Principal Commissioner of Income Tax (Central) - 1 Vs. NRA Iron & Steel Pvt. Ltd.
[M.A. No. 814 of 2019 in Civil Appeal No. 2463 of 2019]
INDU MALHOTRA, J.
1. The present Application has been filed for Recall of the Judgment dated 05.03.2019 passed by this Court in C.A. No. 2463 of 2019, on the ground that the Applicant - Company was not served with the Notice of the SLP at the registered office of the Company, nor was a copy of the SLP served on the Applicant - Company. Consequentially, since the Judgment was passed exparte, the Applicants prayed for Recall of the Judgment and a de novo hearing.
2. The Applicants submit that the Court Notices were sent to the earlier registered office address of the Applicant - Company i.e. at 310, 3rd Floor, BBlock, International Trade Tower, Nehru Place, New Delhi. However, on 19.05.2014, the Applicant - Company changed its registered office to 211, Somdutt Chambers II, 9, Bhikaji Cama Place, New Delhi - 110066. Thereafter, on 23.01.2019, the registered office was again changed to 1205, Cabine No. 1, 89 Hemkunt Chambers, Nehru Place, New Delhi.
3. The Applicants submit that they learnt of the Judgment dated 05.03.2019 passed by this Court from a news clipping published in the Economic Times on 07.03.2019. Subsequently, the Application for recall was filed on 12.03.2019.
4. The Applicant - Company submits that on an inspection of the court record, they learnt that the Affidavit of dasti service filed by the Revenue - Department on 19.12.2018, showed an acknowledgment receipt by Mr. Sanjeeva Narayan, the Chartered Accountant of the Applicant - Company on 13.12.2018.
5. The Applicant - Company placed on record the Affidavit of Mr. Sanjeev Narayan - Chartered Accountant, wherein he has stated that he was the authorized representative of the Respondent - Company before the Income Tax Authorities but was not engaged before the High Court, or the Supreme Court. The Chartered Accountant further submits that he had received service on 13.12.2018 from one of the Inspectors of the Income Tax Department, but he bona fide believed that the documents were "some Income Tax Return documents from Income Tax Department." The Chartered Accountant further submits that he was suffering from an advanced stage of cataract, and had undergone a surgery in both the eyes on 04.01.2019 and 23.01.2019 respectively.
6. The Applicant - Company during oral arguments submitted that Mr. Sanjeev Narayan - Chartered Accountant was representing the Applicant - Company in all its cases, as also the sister concerns including M/s. Tata Steel BSL Ltd. (earlier known as Bhushan Steel Ltd.) before the Income Tax Authorities, and continues to represent the Applicant - Company even as on date.
7. This Court vide Order dated 19.08.2019, called for the original record from the Income Tax Appellate Tribunal and the Delhi High Court. In the meanwhile, the Department was granted time to file their objections.
8. The Department in the Counter Affidavit submitted that the dasti Notice was duly served on Mr. Sanjeev Narayan at his office address, 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 all four partners of the firm i.e. Mr. Mohan Lal, Advocate, Mr. Ashwani Kumar, Chartered Accountant, Mr. Sanjeev Narayan, Chartered Accountant and Mr. Surender Kumar, FCA as their Counsel, and authorizes them to represent the Applicant - Company at all stages of the 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 even though Mr. Sanjeev Narayan has stated that he underwent the cataract surgery on 04.01.2019 and 23.01.2019, this was much after the Notice had been served on 13.12.2018. Hence, there was ample time for him to inform his clients of the pendency of the proceedings.
10. It was further submitted that Mr. Sanjeev Narayan had appeared before the Tax Authorities after the date of service on 13.12.2018, and prior to his surgery, to represent the Applicant - Company and its sister concerns on 14.12.2018, 21.12.2018, 28.12.2018 and 29.12.2018. In these circumstances it was pointed out that there was no merit in the contention raised by the Applicant - Company, and hence no ground was made out to Recall the Judgment and Order dated 05.03.2019 passed by this Court.
11. We have heard the learned Counsel for the parties and perused the 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 was effected on 13.12.2018 on the Applicant - Company, the matter was listed on 02.01.2019. However, none appeared on behalf of the Applicant - Company. The Court further adjourned the matter by two weeks, and posted the case on 18.01.2019, when it was ordered that in case the Applicant - Company chooses not to enter appearance, the matter would be proceeded exparte. 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 report dated 22.12.2018 indicated that notice was served upon the sole Respondent but none had entered appearance. By order dated 02.01.2019, last opportunity was given to the Respondent 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 gone through the matter, we give one more opportunity to the Respondent to enter appearance and make submissions with respect to the merits of the matter. If the Respondent still chooses not to appear, the matter shall definitely be decided exparte."
The Applicant - Company remained unrepresented despite service on its authorised representative, on 31.01.2019, and on 05.02.2019, when the matter was taken up for final hearing, and judgment was reserved.
12. During oral hearing on the Recall Application, a submission was made by the Counsel for the Applicant - Company that Mr. Sanjeev Narayan was not the "principal officer" of the Applicant - Company, and hence service 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 local authority or a company or any other public body or any association of persons or anybody of individuals, means- (a) the secretary, treasurer, manager or agent of the authority, company, association or body, or (b) any person connected with the management or administration of the local authority, company, association or body upon whom the Assessing Officer has served a notice of his intention of treating him as the principal officer thereof ;"
The term 'agent' would certainly include a power of attorney holder. In State of Rajasthan v. Basant Nehata1 this Court held that : "A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent."
Mr. Sanjeev Narayan admittedly being the Power of Attorney holder 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 Notice could be served on him as the agent of the Assessee - Company in this case.
13. The ground taken by Mr. Sanjeev Narayan that even though Notice was served on 13.12.2018, he assumed that they were "some Income Tax Return Documents" lacks credibility. It is difficult to accept that the envelope containing the dasti Notice from this Court was considered to be "some Income Tax Return documents". The deponent does not at all disclose as to when the envelope containing the dasti Notice was ever opened.
Furthermore, the ground urged that the Chartered Accountant was suffering from an advanced stage of cataract, and hence was constrained from informing his clients is again not worthy of credence. The dasti Notice was admittedly served on him on 13.12.2018 at his office, which was much prior to his surgery which he states took place on 04.01.2019. Mr. Narayan had sufficient time to inform the Applicant - Company of the proceedings, prior to his surgery. Furthermore, Mr. Narayan appeared before the Income Tax Authorities to represent the Applicant - Company and its sister concerns on 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 abovementioned facts and circumstances, this Court is satisfied that the Applicant - Company was duly served through their authorized representative, and were provided sufficient opportunities to appear before this Court, and contest the matter. The Applicant - Company chose to let the matter proceed exparte. The grounds for Recall of the Judgment are devoid of any merit whatsoever.
15. The Applicant - Company having failed to make out any credible or cogent ground for Recall of the judgment dated 05.03.2019, the Application for Recall is dismissed with no order as to costs.
..............................J. (UDAY UMESH LALIT)
..............................J. (INDU MALHOTRA)
October 25, 2019
1 2005 (12) SCC 77.