In a recent legal judgment, the Supreme Court of India ruled on the dismissal of the Application for Re-call in a case involving M/s. Applicant-Company and the Income Tax Department. The Court found no merit in the grounds presented for the recall and upheld the original judgment dated 05.03.2019. Stay tuned for details on the court’s decision.
Facts
- The Applicant-Company’s Chartered Accountant received service on 13.12.2018 from the Income Tax Department inspector but mistakenly believed it was related to Income Tax Return documents.
- The Applicant-Company filed for a recall of the Judgment dated 05.03.2019, citing lack of service notice for SLP and no appearance during an ex-parte ruling.
- Mr. Sanjeev Narayan, the Chartered Accountant, represented the Applicant-Company post-service on 13.12.2018 for various dates.
- Original court notices were sent to the earlier registered office address of the Applicant-Company, leading to confusion due to the change in the registered office.
- Mr. Sanjeev Narayan’s cataract surgery dates were after the notice served on 13.12.2018.
- The Power of Attorney appointed four partners to represent the Applicant-Company at all stages of proceedings.
- The Court adjourned the matter by two weeks and scheduled it for 18.01.2019.
- If the Applicant – Company does not appear, the matter will proceed ex-parte.
- In C.A. No 2463 of 2019, Notice was issued to the Assessee – Applicant on 12.11.2018.
- It was determined that there was no merit in the Applicant – Company’s contention.
- No grounds were found to recall the Judgment and Order dated 05.03.2019.
Also Read: Judgement on Auction of Assets in Hirakud Industrial Works Ltd. Case
Analysis
- Mr. Sanjeev Narayan, as the Power of Attorney holder of the Applicant – M/s., had sufficient time to inform the company of the proceedings before his surgery.
- Mr. Narayan appeared before the Income Tax Authorities on various dates to represent the Applicant – Company and its sister concerns before his surgery.
- The Applicant – Company was duly served through their authorized representative and provided with enough opportunities to appear and contest the matter.
- The term ‘agent’ includes a power of attorney holder; hence, the Notice could be served on Mr. Narayan as the agent of the Company.
- Despite being served on its authorized representative, the Applicant – Company remained unrepresented during final hearings on specific dates.
- The submission that Mr. Narayan was not the ‘principal officer’ of the Applicant – Company was refuted based on the definition provided in Section 2(35) of the Act.
- The Notice was served on Mr. Narayan before his surgery, and the claim of assuming it to be Income Tax Return documents lacks credibility.
- The claim of the Chartered Accountant’s advanced cataract hindering communication with clients was deemed not credible.
- The disclosure of when the envelope containing the Notice was opened was not provided.
- A grant of power of attorney is governed by Chapter X of the Contract Act.
- Appointing an attorney does not create a relationship of trust.
- Power of attorney should be executed with due care and caution.
- Power of attorney must clearly specify the extent of authority granted.
Also Read: Land Dispute Resolution: A Supreme Court Judgement
Decision
- The Applicant – Company chose to let the matter proceed ex-parte.
- The grounds for Re-call of the Judgment are devoid of any merit whatsoever.
- The Applicant – Company failed to make out any credible 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.
Also Read: Bank Guarantee Dispute: ANZ Grindlays Bank v. Heavy Engineering Corporation Ltd.
Case Title: PRINCIPAL COMMISSIONER OF INCOME TAX(CENTRAL) 1 Vs. NRA IRON AND STEEL PVT. LTD. THROUGH DIRECTOR
Case Number: MA-000814 / 2019
