1. This appeal is by the assessee. It is directed against the order dated 27-11-1982 passed by the AAC. By that order the appeal of the assessee against the order of the WTO was dismissed on the ground that it was barred by time.
2. The assessee was late Mrs. Rachel David. Her estate was represented by the executrix, Mrs. Gladys S. Koder, Mrs. Koder is resident of Cochin. The assessment year is 1977-78.
3. The order of the assessment passed by the WTO was served on 29-3-1982 on the firm of S.S. Billimoria & Co., the chartered accountants. The said firm was representing the assessee before the taxing authorities. The last date for filing of appeal was 28-4-1982.
4. On 28-4-1982, the said firm filed appeal before the AAC. The memorandum of appeal bore the signature of partner of the said firm for and on behalf of Mrs. Koder. The said memorandum did not bear the signature of Mrs. Koder.
5. On 5-5-1982, the said firm filed the second memorandum of appeal with a covering letter. This memorandum bore the signature of Mrs.
Koder. No formal application containing a prayer for condonation of delay was filed with this memorandum of appeal.
6. The AAC held that the first memorandum of appeal was invalid because it did not bear the signature of Mrs. Koder. He, therefore, rejected it on that ground. He rejected the second memorandum of appeal on the ground that it had been filed after the expiry of the period of limitation. With regard to the second memorandum of appeal, he made two observations. The first was that no formal application for condonation of delay had been filed. The second was that since Mrs. Koder had sent the memorandum of appeal from Cochin to the said firm of chartered accountants on 19-4-1982, it could not be presumed that it would take a long time to reach the said firm and as such, the delay was not duly explained.
7. The facts as stated are as follows: Mrs. Koder is resident of Cochin. The said firm of chartered accountants had been representing the original assessee and Mrs. Koder for the last more than twenty years before the taxing authorities. In fact, the address given in all the returns is the address of the said firm. This indicated that the original assessee and Mrs. Koder, the executrix, expected that the said firm would take all necessary steps on their behalf before all the taxing authorities. The said firm prepared memorandum of appeal and sent it to Cochin by post on 14-4-1982 to Mrs. Koder for her signature.
Mrs. Koder signed the memorandum of appeal and sent it by post from Cochin to the said firm on 19-4-1982. However, that memorandum was actually received on 30-4-1982 in the office of the said firm. Since 28-4-1982 was the last date of limitation, the said firm filed the first memorandum of appeal on 28-4-1982 under the signature of the partner of the said firm. After the second memorandum signed by Mrs.
Koder was received on 30-4-1982, the covering letter could be dictated only on 3-5-1982 because 1-5-1982 and 2-5-1982, being Saturday and Sunday, were holidays for the office of the said firm. The letter was typed on 4-5-1982 and the memorandum of appeal was filed on 5-5-1982.
8. We shall first consider the question whether the first memorandum of appeal was entitled to be entertained. The only ground on which it has not been entertained is that it did not bear the signature of Mrs.
Koder. The question then is whether this is a valid ground for rejecting the said memorandum of appeal.
9. On behalf of the assessee, reliance is placed on Rule 5(2)(a) of the Wealth-tax Rules, 1957. The said rule lays down that the memorandum of appeal, the grounds of appeal and the verification shall be signed by any person competent to act on his behalf in cases where it is impossible for an individual to sign.
10. The contention on behalf of the assessee is that the circumstances mentioned above indicated that it was impossible for Mrs. Koder to sign and that the partner of the said firm of chartered accountants was competent to sign on her behalf. Hence, the conditions mentioned in the said rule were satisfied and the first memorandum filed on 28-4-1982 was valid. The contention on behalf of the department is that neither condition is satisfied and as such, the said rule was not applicable.
11. We have considered these submissions and facts on record. On the basis of the copies filed on record, we are of the opinion that the facts as stated above on behalf of the assessee were correct. The postal delay has been so frequent in last few years that a judicial notice of the same may be taken. If the firm of chartered accountants had received the second memorandum signed by Mrs. Koder earlier than 28-4-1982, there could not have been any reason to file the first memorandum under the signature of its partner. There could not have been any oblique motive in doing so. The very fact that the said firm was compelled to file the first memorandum under the signature of its partner indicated that the second memorandum had not been received before that date. The second memorandum had been sent to Mrs. Koder for her signature on 14-4-1982 and in due course it was expected that it would be received before 28-4-1982. Thus, the firm had made an attempt to obtain signature before 28-4-1982 but that attempt failed because of postal delay.
12. When Rule 5(2)(a) lays down the condition that it should be impossible for the individual to sign, it does not expect an absolute improbability. What it envisages is reasonable impossibility. When the appeal is to be filed at Bombay and when the person, whose signature is required, is at Cochin, what would be reasonably expected of the firm of chartered accountants is that it would send the memorandum for signature on or before such date that the same could be received before the last date of limitation. This has been done and it is because of postal delay that the memorandum could not be received before 28-4-1982. It was absolutely necessary to file memorandum of appeal on 28-4-1982 at Bombay and on that day it was impossible for Mrs. Koder to sign at Bombay as she was residing at Cochin. Consequently, it should be held that first condition was duly satisfied.
13. As regards the second condition, what is required to be shown is that the said firm of chartered accountants was competent to act on behalf of Mrs. Koder. It is true that the said firm could not file any written power of attorney bearing a date anterior to 28-4-1982.
However, Rule 5(2)(a) in terms does not lay down that a formal power of attorney should be in existence on that day. It can be shown by circumstances that the said firm was competent to act on behalf of Mrs.
Koder. As already stated, this firm has been representing Mrs. Koder for the last several years before the taxing authorities and assessment orders to be served on Mrs. Koder personally were served on this firm and this firm accepted service of such orders for and on behalf of Mrs.
Koder. It can be inferred from these circumstances that Mrs. Koder had authorised the said firm to act on her behalf. When the department considers that service of assessment order on this firm is valid service on Mrs. Koder, it presumes that the said firm is competent to act on her behalf. Consequently, when the said firm signs on behalf of Mrs. Koder under Rule 5(2)(a) as a person competent to act on her behalf, it cannot be said that the said firm was not competent to act on her behalf. The circumstances indicate that the said firm was competent to act on her behalf. Hence, we are satisfied that the second condition has also been fulfilled. Consequently, the first memorandum of appeal filed on 28-4-1982 was valid and it should not have been rejected. The AAC has erred in not considering the provisions of Rule 5(2)(a) to which his attention had been drawn.
14. As regards the second memorandum of appeal, it was the duty of the firm of chartered accountants to file a formal application for the condonation of delay when it wanted that the said memorandum be treated as memorandum of appeal. We were surprised to find that no formal application for condonation of delay was filed. The firm took the matter for granted. This was not proper. However, the assessee should not suffer for the mistake of this nature committed by those who represented her. The circumstances in which second memorandum had to be filed on 5-5-1982 have been explained in the letter filed before the AAC and as such, those circumstances have to be considered. As already stated, the AAC has observed that it cannot be presumed that the second memorandum sent from Cochin on 19-4-1982 by Mrs. Koder after signing it could not be received before 28-4-1982. We have already considered the circumstances and have expressed our view that the circumstances indicated that there was postal delay. No other reason for not accepting the explanation has been given by the AAC. As already stated, 1st and 2nd May were Saturday and Sunday and the memorandum of appeal was filed on 5th May after the covering letter was drafted on 3rd May and typed on 4th May. The delay has been satisfactorily explained and this was a fit case for its condonation. For these reasons the second memorandum of appeal should have been entertained.
15. Before parting with this appeal, we may mention that reliance had also been placed in the alternative on Section 42C of the Wealth-tax Act, 1957 ('the Act') which lays down that no proceeding taken or purported to have been taken in pursuance of the provisions of the said Act would be invalid or deemed to be invalid merely by reason of any mistake, defect or omission in such proceeding if such proceeding is in substance and effect in conformity with or according to the intent and purposes of the said Act. It was contended that the first memorandum of appeal was in substance and effect in conformity with or according to the intent and purposes of the Act and as such any irregularity on account of non-existence of formal power of attorney would not render the proceeding of appeal invalid. We do not consider it necessary to express any view on this contention.
16. In the result, the appeal is allowed. The appeal filed before the AAC is restored to him with direction to dispose it of on merits in accordance with law after giving reasonable opportunity of being heard to the parties.