Case Note & Summary
The Principal Commissioner of Income Tax (Central) filed a Special Leave Petition (SLP) against NRA Iron & Steel Pvt. Ltd., which was decided ex parte on 05.03.2019. The respondent company later filed an application for recall of that judgment, claiming that it was not served with notice of the SLP. The company argued that notices were sent to an old registered office address and that its chartered accountant, Mr. Sanjeev Narayan, who received dasti service on 13.12.2018, mistakenly believed the documents were income tax return documents and was suffering from cataract, preventing him from informing the company. The Supreme Court examined the record, including the power of attorney executed by the company in favor of Mr. Narayan for the assessment year 2009-10, authorizing him to represent the company before tax authorities. The court noted that Mr. Narayan appeared before the Income Tax Authorities on multiple dates after service and before his surgery. The court held that under Section 2(35) of the Income Tax Act, 1961, a power of attorney holder is an 'agent' and thus a 'principal officer' of the company, making service on him valid. The court found the company's explanations lacking credibility and noted that the company was given multiple opportunities to appear but chose not to. Consequently, the recall application was dismissed with no order as to costs.
Headnote
A) Civil Procedure - Recall of Judgment - Service of Notice - Service on power of attorney holder/agent of company is valid service under Section 2(35) of the Income Tax Act, 1961 - The court held that the term 'agent' includes a power of attorney holder, and service on such agent constitutes valid service on the company. The applicant's claim of non-service was rejected. (Paras 12-14) B) Income Tax Act - Principal Officer - Definition - Section 2(35) - Agent includes power of attorney holder - The court interpreted Section 2(35) to include a power of attorney holder as an 'agent' and thus a 'principal officer' for the purpose of service of notice. (Para 12) C) Civil Procedure - Recall of Judgment - Grounds - Lack of Credible Grounds - The court found that the applicant's explanation for non-appearance (cataract surgery, mistaken belief about documents) was not credible, especially since the authorized representative appeared before tax authorities after service. The recall application was dismissed. (Paras 13-15)
Issue of Consideration
Whether the judgment dated 05.03.2019 passed ex parte against the respondent company should be recalled on the ground that the company was not served with notice of the SLP.
Final Decision
The application for recall of judgment dated 05.03.2019 is dismissed with no order as to costs.
Law Points
- Service on power of attorney holder is valid service on company
- Principal officer includes agent under Section 2(35) of Income Tax Act
- 1961
- Recall application dismissed for lack of merit
