REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

M.A. No. 814 of 2019 IN

CIVIL APPEAL NO. 2463 OF 2019

Principal Commissioner of Income Tax (Central) ­ 1                  …Appellant

Versus

NRA Iron & Steel Pvt. Ltd.                …Respondent

J U D G M E N T    

INDU MALHOTRA, J.

1. The  present  Application  has  been filed for  Re­call of the

Judgment dated 05.03.2019 passed by this Court in C.A.

No. 2463 of 2019, on the ground that the Applicant –

Company was not served with the Notice of the SLP at the

registered office of the Company, nor was a copy of the SLP

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served on the Applicant – Company. Consequentially, since

the Judgment was passed  ex­parte, the Applicants prayed

for Re­call of the Judgment and a de novo hearing.

2. The Applicants submit that the Court Notices were sent to

the earlier registered office address of the Applicant –

Company i.e. at 310, 3rd Floor, B­Block, International Trade

Tower,  Nehru Place,  New Delhi.  However,  on 19.05.2014,

the  Applicant –  Company changed its registered office to

211, Somdutt  Chambers II, 9,  Bhikaji  Cama  Place,  New

Delhi – 110066.

Thereafter, on  23.01.2019, the registered  office  was

again changed to 1205, Cabine No. 1, 89 Hemkunt

Chambers, Nehru Place, New Delhi.

3. The  Applicants submit that they learnt  of the  Judgment

dated 05.03.2019 passed by this Court from a news clipping

published in the Economic Times on 07.03.2019.

Subsequently, the Application for re­call was filed on

12.03.2019.

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4. The Applicant – Company submits that on an inspection of

the court record, they learnt that the Affidavit of  dasti

service filed by the Revenue – Department on 19.12.2018,

showed an acknowledgment receipt by Mr. Sanjeeva

Narayan, the Chartered Accountant of the Applicant –

Company on 13.12.2018.  

5. The Applicant – Company placed on record the Affidavit of

Mr. Sanjeev Narayan – Chartered Accountant, wherein he

has stated that he was the authorized representative of the

Respondent – Company before the Income Tax Authorities

but was not engaged before the High Court, or the Supreme

Court. The Chartered Accountant further submits that he

had received service on 13.12.2018 from one of the

Inspectors of the Income Tax Department, but he bona fide

believed that the documents were “some Income Tax Return

documents from Income Tax Department.”  

The Chartered Accountant further submits that he was

suffering from an advanced stage of cataract, and had

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undergone a surgery in both the eyes on 04.01.2019 and

23.01.2019 respectively.

6. The Applicant – Company during oral arguments submitted

that Mr. Sanjeev Narayan – Chartered Accountant was

representing the Applicant – Company in all its cases, as

also the sister concerns including M/s. Tata Steel BSL Ltd.

(earlier known as Bhushan Steel Ltd.) before the Income Tax

Authorities, and continues to represent the Applicant –

Company even as on date.

7. This Court  vide  Order dated 19.08.2019, called for the

original record from the Income Tax Appellate Tribunal and

the Delhi High Court.  In the meanwhile, the Department was granted time to

file their objections.

8. The Department in the Counter Affidavit submitted that the

dasti Notice was duly served on Mr. Sanjeev Narayan at his

office address, in his capacity as the authorized

representative of the Applicant – Company, who was holding

a Power of Attorney of the Assessee – Company for the A.Y.

2009 – 10. The Power of Attorney appoints all four partners

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of the firm i.e.  Mr. Mohan Lal, Advocate, Mr. Ashwani

Kumar, Chartered Accountant, Mr. Sanjeev Narayan,

Chartered  Accountant  and  Mr.  Surender  Kumar,  FCA as

their Counsel, and authorizes them to represent the

Applicant – Company at all stages of the proceedings. The

Power of Attorney executed by the Applicant – Company in

favour of Mr. Sanjeev Narayan was placed on record.

9. It was further submitted on behalf of the Revenue that even

though Mr. Sanjeev Narayan has stated that he underwent

the  cataract  surgery on 04.01.2019 and 23.01.2019, this

was much after the Notice had been served on 13.12.2018.

Hence, there was ample time for him to inform his clients of

the pendency of the proceedings.

10. It was further submitted that Mr. Sanjeev Narayan had

appeared before the Tax Authorities after the date of service

on 13.12.2018, and prior to his surgery, to represent the

Applicant – Company and its sister concerns on 14.12.2018,

21.12.2018, 28.12.2018 and 29.12.2018. In these circumstances it was pointed out that there

was no merit  in the contention raised by the Applicant –

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Company, and hence no ground was made out to Re­call the

Judgment and Order dated 05.03.2019 passed by this

Court.

11. We  have  heard the learned  Counsel for the parties and

perused the record.

This Court in C.A. No. 2463 of 2019, issued Notice to

the Assessee ­ Applicant vide Order dated 12.11.2018. Since

dasti service was effected on 13.12.2018 on the Applicant –

Company, the matter was listed on 02.01.2019. However,

none appeared on behalf of the Applicant – Company. The

Court further adjourned the matter by two weeks, and

posted the case on 18.01.2019, when it was ordered that in

case the Applicant – Company chooses not to enter

appearance, the matter would be proceeded  ex­parte.  The

matter was, thereafter, listed on 23.01.2019, when the

following Order was passed: “Notice was issued in the matter on 12.11.2018,  Office report dated 22.12.2018 indicated that notice was served upon the sole Respondent but none had entered appearance. By order  dated 02.01.2019, last  opportunity was given to the Respondent and it was indicated that if the Respondent chose not to

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enter appearance, the matter would be disposed of ex­parte. Even then none has entered appearance. Having gone through the matter,  we give one more opportunity to the Respondent to enter appearance and make submissions with respect to the merits of the matter.  If the Respondent still  chooses not to appear, the matter shall definitely be decided ex­parte.”

(emphasis supplied)

The Applicant – Company remained unrepresented

despite service on its authorised representative, on

31.01.2019, and on 05.02.2019, when the matter was taken

up for final hearing, and judgment was reserved.

12. During oral hearing on the Re­call Application, a

submission was made by the Counsel for the Applicant –

Company that Mr. Sanjeev Narayan was not the “principal

officer” of the Applicant – Company, and hence service could

not have been effected upon him.  Section 2(35) defines “principal officer” as follows :

“2. In this  Act,  unless  the context  otherwise requires,— (35) "principal officer", used with reference to a local authority or a company or any other public body or any association of persons or anybody of individuals, means—  (a) the secretary, treasurer, manager or agent of the  authority,  company, association or body, or

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 (b) any person connected with the management or administration of the local authority, company, association or body upon whom the Assessing Officer has served a notice of  his  intention of  treating him as the principal officer thereof ;”  

(emphasis supplied)

The term  ‘agent’  would certainly  include a power of

attorney holder. In State of Rajasthan v. Basant Nehata1 this

Court held that : “A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent.”  

(emphasis supplied)

Mr. Sanjeev Narayan admittedly 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.

13. The ground taken by Mr. Sanjeev Narayan that even though

Notice  was  served  on  13.12.2018,  he  assumed  that they

1 2005 (12) SCC 77.

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were “some Income Tax Return Documents” lacks

credibility. It is difficult to accept that the envelope

containing the dasti  Notice from this Court was considered

to be “some Income Tax Return documents”. The deponent

does not at all disclose as to when the envelope containing

the dasti Notice was ever opened.  Furthermore, the ground urged that the Chartered

Accountant was suffering from an advanced stage of

cataract, and hence was constrained from informing his

clients is again not worthy of credence. The dasti Notice was

admittedly served on him on 13.12.2018 at his office, which

was much prior to his surgery which he states took place on

04.01.2019. Mr. Narayan had sufficient time to inform the

Applicant – Company of the proceedings, prior to his

surgery.  Furthermore, Mr. Narayan appeared before the

Income Tax Authorities to represent the Applicant –

Company and its sister concerns on various dates prior to

his surgery i.e. on 14.12.2018, 21.12.2018, 28.12.2018 and

29.12.2018.

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14. 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  ex­

parte. The grounds for Re­call of the Judgment are devoid of

any merit whatsoever.

15. The Applicant  –  Company having failed to  make out  any

credible or cogent ground for Re­call of the judgment dated

05.03.2019, the Application for Re­call is dismissed with no

order as to costs.  

…...........................J. (UDAY UMESH LALIT)

…..……………………J. (INDU MALHOTRA)

New Delhi, October 25, 2019

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