Allow Cookies!
By using our website, you agree to the use of cookies
Holding that the service of notice on the Chartered Accountant of a company who is acting as its agent is a valid service of notice, the Supreme Court refused to recall a judgment which was passed ex-parte. The order was passed by a bench which comprised of Hon'ble Justices U U Lalit and Indu Malhotra in the case Principal Commissioner of Income Tax (Central) - I vs NRA Iron and Steel Pvt Ltd.
The company has filed an application to recall a judgment passed against it on March 5, 2019 in an appeal filed by the Income Tax Department. The company further stated that the notice on the appeal was not served on it at its registered office. Rather, the notice was served on its Chartered Accountant named Mr. Sanjeev Narayanan. The company further stated that it got to know about the judgment only from a news report which was publidhrd in the Economic Times daily.
The department on the other hand submitted that the notice which was duly served to Mr. Sanjeev Narayan at his office address, he was the authorized representative of the company. The CA was holding a Power of Attorney of the company for the Assessment Year 2009 – 10, pointed out the department. The department had further stated that the Chartered Accountant had represented the company in the proceedings before the department.
The CA filed an affidavit stating that he bona fide believed that the notice from the Supreme Court was some documents from the income tax department. He also mentioned that he had undergone a cataract surgery recently. The counsel for the company raised an argument that the notice for the company can be served only on its "principal officer" and no one else. However, the Court noticed that the definition of "principal officer" as per Section 2(35) of the Companies Act 2013 included an 'agent'.
Referring to the decision in the case of State of Rajasthan v Basant Nehata (2005) 12 SCC 77, the Court stated that the term 'agent' would certainly include a power of attorney holder. "Mr. Sanjeev Narayan, the C.A of the company 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", the court observed.
The Court added that it was difficult to accept the CA's argument that he mistook the notice from the SC to be documents from IT department. The Court also noticed that the notice was served to him much prior to his cataract surgery. "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 lacking of any merit whatsoever", said the Court dismissing the application
86540
103860
630
114
59824