I.T.A. No. 1648/hyd/2011 (Assessment year 2003-04)

P.M. Jagtap (Accountant Member) and
Smt. Asha Vijayaraghavan (Judical Member)

ORDER

The order of the Bench was delivered by

P.M. Jagtap, Accountant Member - This appeal filed by the assessee is directed against the order of the learned Commissioner of Income-tax(Appeals) IV, Hyderabad dated 30.11.2007, whereby he confirmed the penalty of Rs.2,77,039 imposed by the Assessing Officer under S.271(1)(c) of the Income Tax Act,1961.

2. As noted at the outset, there is a delay of 1,325 days on the part of the assessee in filing this appeal before the Tribunal and the assessee has moved an application in writing seeking condonation of the said delay. At the time of hearing, it is also noted that this appeal of the assessee company is signed and verified by Shri R.Subba Rao, former Managing Director, and as such, a question also arises with regard to the maintainability of this appeal. In this regard, learned counsel for the assessee submitted that the return of income of the assessee-company for the year under consideration was signed by Shri R.Subba Rao, who was then the Director of the assessee company. Relying on the provisions of Rule 45(2) of the Income-tax Rules, 1962 read with S.140, he contended that Shri R.Subba Rao is duly authorized to sign the present appeal filed by the company, even though he resigned from the Managing Directorship of the assessee company on 23rd Decembeer, 2002 and from the Directorship of the assessee company on 2nd June, 2005 and thus, was no more a Director on the date of filing of the present appeal. He also contended that a notice dated 16th August, 2011 was issued by the Assessing Officer to Shri R.Subba Rao, requiring him to pay the impugned penalty imposed on the assessee company, and therefore, he is an aggrieved assessee, who is competent to file an appeal against the order of the learned Commissioner of Income-tax(Appeals) confirming the penalty imposed by the Assessing Officer under S.271(1)(c) of the Act, as per the provisions of S.253 of the Act.

3. Learned Departmental Representative on the other hand, submitted that the present appeal is filed on 15th September, 2011, and since Shri R.Subba Rao was neither a Director nor a Managing director of the assessee company on that date, he is not a person authorised either to file the return of income of the assessee company on that date as per S.140 of the Act, and consequently he is also not an authorised to sign or verify the present appeal on behalf of the assessee company. He has contended that this appeal of the assessee company, being signed by an unauthorized person, is not maintainable in law.

4. We have considered the rival submissions and also perused the relevant material on record. The appellant in this case is a company which is resident in India and the present appeal filed on 15th October, 2011 is signed by Shri R. Subba Rao, who has resigned from the position of Managing Director on 23rd December, 2002 and from the Directorship on 2nd June, 2005. The provisions dealing with Form of Appeal to be filed by a company before the Tribunal and the person who is authorized to sign such appeal are contained in Rule 47(1) and 45(2) of Income-tax Rules, 1962 read with S.140 of the Act, which, to the extent relevant for our purpose, are reproduced hereunder.

'RULE 47 OF INCOME-TAX RULES, 1962:
"47. Form of appeal and memorandum of cross-objections to Appellate Tribunal.— (1) An appeal under sub-section (1) or sub-section (2) of section 253 to the Appellate Tribunal shall be made in Form No. 36 , and where the appeal is made by the assessee, the form of appeal, the grounds of appeal and the form of verification appended thereto shall be signed by the person specified in sub-rule (2) of rule 45.

RULE 45 OF INCOME-TAX RULES, 1962:

(2) The form of appeal prescribed by sub-rule (1), the grounds of appeal and the form of verification appended thereto relating to an assessee shall be signed and verified by the person who is authorised to sign the return of income under section 140 of the Income-tax Act, 1961, as applicable to the assessee."

S.140 OF THE Income Tax Act,1961 :

140. Return by whom to be signed.— The return under section 139 shall be signed and verified—
(a) in the case of an individual,—

(b) in the case of a Hindu undivided family,

(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 :

Provided further that,—

5. It is clearly evident from the relevant provisions, noted above, that an appeal under S.253 to the Appellate Tribunal is required to be filed in the Form prescribed, viz. Form No.36, and the same is to be signed by the persons specified in Sub-rule (2) of Rule 45. As per Sub-rule (2) of Rule 45, the prescribed form of Appeal, the Grounds of Appeal and the Form of Verification appended thereto, are required to be signed and verified by the person who is authorized to sign the return of income under S.140 of the Income Tax Act,1961. As per S.140 of the Income Tax Act,1961, the return of income under S.139 has to be signed and verified, in the case of a company, resident in India, by the Managing Director thereof, or where for any inevitable reason such Managing Director is not able to sign and verify the return or where there is no Managing Director, by any Director thereof. A combined reading of these relevant provisions makes it abundantly clear that the person who is the Managing Director of the assessee company, or its Director in certain circumstances, on the date of the filing of the return only can sign and verify the return in the case of a company, It therefore, follows that a person who is Managing Director or Director, as the case may be, of the company, on the date of filing of the appeal before the Tribunal is only auhorised to sign and verify the appeal filed before the Tribunal in the case of a company. In the present case, Shri R.Subba Rao was neither Managing director nor Director of the assessee company as on 15th day of September, 2011 when the present appeal was filed in the case of the assessee -company. In our considered opinion, he, therefore, is not an authorized person to sign and verify the present appeal filed in the case of the appellant company. The said appeal, not signed and verified by an authorized person, is not maintainable in law, as rightly contended by the Learned Departmental Representative, and the same, in our opinion, is liable to be dismissed at the very threshold.

6. As regards the other contention raised by the learned counsel for the assessee that Shri R. Subba Rao, having become liable to pay the impugned penalty imposed under S.271(1)(c) by the Assessing Officer, has the right to file an appeal before the Tribunal, being an aggrieved party, against the order of the learned CIT(A) confirming the penalty imposed by the Assessing Officer, we are of the view that the right of appeal to the Tribunal is not confined technically to the party who is a party to the appeal, but is a much wider right which can be exercised by any person, who becomes liable to pay tax by any order against which the appeal is preferred. However, in such a case, even if Shri Subba Rao can be said to be an aggrieved assessee having become liable to pay the tax/penalty in his individual capacity, he can exercise the right to file the appeal before the Tribunal in his individual capacity in accordance with law, but he cannot file an appeal in the name of the assessee company, since he is not authorised to do so, as held by us after analyising the relevant provisions of law.

7. For the reasons given above, we hold that the present appeal filed in the case of the assessee-company is not maintainable and the same is accordingly dismissed at the threshold. In view our decision on the aspect of maintainability of this appeal, we do not consider it necessary or expedient to deal with other issues involved in this case, including the issue of condonation of delay.

8. In the result, assessee's appeal is dismissed.

The order pronounced in the open court on August 20, 2014.