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Smt. Kantadevi Sajjankumar Vs. Sixth Wealth-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Mumbai
Decided On
Judge
Reported in(1983)5ITD467(Mum.)
AppellantSmt. Kantadevi Sajjankumar
RespondentSixth Wealth-tax Officer
Excerpt:
.....case. as stated in the opening paragraph, the issue we have to decide is whether the memorandum of appeal signed by a person other than the appellant herself is a fatal defect. we must consider whether the only consequence of such an appeal is that it has to be treated as non est. section 23 gives the right to the assessee to file an appeal against the order of the wto if he is aggrieved by any of the findings therein. how the appeal is to be filed is contained in that section itself. the section says that the assessee may appeal to the aac against the assessment in the prescribed form and verified in the prescribed manner.5. the form required for this purpose has been given in rule 5 of the wealth-tax rules, 1957. under this rule, an appeal under section 23 to the aac should be in form.....
Judgment:
1. These four appeals by the assessee are against the order of the AAC dismissing the appeals filed by her for the four assessment years 1972-73 to 1975-76 as invalid. We are called upon only to decide the preliminary issue whether the defects arc curable or not.

2. The assessments to wealth-tax were completed on various dates.

Appeals under Section 23 of the Wealth-tax Act, 1957 ('the Act'), have to be filed within 30 days of the date of service of demand notice. On the last day, i.e., on the 30th day, the appeals were filed in the proper form; but these were signed by the chartered accountant of the assessee. The AAC heard the appeals on several dates, but he seems to have noticed the defect in the memorandum of appeals belatedly. By his letter dated 21-8-198.1, he called upon the assessee to explain the reason why the appeals were not signed by the appellant herself. The assessee's chartered accountant replied by his letter dated 16-9-1981 that there were certain circumstances under which it was found not possible to get the appeals signed by the appellant herself. Since the last date for tiling of the appeals was nearing, no option was available to the assessee except to file the appeals under the signature of the constituted attorney. It was prayed that the AAC might either admit the appeals as such or allow the assessee to re-submit these appeals with the assessee's own signature. The AAC, however, thought that the appeals were not valid and so he dismissed the same in limine.

3. Shri Dwarkadas, for the assessee, submitted that the absence of the signature by the assessee is a curable defect and the assessee ought to have been given an opportunity to cure the defect. The appeals should not have been dismissed, according to him, in limine, without giving an opportunity to the assessee to cure the defect. Shri Perianayagam, for the department, however, submitted on the basis of the Supreme Court decision in the case of CAIT v. Sri Keshab Chandra Mandal [1950] 18 ITR 569 that such a memo of appeal is invalid. He also pointed out that although defective memoranda were filed by the assessee as early as 28-3-1978, no efforts were made by the assessee to regularize them by filing suo moto a proper memorandum [being] signed by the assessee herself.

4. We have considered the facts of the case. As stated in the opening paragraph, the issue we have to decide is whether the memorandum of appeal signed by a person other than the appellant herself is a fatal defect. We must consider whether the only consequence of such an appeal is that it has to be treated as non est. Section 23 gives the right to the assessee to file an appeal against the order of the WTO if he is aggrieved by any of the findings therein. How the appeal is to be filed is contained in that section itself. The section says that the assessee may appeal to the AAC against the assessment in the prescribed form and verified in the prescribed manner.

5. The form required for this purpose has been given in Rule 5 of the Wealth-tax Rules, 1957. Under this rule, an appeal under Section 23 to the AAC should be in form 'E' and should be verified in the manner provided therein. Rule 5(2) requires the signature and the verification by the individual herself.

6. It will be noticed that the requirement of the signature by the assessee herself is not in the statute but in the rules. Now, it is well settled that the rules cannot be interpreted in such a way as to be repugnant to the provisions of the statute itself. The statute controls the rules. The rules cannot, therefore, overstep the provisions of the statute. Therefore, the rules cannot take away what the statute gives by way of right. Section 23 gives a right to the assessee to file an appeal if he is aggrieved. That right cannot be taken away by the rules. Therefore, if the rules have not been properly complied with, the defect, if any, has to be a curable defect since the right given under the section cannot be nullified by this defect.

7. We can approach this problem from another angle. The rules that are prescribed for the purpose of Section 23 have to be rules which would constitute the procedural part of filing the appeals. It is well settled that any defect or illegality in respect of a procedure cannot affect any vested right of the assessee or the jurisdiction of the assessing authority. In this case, since there is a defect, that defect has to be only a procedural defect which cannot nullify the rights given to the assessee.

8. We may mention here that the Orissa High Court had considered a somewhat similar issue in their decision in Addl. CIT v. K. Padmalochan Sahu [1974] 95 ITR 113. That was an income-tax case. Therein, the assessee was a Hindu undivided family. The memorandum of appeal, however, was signed not by the karta as required by the statute but by some other member. The appeal was held to be defective by the authorities but the Tribunal hold that the appeal was valid. The Orissa High Court upheld the view. They pointed out that the question whether non-compliance with the memo of appeal would be a nullity or not was considered by the Calcutta High Court in the case of Sheonath Singh v.CIT [1958] 33 ITR 591, wherein, after a thorough discussion of the authorities, they came to the conclusion that if there was such a defect, an opportunity should be given to rectify the defect and there was no justification to take a harsher view in relation to an appeal before the AAC. A similar decision had already been taken in another case in the case of Anirudha Behera v. Dhanu Behera 1961 ILR Cuttack 430. A similar decision has been arrived at by the Calcutta High Court independently in the case of CIT v. Southern Bank Ltd. [1979] 120 ITR 9. The decisions relied on by the AAC and the departmental representative are mainly on the provisions of the 1922 Act as it stood before the amendment in 1939 and the Agricultural income-tax Act. In Sri Keshab Chandra Mandal's case (supra), the issue was whether a return not properly signed was a valid return. Das J., delivering the majority judgment, clarified that the Court was not dealing with the question whether it was proper for the ITO to proceed with the assessment ignoring the return without giving the assessee an opportunity to put his mark on it. Mahajan, J., expressly held that the ITO should have called upon the assessee to put his mark on the return and should not have made the assessment ignoring the return. It would, therefore, appear that the Supreme Court was not called upon to decide whether such a return not properly signed contained only a curable defect or not.

10. In any case, the provisions of Section 42C would come to the rescue where any defect is found in any of the proceedings. This section provides that if the proceedings are in substance and effect in conformity with or according to the intent and purpose of this Act, it could not be considered as invalid merely because of certain defects in the proceedings.

11. It is true, as Shri Perianayagam pointed out, that the assessee did not take any effort to regularize the defective memorandum of appeal as soon as the appellant came back to the city. But then neither the AAC was aware of the defect. When it was pointed out, the assessee at once offered to rectify the same. The AAC, however, did not allow the assessee a chance to rectify it. We are sure, on this account, the assessee's right should not be diluted.

12. In the result, we hold that the memoranda of appeal contained only a curable defect. The AAC ought to have allowed the assessee an opportunity to cure the defect. Since he did not allow such an opportunity in spite of a specific request, we direct him to grant such an opportunity to the assessee so that the memoranda of appeal could be regularized by her signature. For this purpose, the orders are set aside and the appeals are restored back to his registers. It is needless to add that if the assessee does not rectify the defect within, say one month of the AAC's notice to the assessee, the AAC is at liberty to proceed as if the assessee is not interested in rectifying the defects.


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