CHIKA OVERSEAS P.LTD,MUMBAI vs. DCIT RG 1(1), MUMBAI

The assessee challenged the order of the ld. CIT (Appeals) in dismissing the appeal of the assessee, holding that Form 35 and grounds of appeal were M/s Chika Overseas Pvt. Ltd. Joint Managing Director and not by the Managing Director of the Company and Form 35 and grounds of appeal signed by the Managing Director which was filed during the course of Appellate proceedings cannot be taken as if the appeal filed earlier and there is inordinate delay of almost two years in filing the appeal and therefore delay cannot be condoned. The assessee also raised various grounds on merits.

The ld. counsel for the assessee submits that filing appeal with signatures of Joint Managing Director is the only irregularity which can be cured and it is not fatal to the assessee. The ld. counsel submits that when this defect was pointed out by the ld CIT (Appeals) in the course of appellate proceedings, the assessee filed revised Form 35 and grounds of appeal with the signatures of the Managing Director. The ld. Counsel further submits that the ld. CIT (Appeals) dismissed the appeal of the assessee holding that the revised Form 35 was filed belatedly after almost two years, therefore cannot be condoned. The ld. Counsel submits that the appeal i.e. the revised Form 35 along with grounds of appeal signed by the Managing Director filed in the course of appellate proceedings relates back to the date of appeal which was otherwise filed in time and therefore, there is no justification in dismissing the appeal of the assessee on such technical ground. She places reliance on the decision of the Delhi High Court in the case of Remfry & Sons Vs. CIT [276 ITR 1] in support of her contention that filing of appeal with the signature of the Joint Managing Director is only an irregularity and it is not illegal. She also placed reliance on the M/s Chika Overseas Pvt. Ltd. Delhi High Court in the case of CIT Vs. Haryana Sheet Glass Ltd. [318 ITR 173] in support of her above submission.

The ld. DR has no serious objection in sending the matter back to the ld. CIT (Appeals) for considering on merits.

We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. We find that an identical situation has been considered by the Delhi High Court in the case of Remfry & Sons Vs CIT (supra), where the assessee filed appeal before the ld. CIT (Appeals) and the ld. CIT(Appeals) objected that the appeal was not signed by a competent person. The tribunal confirmed the view taken by the ld.CIT (Appeals). When the matter reached the Hon’ble High Court, the High Court held that the irregularity committed by the assessee was curable and could be rectified on the date of its filing and even subsequent thereto as the appeal was admittedly filed within the period of limitation. While holding so, the Hon’ble High Court observed as under : “The expression ‘illegal’ has been defined as being contrary to law and is normally applicable to everything which is an offence or which is prohibited by law. This word has an extensive meaning including anything and everything which is prohibited by law which constitutes an offence or which furnishes the basis for a civil suit. The expression in a wider meaning has been equated to ‘unlawful’, but it may still not be void. This expression is distinguishable from the expression ‘irregularity’ which is defined as a want of adherence to some prescribed rule or mode of proceedings and primarily consists of omitting to do what is necessary for due and orderly conduct of the proceedings. The word ‘illegality’ on the other hand

M/s Chika Overseas Pvt. Ltd. denotes a complete defect in jurisdiction or proceedings. ‘Irregularity’ is an expression of lesser effect as an act which is improper or inefficient by reason, or departure from the prescribed act. It primarily connotes the neglect of order or method and may not be according to regulations. One of the basic distinctions between the two expressions is the resultant effect of its being curable or incurable. Normally, an “illegality” which goes to the very root of the matter or jurisdiction could hardly fall in the class of those cases, but an ‘irregularity’ which is merely procedural and where it has even been substantially complied with, to bring such a case within the class of cases where irregularity is curable, would be a fair and just interpretation of the relevant rule.” In the case on hand before us also, the assessee initially filed appeal within due date with the signatures of the Joint Managing Director and this defect when pointed out by the ld.CIT (Appeals) was rectified in the course of appellate proceedings by filing revised Form 35 and grounds of appeal duly signed by the Managing Director. As held by the Delhi High Court, filing of appeal with the signatures of a non competent person is only an irregularity and a mere procedural lapse but it is not fatal to the appeal itself, the ld. CIT(Appeals) should not have dismissed the appeal on such ground. Therefore, respectfully following the said decision, we restore this appeal to the file of the ld. CIT (Appeals) with the direction to dispose of the appeal on merits after providing adequate opportunity of being heard to the assessee.

In the result, appeal of the assessee is allowed for statistical purpose.