MG. DIRECTOR OF THE COMPANY WAS TRAVELLING TO VARIOUS SITES OF THE COMPANY AND HENCE HE COULD NOT SIGN THE APPEAL. IN SUPPORT, RELIANCE WAS ALSO PLACED ON THE DECISION IN THE CASE OF PRIME SECURITIES LTD. REPORTED IN 28 DTR 11 9 (BOM) AND REMFRY & SONS REPORTED IN 276 ITR 1 (DEL). THE LD. CIT(A), WHILE DISTINGUISHING THE DECISIONS RELIED ON BY THE ASSES SEE, DID NOT ACCEPT THE ASSESSEES EXPLANATION. HE OBSERVED THAT WHAT THE ASSESSEE IS STATING IS A MATTER OF CONVENIENCE WH ICH CAN NEITHER SUPERSEDE NOR BYPASS THE REQUIREMENT OF LAW. FIRSTL Y, IF THIS WAS A BONA FIDE CONTENTION, THIS FACT OUGHT TO HAVE BEEN MENTIONED IN THE APPEAL DOCUMENTS, WHICH IS NOT THERE, THEREFORE, TH E CONTENTION IS AN AFTERTHOUGHT. MOREOVER, NO EVIDENCE OF TRAVELLIN G OF MG. DIRECTOR HAS BEEN FILED. WHETHER ON THE DATE ON WHI CH THE VERIFICATION HAS BEEN DONE, THE MG. DIRECTOR WAS NO T IN TOWN OUGHT TO HAVE BEEN BROUGHT ON RECORD. EVEN IF THE MG.DIRE CTOR WAS NOT IN TOWN, AT THIS POINT OF TIME , THE ASSESSEE HAD SUFF ICIENT TIME STILL LEFT FOR FILING THE APPEAL I.E. 7 DAYS, THEREFORE, THE UNAVOIDABLE REASONS MENTIONED IN SEC. 140 OF THE ACT IS NOT AT TRACTED AND, ACCORDINGLY, HE TREATED THE APPEAL AS NOT A VALID A PPEAL AND DISMISSED THE SAME. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUN DS THE VALIDITY OF THE ORDER PASSED BY THE LD. CIT(A) IN HOLDING THE A PPEAL TO BE NON- EST AND NOT VALID WITHOUT PROVIDING SUFFICIENT OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE AND SUSTENANCE OF PENALTY IMP OSED BY THE AO. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE AS SESSEE, AT THE OUTSET, SUBMITS THAT ON SIMILAR FACTS AND CIRCU MSTANCES OF THE CASE, THE HONBLE ITA NOS. 3778 TO 3780/M/2010 SPEC TRUM COAL & POWER LTD. 4 JURISDICTIONAL HIGH COURT IN THE CASE OF TILAKNAGAR INDUSTRIES LTD. VS. CIT & ORS. [WRIT PETITION NO.(L ) 2792 & ITA NO. 1075/M/2011 4 2793/2010 DATED 14-12-2010], HAS QUASHED THE ORDER OF THE LD. CIT(A) AND REMANDED BACK THE APPEAL TO THE FILE OF THE LD. CIT(A) FOR DECISION ON MERITS IN ACCORDANCE WITH LAW. HE A LSO PLACED ON RECORD COPY OF THE SAID JUDGMENT. HE FURTHER SUBMIT S THAT IN THIS CASE THE DATE OF HEARING BEFORE THE LD. CIT(A) WAS FIXED FOR 03-02- 2010.THE ASSESSEE SOUGHT ADJOURNMENT ON THE GROUND THAT THE QUANTUM APPEALS AGAINST THE ASSESSMENT ORDER U/S.14 3(3) ARE PENDING BEFORE THE LD. CIT(A). THEREFORE, IT WAS RE QUESTED TO KEEP THE HEARING OF THE APPEAL IN ABEYANCE TILL THE QUAN TUM APPEALS ARE DISPOSED OF. HE FURTHER SUBMITS THAT AS PER PROVISI ONS OF SEC. 140 OF THE ACT, IN CASE IF THE MG. DIRECTOR OF THE COMPANY IS NOT ABLE TO SIGN THE APPEAL DOCUMENTS, IT CAN BE SIGNED BY ANY DIRECTOR THEREOF. HE, THEREFORE, SUBMITS THAT THERE IS NO DE FAULT ON THE PART OF THE ASSESSEE AND, THEREFORE, THE ORDER PASSED BY THE LD. CIT(A) BE SET ASIDE AND THE MATTER MAY BE RESTORED BACK TO HIS FILE TO DECIDE THE APPEAL AFRESH. ON THE OTHER HAND, THE LD. D.R. SUPPORTS THE ORDER OF THE LD. CIT(A). WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF TH E RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT BEFORE THE LD. CIT(A) THE ASSESSEE IN SUPPORT HAS A LSO RELIED ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF PRIME SECURITIES LTD. (SUPRA). THE LD. CIT(A), WHIL E DISTINGUISHING THE DECISION, HELD IN PARA 14 OF HIS ORDER THAT THE DECISION OF HONBLE BOMBAY HIGH COURT REQUIRES A FRESH LOOK IN A PROPER PERSPECTIVE. IN THIS REGARD, IT IS NECESSARY TO TAK E NOTE OF THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN TH E CASE OF ITA NOS. 3778 TO 3780/M/2010 SPECTRUM COAL & POWER LTD. 5 NATIONAL TEXTILE CORPORATION LTD. (M.P.) VS. CIT (2 011) 338 ITR 371 (M.P.) WHEREIN IT HAS BEEN HELD (HEADNOTE) : HELD ACCORDINGLY, THAT THE TRIBUNAL HAD NO JURISDICTION TO COMMENT UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT AND IN PARTICULAR THE MANNER IN WHICH IT WAS RENDERED NOR HAD JURISDICTIO N TO IGNORE THE DECISION. IT WAS FOR THE REASON THAT, FIRSTLY, IT WAS A DECISION RENDERED BY THE JURISDIC TIONAL HIGH COURT. SECONDLY, THE TRIBUNAL WAS FUNCTIONING IN THE SAME STATE AND SUBORDINATE TO THE HIGH COURT. THIRDLY, THE TRIBUNAL HAD NO JURISDICTION TO HOLD T HAT ITA NO. 1075/M/2011 5 THE DECISION OF THE HIGH COURT WAS PER INCURIAM. THOUGH THE TRIBUNAL DID NOT SAY SO IN SO MANY WORDS IN EFFECT IT AMOUNTED TO SUCH A DECLARATION. FOURTH LY, THE TRIBUNAL HAD ALSO NO JURISDICTION TO FIND FAULT WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT SO AS TO AVOID ITS BINDING EFFECT. WE FURTHER FIND THAT THE ISSUE BEFORE US IS SQUAR ELY COVERED BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF TILAKNAGAR INDUSTRIES LTD. (SU PRA) WHEREIN IT HAS BEEN OBSERVED AND HELD AS UNDER : 1. THESE TWO PETITIONS ARE FILED AGAINST THE ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) WHEREBY THE APPEALS FILED BY THE PETITION ER AGAINST THE REGULAR ASSESSMENT ORDERS HAVE BEEN DISMISSED ON THE GROUND THAT THE APPEAL MEMO WAS NOT SIGNED BY THE AUTHORIZED OFFICER OF THE PETITIO NER- COMPANY. 2. THIS COURT IN THE CASE OF PRIME SECURITIES LIMITED V/S. VARINDER MEHTA, ASSISTANT COMMISSIONER OF INCOME-TAX REPORTED IN (2009) 317 ITR 27 (BOM) AND COMMISSIONER OF CUSTOMS V/S. CANNON SHIPPING COMPANY PRIVATE LIMITED REPORTED IN 250 ITR 347 HAS HELD THAT SIGNING OF THE APPEAL MEMO BY A PERSON NO T AUTHORIZED IS ONLY AN IRREGULARITY AND THE SAME CAN BE RECTIFIED. ALTHOUGH, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS TRIED TO DISTINGUISH THE JUDGMENT OF THIS COURT IN THE CASE OF PRIME SECURITIES LIMITED (SUPR A), WE SEE NO MERIT IN SUCH DISTINCTION SOUGHT TO BE MA DE. IN THIS VIEW OF THE MATTER, THE LEARNED COUNSEL FOR THE REVENUE FAIRLY STATES THAT THE IMPUGNED ORDERS BE QUASHED AND SET ASIDE AND THE APPEALS BE REMANDED BACK TO THE COMMISSIONER OF INCOME TAX (APPEALS) ON MERITS IN ACCORDANCE WITH LAW. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE REVENUE, WE, RESPECTFULLY FOLLOWIN G THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT ( SUPRA) AND THE OTHER DECISIONS CITED THEREIN, SET ASIDE TH E ORDER PASSED BY THE LD. CIT(A) AND REMAND BACK THE MATTER TO HIS FILE TO DECIDE THE APPEAL ON MERITS IN ACCORDANCE W ITH LAW ITA NO. 1075/M/2011 6 AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, TH EREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSES. RESPECTFULLY FOLLOWING THE SAID ORDER OF THE TRIBU NAL IN ASSESEES OWN CASE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE AP PEAL ON MERITS IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2016. SD/- SD/- (RAJESH KUMAR) (C.N. PRASAD ) # / ACCOUNTANT MEMBER %&# /JUDICIAL MEMBER MUMBAI; )# DATED : 29 TH JANUARY, 2016 . & . ./ RJ , SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. +,- &&./ , ./' , / DR, ITAT, MUMBAI 6. -012 / GUARD FILE. / BY ORDER, +& //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI