This is a reference under Section 66(1) of the Income-tax Act. The assessee is the Court of Wards representing the estate of Naraindas Narsinghdas of Gorakhpur. An order was passed by the Income-tax Officer against the assessee under Section 25A of the Income-tax Act. Notice of this order was saved on the assessee on the 30th of January, 1945. An appeal in the prescribed form was filed before the appellate Assistant commissioner on the 19th of February, 1945, by one Nabir Ahmad, Mukhtar-e-am, on behalf of the Special Manager, Court of Wards, representing the estate of Naraindas Narsinghdas, Gorakhpur. The appellate Assistant Commissioner returned the memorandum of appeal on the ground that it was not signed and verified as require dander the rules. The memorandum of appeal was received by the Special manager on the 21st of February, 1945, and on the same day he passed the following orde : - 'Most urgent. Mukhtar-e-am to comply.' The signature and the verification on the memorandum of appeal was made by the Special Manager on some subsequent date and it was again presented before the Appellate Assistant Commissioner on the 5th of March, 1945. Thirty days, the period for appeal fixed under Section 30 of the Income-tax Act, had expired on the at when the memorandum of appeal was filed after proper verification and signature. An application was made on behalf of the Special Manager for condonation of the delay on the ground that the memorandum of appeal was received back by him not on the 21st February, but on the 1st of March and he had re-submitted the same without any loss of time on the 2nd March, 1945. The appellate Assistant Commissioner found that this was a false explanation as the Special Manager had himself passed the order quoted above on the 21st of February, 1945, after the receipt of the memorandum of appeal. The explanation of the Special Manager having been found to be false and there being no other explanation for the delay the Appellate Assistant Commissioner held that there was no sufficient cause for not resenting the appeal within the period of limitation and he refused to exercise the discretion given to him under Section 30 of the Income-tax Act to condone the dealt and admit the appeal.
There was an appeal against that order before the Appellate Tribunal and the Tribunal again went into the merits and came to the conclusion that the memorandum of appeal was rightly rejected and there was not sufficient ground for condonation of the delay. The Tribunal was also of the opinion that the order passed by the Appellate Assistant Commissioner was not an order under Section 31 of the Income-tax Act and, therefore, no appeal lay to the Tribunal. The appellate Tribunal relied on a ruling of a Division Bench of this Court in Shivnath Prasad v. Commissioner of Income-tax, Central and United Provinces.
A point was raised before the Appellate Assistant Commissioner as well as before the Appellate Tribunal that the rule requiring the assessee to sing the memorandum of appeal personally and not through as agent was ultra vires. The point was decided against the assessee.
On an application under Section 66(1) the Tribunal has referred the following two questions to this Court :-
'(1) Whether the instruction contained in the foot-note appended to Form C(1) (prescribed by Rule 21 of the Income-tax rules) is ultra vires the rule-making power of the Central Board of Revenue, so as to render the assessees appeal to the Appellate Assistant Commissioner filed on the 19th February, 1945, invalid ?'
Obviously the Appellate Tribunal must have meant 'valid' and not invalid. the second question was :-
'(2) Whether the order of the Appellate Assistant commissioner refusing to entertain the appeal on the ground that it was time barred was an order under Section 31 of the Income-tax Act against which an appeal lay to the Tribunal ?'
Section 30(3) of the Income-tax Act provides that 'the appeal shall be in the prescribed form and shall be verified in the prescribed manner.' Section 59 of the Act gives the Central Board of Revenue, subject to the control of the Central government, power to make rules for carrying out the purposes of the Act and for the ascertainment and determination of any class of income. Under the power given in Section 59 certain rules were framed by the Central Board of Revenue and Rule 21 relates to appeal under Section 30 against the various orders passed by the Income-tax Officer. Separate forms ar prescribed for appeals from separate types of orders and the form prescribed for an order rejecting an application under Section 25A is Form C(1). There is a foot-note to this form which requires that the memorandum of the appeal and the verification appended to the appeal have to be signed personally by the appellant or appellants. Mr. Jagdish Swarup on behalf of the assessee has urged that it is not his contention that the whole of Rule 21 or the whole of this form is ultra vires, but his objection is only to the foot-note. The argument is based on the contention that Rule 21 provides that in the case of an appeal against the order of the Income-tax Officer under Section 25A of the Income-tax Act the appeal has to be filed in Form C(1), and the rule as regards signature by the appellant himself should have rightly been a part of Rule 21 and the foot-not of Form C(1) was not the place where these requirements about verification and signature should have been laid down. To our minds this argument has no substance. Both the rule as well as the form were framed by the Central Board of Revenue under the powers given under Section 59 of the Income-tax Act and if it is admitted that the requirements about signature and verification could have been included in Rule 21, we do not see how it could that its mention in the foot-note attached to the form was ultra vires. The reason for this foot-note obviously is the fact that in very type of appeal the provisions as regard signature and the other requirements had to be separately mentioned and it was convenient to do so at the end of each form and to collect them all together at one place in Rule 21 would have led to a good deal of confusion. As we have already said the objection that the requirement about the signature having been put down in the foot-not to the form was ultra vires of the rulemaking power of the Central Board of Revenue does not seem to us to have any substance. In our opinion the instruction contained in the foot-note appended of Form C(1) prescribed by Rule 21 of the Income-tax Rules is not ultra vires the rule-making power of the Central Board of Revenue and the appeal filed on the 19th February, 1945, was, therefor, invalid.
Coming to the second question, we have already said that the Tribunal has followed a ruling of this Court in Shivnath Prasad v. Commissioner of Income-tax, Central and United Provinces. The facts of that case are not distinguishable. An appeal was filed before the date of the notice of demand. The Assistant Commissioner after hearing the assessee came to the conclusion that sufficient cause was not made out for condonation of the delay. The appeal was, thereupon, not admitted and the memorandum of appeal was rejected. A Bench of this Court held that this was not an order under Section 31 of the Income-tax Act but an order under Section 30(2). Great reliance has been placed on a ruling of the Patna High Court in Maharani Gyan Manjari Kuari. Commissioner of Income-tax, Bihar and Orissa. The language of the two Sections 30 and 31 of the Income-tax Art certainly lends support to the view taken by the Division bench of this Court in the case of Shivnath Prasad v. Commissioner of Income-tax, Central and United Provinces. Sub section (2) of Section 30 provides that if an appeal is filed after the expiry of thirty days the Appellate Assistant Commissioner may admit an appeal if he is satisfied that the appellant had sufficient cause for not presenting it within that period. It obviously would include the power not to admit an appeal where the Appellate Assistant Commissioner is not satisfied. Section 31 then provides that the Appellate Assistant Commissioner shall fix a day and place for the hearing of the appeal and may from time to time adjourn the hearing. This would mean after he has decided to condone the delay and admit the appeal under sub-section (2) of Section 30 of the Income-tax Act. The rest of the provisions of Section 31 contain provisions as to what the Appellate commissioner should do at the hearing of the appeal and what are the two powers that he can exercise. Section 31, therefore, as we read the two sections, can come into play after the appeal has been admitted and the delay if any has been condoned under sub-section (2) of Section 30 of the Income-tax Act.
The other view at the same time may be possible that even though the period of limitation is prescribed under Section 30 and the power to grant extension is also given in that section the power is really exercised under Section 31 as the Appellate Assistant commissioner when he decides not to extend the period of limitation may be said in a sense to have confirmed the assessment. This question may assume some importance in a case where the appeal was within time but the Appellate Assistant Commissioner made a mistake and refused to admit it on the ground that the appeal was barred by limitation or the question might well have to be seriously considered in a case where there was sufficient cause for condonation of the delay and the exercise of the discretion by the appellate Assistant Commissioner was considered to the perverse. In the case before us, however, both the Appellate Assistant Commissioner as well as the Appellate Tribunal considered the case on the merits and both were of the opinion that there were not sufficient grounds for the condonation of the delay. That could be the only decision in view of the fact that the Special Manager had tried to get the delay condoned on a ground which was obviously false. In the circumstances of the case there is no point in having the question further consider by a large Bench. As we are bound by the decision of this Court in the case of Shivnath Prasad v. Commissioner of Income-tax, Central and United Provinces, mentioned above, we must answer this question in the negative.
The assessee will pay the costs of these proceedings. We fix the fee at Rs. 500 of the learned counsel for the department.
Reference answered accordingly.