In the case of Commissioner of Income Tax (Central) v. NRA Iron & Steel Pvt. Ltd., the Supreme Court dismisses the application of NRA Iron and Steels Pvt. Ltd. regarding setting aside of ex-parte order which was passed on 5th March 2019. In this case, the appellant argued to set aside the orders as notice was not delivered to the official address of the company.
Facts of the Cases
The ex parte order against the NRA Iron & steels Pvt. Ltd., was delivered by the Court on 5th March 2019. The NRA than filed an application against ex parte order and it’s recalling on various grounds.
Grounds for argument by the appellant
There were many grounds which were placed by the appellant in front of the apex court on the basis of which it raised the application of recalling of ex parte order.
- The appellant in the application confirmed that company registered mailing address has been changed thrice a while ago because of which he did not receive the notice.
- The appellant also said that he came to know about the judgment through a newspaper headlines after which the application for recalling was filled
- They also argued that notice was received by the appellant CA Sanjeev Narayan who has not authorised a representative in High Court or Supreme Court of the appellant (authorise to represent in the income tax tribunal)
- The CA Sanjeev Narayan when received the notice from the income tax officer he bona fide believed that its some paper relating to the income tax return and didn’t open the envelope.
- Further, they also added that the CA Sanjeev Narayan is suffering from the initial stage of the cataract and had undergone the surgery on 4.01.2019 and 23.01.2019 which showcases that he was unable to read the document.
Objection Held by Income-tax Department
There were many objections held by the income tax department during the session
- The first objection that was held by the department was that notice was served on 13.12.18 and the CA went under surgery on 1.01.2019 during which it had ample amount of time to inform the client about the notice.
- Secondly, CA Sanjeev was holding the power of Attorney on record (AY 2009-10) which showcases that he can be served notice and notice was delivered at his official office address
- CA Sanjeev represented the Applicant Company and his sister concern before the income tax department on various dates before he underwent surgery and after the notice served.
The court dismissed the application
After learning both side arguments and justifications the Court dismissed the application of the appellant because the court found that there were no strong grounds to believe appellants plea. The Apex Court clearly stated that the notice was served to the CA of the company which is authorised person to duly served the notice for this court also relate the case of State of Rajasthan v. Basant Nehata in which court explained that if an agent is appointed as Principal for series of transaction or for one transaction with the help of power of attorney than he is believed to be authorised person and duly notice can be served to him. In this case, also CA Sanjeev has been appointed as principal in AY 2009-10 which showcases that he is authorised to be served notice. The argument laid by the CA that he assumed that the notice was some income tax return is not acceptable in the court and cannot believe that it was never opened by the CA, the medical ground that was placed by CA was also rejected by the court. After which the court dismissed the application of the appellant.
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