The appellant has filed appeals against the or-der passed by the Commissioner (Appeals) vide order dt. 26-6-1998, and taken following grounds in appeals : "1 That the learned Commissioner (Appeals) erred in law and on facts in dismissing the appeal in liminie for assessment year 1985-86 on the plea that the appeal was invalid although Sh. Y.P. Duggal had signed the appeal as power of attorney holder of his son, Sh, Anil Duggal, the, appellant (who was in America at the time of filing of appeal and who, had given general power of attorney to Sh. Yash Pal Duggal, his father, before leaving India) filed before the learned Commissioner (Appeals) against the additions/disallowances made in the assessment under section 144 of Income Tax Act, dated 27-3-1997, where; during hearings, detailed explanations covering all aspects of the case were duly filed before the learned Commissioner (Appeals).
2. The learned Commissioner (Appeals) erred in law and on facts in deciding the appeal in a grossly improper, illegal and baseless manner against all cannons of equity, fair play and justice without, appreciating the facts and circumstances of the case.
3. The learned Commissioner (Appeals) erred in law and facts in not accepting that general power of attorney,' which was duly registered on 18-3-1997, in the Government Sub Registrar's office, empowered Sh. Y.P.Duggal, his father, to deal with Government departments like railways and post office was simply illustrating the Government departments and not excluding others. The language used being "Gurmukhi", the official State language of Punjab and the power of attorney being written by a vernacular deed writer had to be read with judicial discretion and not to be simply rejected without due diligence on any arbitrary notion or whi m or caprice of the learned Commissioner (Appeals).
4. The learned Commissioner (Appeals) erred in law and on facts in not granting a simple adjournment for 23-6-1998, when the counsel of the assessee was in Calcutta on professional assignment.
5. The appellant craves to be allowed to amend, delete or add any other ground(s) of appeal before your Honours during the course of hearing of this appeal." The learned Commissioner (Appeals) has decided all the appeals in a common consolidated order because common issue is involved in all these appeals which has been disposed of in a common order by the learned Commissioner (Appeals) for the sake of convenience.
The appellant filed appeals before the learned Commissioner (Appeals) in Form No, 35. All these appeals for 5 assessment years have been signed by Shri Yash Pal Duggal, even though the appeals were related to Sh. Anil Duggal. The learned Commissioner (Appeals) has observed that Shri Mahesh Kumar, advocate, was also given power of attorney by Sh.
Yash Pal Duggal. The appellant filed power of attorney given by Sh.
Anil Duggal in favour of Sh. Yash Pal Duggal. The learned Commissioner (Appeals) issued a letter dated 18-5-1995, to Sh. Yash Pal Duggal to explain the reasons why Sh. Anil Duggal has not signed the appeal memo in Form No. 36. The contents of the letter issued by the learned Commissioner (Appeals) to Sh. Yash Pal Duggal are as follows : "It is seen from the record that appeals on behalf of Shri Anil Duggal have been signed by you and even the verification has been made by you though the name is typed as 'Sh. Anil Duggal'. Rule 45(2) of IT Rules provides that the form of appeal, the grounds of appeal and the form of verification in an appeal relating to an assessee shall be signed and verified by the person who is authorised to sign the return of income under section 140 of the Income Tax Act. As per the provision of section 140 of the Income Tax Act, the return of income will be signed and verified either by the individual himself or by a person who holds a valid power of attorney from the individual to file the return.
2. During the appellate proceedings, a copy of the general power of attorney in Punjabi language was filed, wherein Shri Anil Duggal has appointed you as a general power of attorney to deal with his property and also to deal with certain Government departments like Railways and Post Offices, but there is no mention in this power of attorney that you are authorised to file the return of income on his behalf. In view of this, it appears that you were not competent to file the appeal on behalf of Sh. Anil Duggal and the verification is patently false as you have signed as Anil Duggal.
3. You are requested to explain as to why the appeals filed in these cases should not be dismissed as invalid appeals." The appellant filed reply on 27-5-1998, requesting for some other date.
The assessing officer fixed hearing for 23-6-1998. On 23-6-1998, further date was asked but the learned Commissioner (Appeals) refused to accommodate the appellant further and the learned Commissioner (Appeals) took note of the written submissions filed on behalf of Sh.
Yash Pal Duggal, and discussed the merit of the submissions. The discussion and the finding of the learned Commissioner (Appeals) are discussed in para 2 of the order which are reproduced as follows "In the written reply dated 27-5-1998, it has been argued that Sh. Anil Duggal had given a power of attorney to Sh. Yash Pal as Sh. Anil Duggal was not in India. The appellant has also pointed out to the provisions of section 140 of the Income Tax Act as well as sub-rule (3) of rule 45 of the IT Rules, as reproduced below : Secondly, Your Honour's kind reference is invited to section 140(a) where even the return'of income can be verified by some person duly authorised by him where the individual is absent from India. Under the old Act, the lacunae and the difficulties like those which arose in CIT v. Keshab Chandra Mandal (1950) 18 ITR 569 (SC) and Ravula Subba Rao v.CIT do not arise now as the same has been remedied by the new section 140 of the Income Tax Act, 1961.
Thirdly, Form 35 is to be signed as prescribed by sub-rule (2) of rule 45 of the IT Rules by the 'the person who is authorised to sign the return of income under section 140 of the Income Tax Act, 1961, as applicable to the assessee'. As already stated above in the case of Sh.
Anil Kumar Duggal, his father, Sh. Yash Pal Duggal, is the authorised person and as such they may kindly be accepted.
I have considered the reply of Sh. Yash Pal Duggal, the provisions of section 140 and rule 45. It had been pointed in my letter dated 18-5-1998, that Sh. Yash Pal had only been authorised in the general power of attorney to deal with the property of Sh. Anil Duggal and also to deal with Government departments like Railways and Post office but there is no mention in this attorney that Sh. Yash Pal was authorised to file the return of income on behalf of Sh. Anil Duggal. Nothing has been pointed out as to the query raised in my letter mentioned above as to why the appeals should not be dismissed as invalid appeals especially when, the appeals filed by him cannot be treated as valid appeals and the same are dismissed in limine, without discussing the grounds as the appeals themselves have been treated as invalid." The learned Departmental Representative relied on the order passed by the Commissioner (Appeals) .
The learned counsel of the appellant did not stress much regarding the exception granted to the appellant under section 140(a) read with power of attorney given by Sh. Anil Duggal in favour of Sh. Yash Pal Duggal.
The learned counsel of the appellant pleaded that according to clause (II) of the General Power of Attorney Act, the attorney to whom power is granted can act for and on behalf of the appellant which includes signing of appellate form and filing of an appeal, The general power of attorney allegedly given by Sh. Anil Duggal to Sh. Yash Pal Duggal is reproduced as follows "I Anil Kumar Duggal, age 36 years, s/o Sh. Yash Pal Duggal S/o Sh.
Badri Nath of village Kainthan, Teh. Dasuya, District Hoshiarpur. I owned land, possessed movable and immovable property at village Kainthan, Ten Dasuya. I myself have to go abroad, therefore, I appointed general attorney to Sh. Yash,pal Duggal s/o Sh. Badri Nath S/o Sh. Roop Lal, resident of Kainthan, Teh. Dasuya. My said attorney is authorised to manage and control my all kinds of properties for and on behalf of me to cultivate land either himself or got it cultivated from tenant. And to receive rent in kind or Chokota from the tenant to issue them receipt, to evict or settle tenant to receive claim of relief of any kind in cash or cheque or produce. To prosecute or defend all cases of civil, revenue, criminal and other against me by the others or against the others by me. To appoint advocate, to file written statement/reply to appoint special attorney, to file the plaint, application, reply to the application of every kind and to compromise, to give statement, to produce evidence. To sign and execute every kind of documents, to receive and deposit amount of every kind, to receive cheque and withdraw amount, to appear, to prosecute and defend in the departments of canal, electricity board, railway, post office, forest, consolidation and other departments. To prosecute and defend cases from the trial court upto the High Court, to execute the decree, to receive decree amount, to get possession. My abovesaid attorney has right to dispose of my movable or immovable properties by mortgage, sale, gift, exchange, mortgage by title deed, like me. All acts, deeds and things done by my said attorney shall be construed as acts, deeds and things done by me, if I were personally present and all that whatever my said attorney shall do I do hereby agree to rectify and confirm. Beside it, my said attorney is authorised to do all acts, deeds and things which are not mentioned above but are required and necessary in relation to my properties. So, this power of attorney has been executed on 18-3-1997, for proof." The learned counsel has drawn our attention to the constitution of this power of attorney and pleaded that this gives powers to Sh. Yash Pal Duggal to prosecute or defend all cases of revenue nature, and this, therefore, categorically gives power to attorney to file the appeal before the authorities below. The learned counsel of the appellant pleaded that if he is not covered by sub-rule (3) of rule 45, he is definitely covered by the principles of general power of attorney and according to principles of general power of attorney, he can sign all the legal documents. The learned counsel pleaded that the learned Commissioner (Appeals) has misled himself by not entertaining the appeals on technical ground and thereby denying the appellant of the right given by the Income Tax Act to defend himself against the arbitrary assessment of income as well as assessment of tax, First, we would like to mention that the appellant has committed similar legal violation while filing the appeal in Form No. 36 before the Tribunal because again Sh. Yash Duggal, the power of attorney for Sh. Anil Duggal, has signed Form No. 36, verification column as well as grounds of appeal. We would like to discuss the procedural aspect of the filing of the appeal which is mentioned in Form 10 of the IT Rules.
Rule 45 deals with the procedure regarding filing of appeal before the learned Commissioner (Appeals). Rule 45 reads as follows : "Rule 45. (1) An appeal to (Deputy Commissioner (Appeals) for, as the case may be, the Commissioner (Appeals) shall be made in Form No. 35; (2) The form of appeal prescribed by sub-r. (1), the grounds of appeal and the form of verification appended thereto relating to an assessee: shall be signed and verified by the person who is authorised to sign the return of income under section 140 of the Income Tax Act, 1961 , as applicable to the assessee.
Rule 47 deals with the procedure regarding filing of appeals before the Tribunal. Rule 47 is reproduced as under : "47 (1) An appeal under sub-section (1) or sub-section (2) of section 253 to the Tribunal shall be made in Form No. 36 and where the appeal is made.by the ass.essee, the form of appeal, the grounds of appeal and the form of verification appended. thereto shall be signed by the person specified in sub-rule (2) of rule 45.
(2) A memorandum of cross-objections under sub-section (4) of section 253 of the Tribunal shall be made in Form No. 36A and where the memorandum of cross- objection, is made by the assessee, the form of memorandum of cross objections, the grounds of cross-objections and the form of verification appended thereto shall be signed by the person specified in sub-rule (2) of rule 45. " After going through sub-rule (2) of rule 47 it is found that the procedure of verification is mentioned to be governed by sub-rule (2) of rule 45. Sub-rule (2) of rule 45 prescribes that the appeal and grounds of appeal including verification appended to the grounds of appeal relating to the assessee shall be signed and verified by a person who is authorised to sign return of income under section 140(a) of the Income Tax Act, 1961.
It is very important to take note of section 246 which gives power to the assessee to file an appeal in case he is aggrieved against the order passed by the assessing officer. The section squarely gives power to an assessee and not to any other person to come in appeal.
Similarly, section 253(l) gives right to the assessee who is aggrieved by any of the orders to come in appeal before the Tribunal. The impact of both these sections is that the appellant or a person who is aggrieved has to file an appeal. Vide meaning of a person is covered by section 140(a) of the Income Tax Act. Section 140(a) deals with the person who has to sign return of income. Section 140(a) is reproduced as follows (ii) where he is absent from India, by the individual himself or by some person duly authorised by him in this behalf; (iii) where he is mentally incapacitated from attending to his affairs, by his guardian or any other person competent to act on his behalf; and (iv) where, for any other reason it is not possible for the individual to sign the return, by any person duly authorised by him in this behalf.
Provided that in a case referred to in sub-clause (ii) or sub-clause (iv), the person signing the return holds a valid power of attorney from the individual to do so, which shall be attached to the return." We are here to deal with section 140(a)(ii) which readsi as 'where the assessee is absent from India, by an individual himself or by some person duly authorised by him in this behalf.' We would like to discuss the implication of signatures for the purpose of section 140(a) and which will have same impact and importance for making a signature on other verification which includes verification for the purpose of Rules 45 and 47. In the case of National Insurance Co. Ltd. v. CIT (1995) 213 ITR 862, (Cal), the Hon'ble Calcutta High Court was dealing with the issue of understanding the significance of signatures. The Hon'ble High Court has given its learned opinion which is reproduced as under : "We have considered the rival contentions. In our view none of the contentions raised by Mr. Bhattacharjee has any substance. Section 140(c) provides that in the case of a company the return of income shall be signed by the managing director thereof, or where for any unavoidable reason such managing director is not able to sign and verify the return, by any director thereof. Thus, it is obligatory on the company to have its return signed and verified by the managing director thereof and only in a case where for any unavoidable reason such managing director is not able to sign and verify the return, can any other director of the company sign and verify the return. In this case', the return which was originally filed had been verified by one Niranjan Kanodia, general manager of the assessee- company. Since this verification was not in accordance with the provisions of section 140(c) of the Act, the Income Tax Officer addressed a letter dated 28-2-1979, to the managing director of the assessee- company drawing his attention to the provisions of section 140(c). He further pointed out that in case the managing director was unable to sign the return due to any unavoidable reason the return of income could be signed by another director. In the said letter, the Income Tax Officer requested the managing director of the company to let him know whether he was prevented from signing the verification on 14-2-1978, due to any unavoidable reason., He further pointed out that if there was no such cause, the return of income would be invalid and in that event a duly signed and verified return should be filed." If one will go through the submiissions and facts on record, 'it is quite evident that power of attorney given by Sh. Anil Kumar Duggal was assigned in the name of father before leaving India. To come under section 140(a)(ii) of the Income Tax Act, for the purpose of rules 45 and 47, if the appellant is outside India at the time of filing of the appeal before the learned Commissioner (Appeals) or before the Tribunal then at that time the power of attorney has to be issued in the name of attorney and such power of attorney should give specific, directions to act on behalf of the person who is required to file appeal and this specific power should be granted in the power of attorney.
The Power of Attorney Act, 1882, defines the execution under power of attorney in section 2 of the said Act which is reproduced as follows : "Section 2 Execution'under power of attorneyThe donee of power of attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name'and signature, and own seal, where sealing is required by the authority of the donor of the power, and every instrument and thing so executed and done, shall be effectual in law as if it had been executed or done by the, donee of the power in the name, and with the signature and seal, of the donor thereof. The section applies to power of attorney created by instruments executed either before or after this Act comes into force." The scope of section 2 is to place a person in such a way that he can act in a manner which the person in whose place he is put into can act.
The underline principle in the power of attorney recorded in section 6 is delegation of power or delegation of rights which a person is having inherent as a separate legal entity. Section 2 of the Power of Attorney Act does not give delegation of obligation and statutory duties.
Even though the Act does not specifically mention but the power of attorney does not give power to delegate illegal actions or legally wrongful acts. Section 2 simply states the general principle of agency and it cannot override specific provisions of a rule made under different independent statute which require that a particular act shall be done by a person 'personally'. This interpretation has been developed by the Hon'ble Madras High Court while deciding the case of CIT v. Rao Bahadur Ravula Subba Rao & Anr. (1946) 14 ITR 232 (Mad): AIR 1946 (33) Mad 411. The Hon'ble Justice Patanjali Sastri, J. has given following observations while deciding the issue : "Patanjali Sastri J. This reference arises out of an application made by one Hariprasada Rao before the Income Tax Officer for the renewal of the registration of a firm composed of himself and his brother Rao Bahadur Ravula Subba Rao. The application was rejected by the Income Tax Officer on the ground that it was not signed by both the partners personally as required by rule 6 of the Rules made under section 59, Income Tax Act, 1922, which provides "any firm to whom a certificate of registration has been granted under rule 4 may apply to the Income Tax Officer to have the certificate of registration renewed for a subsequent year. Such application shall be signed personally by all the partners (not being minors) of the firm, or where the application is made after the dissolution of the firm, by all persons (not being minors) who were partners in the firm immediately before dissolution and by the legal representatives of any such person who is deceased and accompanied by a certificate in the form set out below.' The assessee contended that as the other partner, Ravula. Subba Rao had gone on a long pilgrimage, he could not sign the application for renewal of the certificate of registration and that, as Hariprasad Rao held a general power of attorney from Ravula Subba Rao, his signature on behalf of the latter was sufficient compliance with the rule. The Income Tax Officer negatived the contention and rejected the application. On appeal to the Appellate Assistant Commissioner, the contention of the assessee was accepted with the result that the order of the Income Tax Officer was set aside and he was directed to take the application on his file and dispose of it according to law. On appeal by the officer to the Tribunal, Madras Bench, the Tribunal concurred with the view of the Appellate Assistant Commissioner and dismissed the appeal. On application by the CIT under section 66(2) to state a case to this court, the Tribunal has referred the following question for our decision : "Whether the word 'personally' in rule 6, IT Rules, as framed under section 59, Income Tax Act, would exclude a duly authorised agent of a partner from signing an application on behalf of the partner under section 26A, Income Tax Act ?" It is contended for the CIT that the word 'personally' used in the rule necessarily excludes acting by an authorised agent and that, therefore, the view taken by the Assistant Commissioner was erroneous in law. We agree with this contention. The learned Advocate General appearing for the assessee has drawn attention to section 2 of Power of Attorney Act, 1882, which reads thus : "The donee of a power of attorney may, if he thinks fit, execute or do any assurance, instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every assurance, instrument and thing so executed and done, shall be as effectual in law as it had been executed or done by the donee of the power in the name and with the signature and seal of the donor thereof.
This section applies to, power of attorney created by instruments executed either before or after this Act came into force.
The argument is that, by virtue of this provision, the act of Hariprasad Rao, who, as has been stated, holds a general power of attorney from Ravula Subba Rao in signing the application on behalf of the latter should be regarded as effectual in law as if Ravula Subba Rao had himself signed the application. We are unable to accept this view. This section merely states the general principle of agency and it cannot override the specific provisions of a rule made under a different statute which require, that a particular act should be done by a person personally', i.e., by himself. We answer the question referred accordingly in the affirmative. The learned Advocate General wished to raise the question that rr. 2 and 6 are ultra vires the rule making authority, the Central Board of revenue. The question has not been referred to us and we express no opinion upon it. The assessee will pay Rs. 260 for costs of the CIT. " The Hon'ble Supreme Court has held that there is no repugnancy between section 2 of the Power of Attorney Act and section 26A of the Income Tax Act.
For the purpose of section 2, there has to be assumption that there is a power of delegation available or exercisable under the existing law and the donee of power might act for and in the name of principal.
Section does not empower an agency to be created or implied in each and every case. The Hon'ble Supreme Court has decided the issue in the case of CIT v. Keshab Chandra Mandal (1950) 18 ITR 569 (SC), whereby the significance of the signature on statutory document has been elaborated. The Hon'ble Supreme Court has given following judgment on'the issue "Per court : If it were intended that the signature by an agent on a return or a memorandum of appeal, or other application will suffice as the signature of the assessee or the appellant or the applicant or the claimant, there would certainly have been some rule for constitution of such agency in writing and for the filing of the writing, constituting such agency and the agent's acceptance of it. If an agent for mere presentation of an appeal is expressly required by the rules to be duly authorised in writing and such writing has to be filed on record, I cannot think that the Act. or the Rules contemplates or permits the employment of an agent to sign an important document, namely, a return or an appeal or application without any written authority and that such agent may sign without producing, any such written authority. And yet that would be the result, for there is no provision in that behalf in the Act or in the rules. On a consideration of the provisions of the Act and of the rules, and the forms and for reasons stated above there appear to be many clear indications of the intention on the part of the legislature to insist on the personal signature of the assessee, appellant or applicant whenever his signature is required by the Act or the rules and the common law rule quifacit per alium facit per se is excluded by necessary implication or intendment of the Act and the ruls.
Dissenting judgment : No precise definition of the word 'signature' is given in the Indian Income Tax Act or in any other law. In the General Clauses Act there is no exhaustive definition of the word, It merely says what the word 'signature' shall include. It includes the affixing of a mark. In the absence of any material to the contrary the assessee had signed the return personally. In India it is a well known practice that when the executant of a document is illiterate, he simply touches the pen wherewith someone else signs his name for him. Reference in this connection may be made, to p. 972, para 1659, of Gour on the Law of Transfer. The signature made in these circumstances is personal of the executant. It is his autograph. No question of agency arises in such a situation. This is what seems to have happened here as one can guess from the frame of the question. Ignorant and illiterate people are not well versed with the law of income-tax which should be dealt with more sympathetically than was done here. They should not be penalised in the manner that the present assessee was penalised.
In the present case, the physical act of putting the mark was made by the pen or possibly by the hand of the son who was not the agent appointed by the father and was not otherwise authorised by him to sign for him. No evidence was led and there was nothing whatsoever on the record to establish that this illiterate assessee did not touch the pen or the hand of the son when the signature was affixed on the return." Coming,back to section 2 of the Power of Attorney Act, we are of the opinion that in case a signature is to be put on various statutory requirements depositions and verifications then such power inherent with any person cannot be assigned unless and until the statute is giving that power of assignment to the donor. In case such powers are given then they have to be strictly complied with. We are quite clear in our mind that in case of an agent or any other person who will sign return of income, appellate forms and verification columns must get this power specified in the power of attorney, then alone they can satisfy the condition laid down under section 140(a)(ii).
Under no circumstances, other than what is provided by section 140(a)(ii), any other person except the appellant can put his signature on the form and the verification column, under rule 45 and rule 47.
We would also like to give our observation that the power of attorney was given at a time when there was no obligation cast upon the appellant to file an appeal either before the learned' Commissioner (Appeals) or before the Tribunal. The appellant was required to file a fresh power of attorney for doing a specified act and as such power of attorney from a person who is away from India was to be signed by the 'Notary' of the country in which such person is residing and such power of attorney was to be authenticated by the Indian Embassy for the purposes of having a legal force and binding on the operational authority in India. No such power of attorney was produced before the authorities below.
We are also surprised that in the fast changing world, where communication is quick and fast, the appellant could have signed the return of income and appellate forms to be filed before the Commissioner (Appeals) and before the Tribunal himself because through courier service signed document could have reached to the appropriate authority well in time. The onus is on the appellant to explain the unavoidable circumstances for not putting his own signatures on the statutory forms. We have already discussed this issue in the case of National Insurance Co. Ltd. v. CIT (supra), where the Hon'ble Calcutta High Court has decided the significance of putting signature on a return of income.
We would also like to give the background of significance of the signatures on statutory documents relating to various forms as well as returns. These signatures are put on depositions regarding accuracy and correctness. In case such depositions are found to be inaccurate, the person is liable to prosecution under Income Tax Act as well as under other relevant related Acts. Wanchoo Committee has given significance of signature and suggested various amendments so that there is no ambiguity in case section 277 of the Income Tax Act is invoked, This was also followed by Choksi Committee which also made recommendations regarding significance of the signature on return of income and other income-tax documents. Both the committees have highlighted the significance of putting signatures on the documents and there is a uniformity of observations of both the committees that the signature should be put by the person who is legally authorised, under the Act, to put his signature. This issue has also been discussed and developed by the Hon'ble Allahabad High Court in the case of Bhawani Shankar v.State of UP, (1968) 68 ITR 873 (All). The Hon'ble Calcutta High Court has elaborated the significance of section 2 of the Power of Attorney Act and observed that where the statutory provisions are specified regarding requirement of putting signatures and verification by the designated person himself, such returns or statements cannot be under any circumstances signed and verified by any other person. These observations clearly establish that the compliance has to be very strict and has to be in accordance with the statute and not in accordance with the general power of attorney.
Keeping in view the above discussions, we are of the opinion that the learned Commissioner (Appeals) was justified in dismissing the appeal and similar Commission is committed in the appeals filed before the Tribunal by the appellant, and the same are accordingly dismissed.