FORTUNE FINANCIAL SERVICES (I) LTD,MUMBAI vs. ITO TDS WD 1(5), MUMBAI

आदेश / O R D E R Per Ashwani Taneja (Accountant Member):

2 Fortune Financial Services Mumbai {(in short ‘CIT(A)’}, dated 28.03.2014 for the assessment year 2008-09, decided against the assessment order passed by the Assessing Officer (in short ‘AO’) u/s 201(1)/201(1A) of the Act, on the following grounds:

"1.On the facts and in the circumstances and in law the learned Commissioner of Income Tax, (Appeals)-3, Mumbai erred in assessing Rs.12,01,781/- as TDS Interest Fine demanded. 2.On the facts and in the circumstances and in law and in the interest of natural justice the honourable Commissioner of Income Tax, (Appeals)-3, Mumbai has erred in not allowing appellant sufficient time to cure defects stated by him vide order sheet dated Friday, March 21, 2014 wherein opportunity allowed by CIT(A) up to Monday March 21, 2014 being too short time for correction."

3.2. We have gone through the orders of lowers authorities as well as submissions made by both the sides. It is noted by us that Ld. CIT(A) has adopted highly irresponsible and casual approach while disposing the appeal. Effectively, no time was given to the assessee for removal of the defect. The assessee has successfully explained the reason for non appearance before the Ld. CIT(A) on 24.03.2014 with the help of an affidavit. It is further noted by us that the impugned defect in the appeal memo was curable as has been held in the judgments relied upon by the Ld. Counsel.

4 Fortune Financial Services 3.3. In the case of ACIT vs. GTL Technology Investment Ltd.(supra) the Hon’ble Bench held as under: “5. We find that the appeal memo before the Ld. CIT (A) is signed by one Shri Sanjay O. Bang whose designation is mentioned as “Dy. Company Secretary”. Even the verification as well as grounds of appeal are also signed by Shri Sanjay O. Bang. As per the rules, the appeal memo before the Ld. CIT (A) has to be signed by a person authorised u/s.140 of the Act who are competent to sign the return of income. So far as company is concerned, clause (c) to sec.140 reads as under: “(c) in the case of a company, by the managing director thereof, or where for any unavoidable reason such managing director is not able to sign and verify the return, or where there is no managing director, by any director thereof” “Provided that where the company is not resident in India, the return may be signed and verified by a person who holds a valid power of attorney from such company to do so, which shall be attached to the return”

6. It is clear from above provision that the Managing Director is authorised to sign the return or in the absence of Managing Director any of the Directors to sign. In the present case, the appeal memo verification and its grounds of appeal filed before the Ld. CIT (A) are signed by Shri Sanjay O Bang in the capacity of as “Dy. Company Secretary”. The sec.140 does not authorise Dy. Company Secretary to to sign the appeal which is to be filed before the CIT (A). We, therefore, accept the contention of the Ld.

5 Fortune Financial Services CIT DR that Dy. Company Secretary has no authority to sign and file the appeal on behalf of present assessee company. At the same time, we did not accept the further contention of ld. CIT(DR) that it is a serious illegality. In our opinion, it is merely irregularity and that can be rectified. We, accordingly, set aside the order of Ld. CIT (A) and restore entire matter to his file. The Ld. CIT (A) is directed to give opportunity to the assessee to rectify the defect and then to dispose off the appeal on merit as per provisions of law as admittedly when the said appeal was decided it was not filed by person authorised u/s.140 of the Act.”

3.4. Similarly, in the case of M/s. Oxford Industries Ltd. (supra), the Tribunal held as under: “7. After considering the facts and circumstances of the case we are of the view that not signing of the appeal memo by the managing director suffers from a curable defect which may be cured by the assessee by filing the relevant appeal memo duly signed by the managing director. This view also finds support from the judgement of Hon’ble Delhi High Court in Bharat Nidhi Ltd. vs. CIT (2008) 306 ITR 230 (Del.) wherein it has been held (headnote) : “Held, that a secretary was otherwise a person who was competent to sign documents on behalf of the assessee which was a company. Though the secretary was not competent to file a return under section 140 of the Act, from the records and as 6 Fortune Financial Services mentioned in the statement of case, even in the past the returns of the assessee had been filed by its secretary. However, the moment the defect was pointed out to the assessee, a fresh return was filed which was signed by the managing director. From the facts of the case, there could not be any doubt whatsoever that the assessee had made an error which was in the nature of a defect and that defect was removed by filing a fresh return signed by the managing director of the assessee. The return would then relate back to the original filing date.” Since the ld. CIT(A) except proposing to treat the appeal as invalid, has not provided any specific opportunity to remove the defect, therefore, we are of the view that the matter should go back to the file of the ld. CIT(A) and accordingly we set aside the order passed by the ld. CIT(A) and send back the matter to his file who shall provide a reasonable opportunity to the assessee to remove the defect and shall decide the appeal afresh and according to law. The grounds taken by the assessee are therefore, allowed.’’ 3.5. Therefore, keeping in view the aforesaid facts and circumstances and the legal position as discussed above, we send this appeal back to the file of the Ld. CIT(A) with a direction to provide the assessee an opportunity to rectify this defect. The Ld. CIT(A) shall dispose this appeal on merits after

7 Fortune Financial Services giving sufficient opportunity to the assessee. The assessee shall also extend requisite cooperation to Ld. CIT(A)

Order pronounced in the open court on 16th December, 2015.