MSTC LTD.,KOLKATA vs. DCIT, CIR-3, KOLKATA, KOLKATA

Shri J.L Raha, CA आवेदक क� ओर से/By Assessee Shri Sllong Yaden, Addl. CIT-DR राज!व क� ओर से/By Revenue 26-10-2017 सुनवाई क� तार�ख/Date of Hearing घोषणा क� तार�ख/Date of Pronouncement 17-11-2017 आदेश /O R D E R PER Waseem Ahmed, Accountant Member:- Both appeal by the assessee are directed against the different orders of Commissioner of Income Tax (Appeals)-I, Kolkata of even date i.e. 27.01.2016. Assessments was framed by DCIT, Circle-3(1), Kolkata u/s 143(3)/147/251 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide their orders dated 26.11.2012 and 08.01.2015 for assessment years 2005-06 & 2007-08.

Shri J.L. Raha, Ld. Authorized Representative appeared on behalf of assessee and Shri Sallong Yaden, Ld. Departmental Representative appeared on behalf of Revenue.

ITA No.544-545/Kol/2016 A.Ys. 05-06 & 07-08 MSTC Ltd. Vs. CIT(A)-I Kol Page 2 2. The assessee has raised the common grounds in both the appeal, the following grounds are reproduced in for A.Y. 2005-06l :- “1. That your Appellant Company, a PSU under Ministry of Steel, Govt. of India has three full time directors including Managing Director. Since most of the time they remain busy with interacting with the Ministry at New Delhi, General Manager (Finance) was given a general power to act on behalf of them for signing, verification of any document and on the strength of this power GM(F) has signed the Appeal petition.

2. That the authorized signatory (GM, Finance) as per general power used to sign such documents and being accepted by different Govt. Departments including Income Tax Department since long and being accepted by Revenue since long including the Ld. CIT(A). Though, this is definitely a departure from the Statute but having no Revenue impact your Appellant prays before your honour to kindly go by the merit of the case and condone the technical defect and allow us an opportunity to ratify the Appeal petition for hearing of the case before CIT(A).

3. That your appellant craves leave to state further grounds at the time of hearing of the case, before your honour.”

3. Since common grounds are involved in both the appeals, therefore these were heard together and are being disposed of by this common order for the sake of convenience. First we take up ITA No.544/Kol/2016 for A.Y. 05-06.

4. The inter-related common issues raised in this appeal is that Ld CIT(A) erred in rejecting the appeal filed by the assessee on the ground that the appeal was not signed by the Director/ Managing Director of the assessee-company.

5. At the outset it was observed that the appeal memo filed by the assessee in Form No. 35 was not signed by the Director/ Managing Director of the company as per the provision of section 140(c) of the Act and 45(2) of Income Tax Rule 1962. The appeal Form was signed by the AGM taxation who was not the Director of the assessee-company. The Ld CIT(A) was of the view that the appeal memo should have been signed by the Director/ Managing Director of the company but the assessee has failed to do so. Accordingly, the Ld CIT(A) held that the appeal filed by the assessee is non-est. 5.1 However the ld. AR for the assessee before us submitted that Ld. CIT(A) has rightly adopted the 45(2) Rule of Income Tax Rule 1962 but for some practical -545/Kol/2016 A.Ys. 05-06 & 07-08 MSTC Ltd. Vs. CIT(A)-I Kol Page 3 difficulty the assessee could not meet the requirement. First – as this is a Govt. of India undertaking under Ministry of Steel Govt. of India and all the director(s) re- nominated by the Hon'ble President of India. The assessee-company has three whole time Directors including Chairman-cum-Managing Director. All other Director(s) are from different Industries and Govt. Departments stationed all over India. Again, as the Chairman-cum-Managing Director and other two whole time Directors had to interact with the Ministry at New Delhi and different Branches/Units of the company allover India their availability is bit uncertain. Due to this uncertainty a General Power of Attorney (Annexure-B) was given to General Manager Finance by the Chairman-cum- Managing Director to ensure compliance with all statutory requirements and to act upon on his behalf. It is further to bring the Tribunal that in past several cases (Annexure-3 to G) including 1st appeal against original assessment order (Annexure- D) of the cited year was disposed off under the signature other than Director. Some alike case materials and the corresponding order of Ld. CIT(A) of the assessee is placed inn Annexure-1 as instances. From such instances the assessee has conceived that Ld. CIT(A) has got some discretionary power to act upon appeal petition signed by duly authorized person of Chairman-cum-Managing Director. Accordingly, in response to the notice of Ld. CIT(A) for non-compliance of Rule 45(2) the assessee resubmitted the same appeal petition with signature of authorized officer of Chairman- cum-Managing Director. Considering the practical difficulty and also precedence the assessee pays for condoning the compliance of Rule 45(2) of the I.T Rules, 1962 and allowing hearing on cited appeal petition with a copy of same appeal petition bearing signature of Chairman-cum-Managing Director or any other Director.

6. On the other hand, Ld DR submitted that the Ld. CIT(A) granted opportunity to the assessee to rectify the mistake but assessee failed to do. Therefore, no further opportunity should be given to the assessee. He vehemently supported the order of authorities below.

7. After hearing the contentions of both the parties and perusing the material available on record, we observe that the assessee has agreed to rectify the defect as pointed out by the Ld CIT(A). Therefore, in the interest of natural justice and fair play we feel that the assessee deserves one more opportunity to raise its contentions before