GOPALAN NAMBIYAR C.J. - This is an application under s. 256(2) of the I.T. Act to compel reference of certain question of law to this court for determination and opinion. The question of law sought to be referred are :
'1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in their finding that under the specific written power given by the appellant to the chartered accountant representative the latter was legally competent to make an agreement with the ITO so as to bind the appellant
2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in their finding that the agreement made by the chartered accountant representative between himself and the ITO is binding on the appellant
3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in their finding that the addition of Rs. 15,000 made to the appellants income is correct and legal ?'
In th course of assessment proceedings for the assessment year 1970-71, the question arose as to whether certain expenses claimed to be deductible by the assessee can be allowed deduction of. The chartered accountant who was appearing for the assessee conceded that the expenditure may be disallowed and the amount of Rs. 15,000 may be added back to the income. A statement to that effect was filed by the chartered accountant. On appeal to the AAC and on further appeal to the Tribunal, the question was canvassed as to whether this concession or statement made by the chartered accountant can bind the assessee. The chartered accountant himself filed a statement before the AAC that he had no authority to make a statement that he actually did or could bind the assessee. Both the AAC and the Tribunal have recorded that the disallowance of the amount was solely on the strength of the statement made by the chartered accountant and that, but for such statement, the disallowance of the expenditure would not have been made. In these circumstances, the question had pointedly arisen for consideration as to whether and if so how far a chartered accountant is entitled to bind his client by statements made in the course of assessment proceedings. It appears to us that the question is important; and the questions, except question No. 2, do arise for consideration out of the order of the Tribunal. It appears to us to be unnecessary to consider and determine question No. 2. We accordingly allow this writ petition and direct the Tribunal to send up a reference to this court on questions Nos. 1 and 3 for determination and opinion of this court. There will be no order as to costs.
The matter was posted 'to be spoken to' today. Counsel for the revenue brought to our notice rule 191, clause (2), of the Rules framed by the High Court. The said rule reads :
'191. Petition to require Tribunal to state a case,. -(1)......
(2) An application under section 256(2) of the Act filed by an assessee shall be accompained by a certificate from the Income-tax Appellate Tribunal to the effect that the assessee has not withdrawn his application for reference under section 256(1) of the Act before the said Tribunal.'
It has submitted that no certificate as provided by the rule has accompained this application made under s. 256(2) of the Act. Counsel for the assessee stated that the application has not in fact been withdrawn, nor has the stated that the application been refunded. He invited our attention to s. 256, sub-ss. (2) and (3), which provide for making of an application for reference. These sub-secs. are as follows :
'256. (2) If, on an application made under sub-section (1), the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may within six months from the date on which he is served with notice of such refusal, apply to the High Court, and the High Court may, if it is not satisfied with the Appellate Tribunal to state the case and to refer it, and on receipt of any such requisition, the Appellate Tribunal shall state the case refer it accordingly.
(3) Where in the exercise of its power under sub-section (2), the Appellate Tribunal refuses to state a case which it has been required by the assessee to state, the assessee may, within thirty days from the date on which he receives notice of such refusal, withdraw his application, and, if he does so, the fee paid shall be refunded.' In the face of the section which does not choose to limit the substantive right of making of an application by any condistion such as production of a certificate from the Tribunal, it appear to us a little doubtful how far the purpose can be effectively achieved by a rule of the type of rule 191(2). We think it unnecessary to pronounce finally on this question in this case. As the counsel for the assessee point out, the objection that the certificate did not accompany the application, has been taken only now after the judgment was dictated yesterday, in the absence of the counsel for the revenue, at whose instance the matter was posted 'for being spoken to'. Besides, no penalty for non-compliance is provided either, by the rule; much the less is there any such provision in the section itself.
In the circumstances, we are persuaded that there is any defect which would render the application liable to be dismissed by reason of the non-production of the certificate made mention of in rule 191(2) of the rules.