Ex-Director can’t Sign and Verify Appeal Memo filed before Tribunal: ITAT [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that an ex-Director of the assessee- Company is not authorized to sign and verify the Appeal Memorandum on behalf of the Company under the Income Tax Laws.

An appeal against the order of the lower authorities was filed before the Tribunal by the assessee- Company. On scrutiny, the bench found that the appeal has been filed / signed / verified by the ex-director of the company. A defect notice was sent in this regard and the reply for the same was also signed by the same person.

The counsel for the assessee contended that the company was not doing any business and nobody was there to take care of the company.

After analyzing the relevant provisions, the Tribunal noted that 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 Section 140 of the Income Tax Act,1961.

“As per Section 140 of the Income Tax Act, 1961, the return of income under Section 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 authorized to sign and verify the appeal filed before the Tribunal in the case of a company,” the bench said.

While dismissing the appeal, it was noted that “in the present case, nothing on record suggesting that the person filing the instant appeal was so qualified. Therefore, the instant appeal, not signed and verified as per statutory mandate, is not maintainable in law and hence, liable to be dismissed at the very threshold,” the bench added.