COMMISSIONER OF INCOME TAX (CENTRAL)-1 versus NRA IRON & STEEL PVT. LTD. MISCELLANEOUS APPLICATION NO. 814 OF 2019 IN on 25 October 2019

1106

[2019] 13 S.C.R.

APRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-1

v.

NRA IRON & STEEL PVT. LTD.

Miscellaneous Application No. 814 of 2019

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IN

(Civil Appeal No. 2463 of 2019)

OCTOBER 25, 2019

[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]

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Practice and Procedure – Notice of SLP – Service of –Applicant-company sought to re-call Judgment passed by theSupreme Court on the ground that the applicant-company was notserved with the notice of the SLP – Acknowledgment receipt in therecord showed one ‘SN’, chartered accountant of the applicant-Dcompany had received dasti notice on 13.12.2018 – ‘SN’ submittedthat he bonafide believed that the documents were “some incometax return documents from the Income Tax Department” and furthersubmitted that he was suffering from an advanced stage of cataractand had undergone a surgery in both eyes on 04.01.2019 andE23.01.2019 – Applicant-company contended that ‘SN’ was not the‘principal officer’ of the applicant and hence service could nothave been effected upon him – Held: ‘SN’ admittedly was the powerof Attorney holder of the applicant for the A.Y. 2009-10 and wasthe agent of the assessee-company and hence notice could be servedon him as the agent of the assessee-company in the present case –F‘SN’ did not disclose as to when the envelope containing dasti noticewas opened – Further, submission of ‘SN’ that dasti notice from theSupreme Court was considered by him as to be ‘some income taxreturn documents’ lacked credibility – Dasti notice was served onhim on 13.12.2018, which was much prior to his surgery – He hadGsufficient time to inform the applicant of the proceedings – Also,‘SN’ had appeared before the Income Tax Authorities to representthe applicant on various dates prior to his surgery – Therefore, nocredible or cogent grounds for re-call of judgment made out –Applicant was duly served through authorised representative.

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Dismissing the Miscellaneous application, the Court HELD: 1. ‘SN’, a Chartered Accountant admittedly beingthe Power of Attorney holder of the Applicant for the A.Y. 2009 –10 was the agent of the Assesse – Company, and hence Noticecould be served on him as the agent of the Assessee – Companyin this case. [Para 12][1111-F]

2. The ground taken by ‘SN’ that even though Notice wasserved on 13.12.2018, he assumed that they were “some IncomeTax Return Documents” lacks credibility. It is difficult to acceptthat the envelope containing the dasti Notice from this Court wasconsidered to be “some Income Tax Return documents”. Thedeponent does not at all disclose as to when the envelopecontaining the dasti Notice was ever opened. Furthermore, theground urged that the Chartered Accountant was suffering froman advanced stage of cataract, and hence was constrained frominforming his clients is again not worthy of credence. The dastiNotice was admittedly served on him on 13.12.2018 at his office,which was much prior to his surgery which he states took placeon 04.01.2019. ‘SN’ had sufficient time to inform the Applicant –Company of the proceedings, prior to his surgery. Furthermore,‘SN’ appeared before the Income Tax Authorities to representthe Applicant – Company and its sister concerns on various datesprior to his surgery i.e. on 14.12.2018, 21.12.2018, 28.12.2018and 29.12.2018. [Para 13][1111-G; 1112-A-C]

3. Keeping in view the above-mentioned facts andcircumstances, this Court is satisfied that the Applicant –Company was duly served through their authorizedrepresentative, and were provided sufficient opportunities toappear before this Court, and contest the matter. The Applicant– Company chose to let the matter proceed ex-parte. The groundsfor Re-call of the Judgment are devoid of any merit whatsoever.[Para 14][1112-D]

State of Rajasthan v. Basant Nehata (2005) 12 SCC 77: [2005] 3 Suppl. SCR 1 – relied on.

Case Law Reference

[2005] 3 Suppl. SCR 1

relied on

Para 12

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ACIVIL APPELLATE JURISDICTION: Miscellaneous ApplicationNo. 814 of 2019 in Civil Appeal No. 2463 of 2019.

From the Judgement and Order dated 26.02.2018 of the HighCourt of Delhi at New Delhi in ITA No. 244 of 2018.

ANS Nadkarni, ASG, Sidharth Luthra, Sr. Adv., Ms. Ranjana RoyBGawai, Ms. Vasudha Sen, Ujjwal Jain, Ms. Divya Roy, Ms. PraveenaGautam, D. L. Chidanand, Ms. Anil Katiyar, Advs. for the appearingparties.

The Judgment of the Court was delivered by INDU MALHOTRA, J.C

C1. The present Application has been filed for Re-call of theJudgment dated 05.03.2019 passed by this Court in C.A. No. 2463 of2019, on the ground that theApplicant – Company was not served withthe Notice of the SLP at the registered office of the Company, nor wasa copy of the SLP served on the Applicant – Company. Consequentially,since the Judgment was passed ex-parte, the Applicants prayed for Re-Dcall of the Judgment and a de novo hearing.

2. The Applicants submit that the Court Notices were sent to theearlier registered office address of the Applicant – Company i.e. at 310,3[rd] Floor, B-Block, International Trade Tower, Nehru Place, New Delhi.However, on 19.05.2014, the Applicant – Company changed its registeredEoffice to 211, Somdutt Chambers II, 9, BhikajiCama Place, New Delhi –110066.

Thereafter, on 23.01.2019, the registered office was again changedto 1205, Cabine No. 1, 89 Hemkunt Chambers, Nehru Place, New Delhi.

3. The Applicants submit that they learnt of the Judgment datedF05.03.2019 passed by this Court from a news clipping published in theEconomic Times on 07.03.2019. Subsequently, the Application for re-call was filed on 12.03.2019.

4. The Applicant – Company submits that on an inspection of thecourt record, they learnt that the Affidavit of dasti service filed by theRevenue – Department on 19.12.2018, showed an acknowledgmentGreceipt by Mr. Sanjeeva Narayan, the Chartered Accountant of theApplicant – Companyon 13.12.2018.

5. The Applicant – Company placed on record the Affidavit ofMr. Sanjeev Narayan – Chartered Accountant, wherein he has statedthat he was the authorized representative of the Respondent – CompanyHbefore the Income Tax Authorities but was not engaged before the High Court, or the Supreme Court. The Chartered Accountant further submitsthat he had received service on 13.12.2018 from one of the Inspectorsof the Income Tax Department,but he bona fide believed that thedocuments were “some Income Tax Return documents from IncomeTax Department.”

The Chartered Accountant further submits that he was sufferingfrom an advanced stage of cataract, and had undergone a surgery inboth the eyes on 04.01.2019 and 23.01.2019 respectively.

6. The Applicant – Company during oral arguments submittedthat Mr. Sanjeev Narayan – Chartered Accountant was representingthe Applicant – Company in all its cases, as also the sister concernsincluding M/s. Tata Steel BSL Ltd. (earlier known as Bhushan SteelLtd.) before the Income Tax Authorities, and continues to represent theApplicant – Company even as on date.

7. This Court vide Order dated 19.08.2019, called for the originalrecord from the Income Tax Appellate Tribunal and the Delhi High Court.

In the meanwhile, the Department was granted time to file theirobjections.

8. The Department in the Counter Affidavit submitted that thedasti Notice was duly served on Mr. Sanjeev Narayan at his officeaddress, in his capacity as the authorized representative of the Applicant– Company, who was holding a Power of Attorney of the Assessee –Company for the A.Y. 2009 – 10. The Power of Attorney appoints allfour partners of the firm i.e. Mr. Mohan Lal, Advocate, Mr. AshwaniKumar, Chartered Accountant, Mr. Sanjeev Narayan, CharteredAccountant and Mr. Surender Kumar, FCA as their Counsel, andauthorizes them to represent the Applicant – Company at all stages ofthe proceedings. The Power of Attorney executed by the Applicant –Company in favour of Mr. Sanjeev Narayan was placed on record.

9. It was further submitted on behalf of the Revenue that eventhough Mr. Sanjeev Narayan has stated that he underwent the cataractsurgery on 04.01.2019 and 23.01.2019, this was much after the Noticehad been served on 13.12.2018. Hence, there was ample time for him toinform his clients of the pendency of the proceedings.

10. It was further submitted that Mr. Sanjeev Narayan hadappeared before the Tax Authorities after the date of service on13.12.2018, and prior to his surgery, to represent the Applicant – Company A

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Aand its sister concerns on 14.12.2018, 21.12.2018, 28.12.2018 and29.12.2018.

In these circumstances it was pointed out that there was no meritin the contention raised by the Applicant – Company, and hence no groundwas made out to Re-call the Judgment and Order dated 05.03.2019Bpassed by this Court.

11. We have heard the learned Counsel for the parties and perusedthe record.

This Court in C.A. No. 2463 of 2019, issued Notice to the Assessee- Applicant vide Order dated 12.11.2018. Since dasti service wasCeffected on 13.12.2018 on the Applicant – Company, the matter waslisted on 02.01.2019. However, none appeared on behalf of the Applicant– Company. The Court further adjourned the matter by two weeks, andposted the case on 18.01.2019, when it was ordered that in case theApplicant – Company chooses not to enter appearance, the matter wouldDbe proceeded ex-parte.The matter was, thereafter, listed on 23.01.2019,when the following Order was passed:

“Notice was issued in the matter on 12.11.2018, Office reportdated 22.12.2018 indicated that notice was served upon thesole Respondentbut none had entered appearance. By orderEdated 02.01.2019, last opportunity was given to theRespondent and it was indicated that if the Respondent chose-not to enter appearance, the matter would be disposed of exparte. Even then none has entered appearance.Having gonethrough the matter, we give one more opportunity to theRespondent to enter appearance and make submissions withFrespect to the merits of the matter. If the Respondent stillchooses not to appear, the matter shall definitely be decided”ex-parte.

The Applicant – Company remained unrepresented despite serviceGon its authorised representative, on 31.01.2019, and on 05.02.2019, whenthe matter was taken up for final hearing, and judgment was reserved.

12. During oral hearing on the Re-call Application, a submissionwas made by the Counsel for the Applicant – Company that Mr. SanjeevNarayan was not the “principal officer” of the Applicant – Company,Hand henceservice could not have been effected upon him.

Section 2(35) defines “principal officer” as follows :

“2. In this Act, unless the context otherwise requires,—

”(35) “principal officer, used with reference to a localauthority or a company or any other public body or anyassociation of persons or anybody of individuals, means—

(a) the secretary, treasurer, manager or agent of theauthority,company, association or body, or

(b) any person connected with the management oradministration of the local authority, company, associationor body upon whom the Assessing Officer has served a noticeof his intention of treating him as the principal officerthereof;”

The term ‘agent’would certainly include a power of attorney holder.In State of Rajasthan v. Basant Nehata[1] this Court held that:

“A grant of power of attorney is essentially governed byChapter X of the Contract Act. By reason of a deed of powerof attorney, an agent is formally appointed to act for theprincipal in one transaction or a series of transactions or tomanage the affairs of the principal generally conferringnecessary authority upon another person.A deed of powerof attorney is executed by the principal in favour of the agent.”

Mr. Sanjeev Narayan admittedly being the Power of Attorneyholder of the Applicant – M/s. NRA Iron & Steel Pvt. Ltd. for the A.Y.2009 – 10 was the agent of the Assesse – Company,and hence Noticecould be served on him as the agent of the Assessee – Company in thiscase.

13. The ground taken by Mr. Sanjeev Narayan that even thoughNotice was served on 13.12.2018, he assumed that they were “someIncome Tax Return Documents” lacks credibility. It is difficult to acceptthat the envelope containing the dastiNotice from this Court was A

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Aconsidered to be “some Income Tax Return documents”. The deponentdoes not at all disclose as to when the envelope containing the dastiNotice was ever opened.

Furthermore, the ground urged that the Chartered Accountantwas suffering from an advanced stage of cataract, and hence wasBconstrained from informing his clients is again not worthy of credence.The dastiNotice was admittedly served on him on 13.12.2018 at hisoffice,which was much prior to his surgery which he states took placeon 04.01.2019. Mr. Narayan had sufficient time to inform the Applicant– Company of the proceedings,prior to his surgery.

CFurthermore, Mr. Narayan appeared before the Income TaxAuthorities to represent the Applicant – Company and its sister concernson various dates prior to his surgery i.e. on 14.12.2018, 21.12.2018,28.12.2018 and 29.12.2018.

14. Keeping in view the above-mentioned facts and circumstances,Dthis Court is satisfied that the Applicant – Company was duly servedthrough their authorized representative, and were provided sufficientopportunities to appear before this Court, and contest the matter. TheApplicant – Company chose to let the matter proceed ex-parte. Thegrounds for Re-call of the Judgment are devoid of any merit whatsoever.

E15. The Applicant – Company having failed to make out anycredible or cogent ground for Re-call of the judgment dated 05.03.2019,the Application for Re-call is dismissed with no order as to costs.

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Ankit Gyan

M.A. dismissed.

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