G.K. Misra, C.J. -
(1.) THE question that has been referred to this court under Section 256(1) of the Income-tax Act, 1961, runs thus:
" Whether in the presence of the karta of the Hindu undivided family, it is lawful for a member of the Hindu undivided family to sign and verify the memorandum of appeal before the first appellate authority and, if so, whether the said appeal so presented suffers from a curable irregularity or is illegal?"
(2.) THE facts out of which the aforesaid question has been referred have been stated clearly in the order of reference.
The assessee is a Hindu undivided family consisting of Shri K.P. Sahu and Shri Padmalochan Sahu who are related as father and son. Against the order of assessment passed by the Income-tax Officer the assessee filed an appeal on March 15, 1967, before the Appellate Assistant Commissioner. The appeal petition was not signed ,by any member of the joint family, but was signed by one S.C. Das, authorised representative. The Appellate Assistant Commissioner noticed the defect and issued a show-cause notice to the assessee as to why the appeal should not be dismissed as not having been signed and verified in accordance with law. By a letter dated August 23, 1967, the assessee asserted that the defect was not an illegality, but was an irregularity which could be rectified. On that very date another appeal petition in prescribed Form No. 35 signed at requisite places by the son, Padmalochan Sahu, was filed. As he was not the karta of the family the appellate authority held that the memorandum of appeal had not been properly presented and he, accordingly, dismissed the appeal. The assessee filed a second appeal before the Appellate Tribunal which was of opinion that the memorandum of appeal should have been signed by the karta of the family. Despite this, however, the appeal was allowed with a direction that a further opportunity should be given to the assessee to rectify the defect, that is to say, to allow the karta of the family to sign the memorandum of appeal and thereafter to dispose of the appeal in accordance with law. Being aggrieved by this order of the Tribunal the present reference has been made.
Before answering the question, Rule 45(2)(b) of the Income-tax Rules, 1962, may be noticed. It runs thus :
Rule 45(2) :
" The form of appeal prescribed by Sub-rule (1), the grounds of appeal and the form of verification appended thereto shall be signed-
(b) in the case of a Hindu undivided family, by the karta, and, where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family. "
This rule, therefore, prescribes in unequivocal terms that the memorandum of appeal in Form No. 35 should have been signed in this case by the karta of the family which was, in fact, not done. The subsequent rectification when another appeal was filed did not conform to the rules inasmuch as the son, Padmalochan Sahu, was not the karta of the Hindu undivided family.
It is, therefore, clear that the required rule was not complied with by the assessee in filing the memorandum of appeal. That rule is mandatory in the sense that the karta must sign the memorandum of appeal.
The question for consideration, however, is whether for non-compliance of the rule the memorandum of appeal should be treated as a nullity, or whether an opportunity should be given to the assessee to rectify the defect. There is a direct decision o'f the Calcutta High Court in Sheonath Singh v. Commissioner of Income-tax, 1958 33 ITR 591. A thorough discussion of the authorities on elementary legal principles as applicable to the filing of a plaint and a memorandum of appeal under Order VI, Rule 14, and Order XLI, Rule 1, Civil Procedure Code, respectively was made in this case and their Lordships ultimately came to the conclusion that when under the Civil Procedure Code if such a defect occurred both in relation to the signing of the plaint as well as the memorandum of appeal, an opportunity is to be given for rectification of the defect, and there was no justification to take a harsher view in relation to filing of an appeal before the Appellate Commissioner of Income-tax. A similar view was taken in Anirudha Behera v. Dhanu Behera, I.L.R. 1961 Cut. 430 though not under the Income-tax Act. We are clearly of opinion that the aforesaid conclusion is based on sound reasoning. The first and the second appellate authorities would, therefore, treat such defect as an illegality for which opportunity should be given for rectification. If after opportunity is given the assessee still does not remove the defect, then clearly the rule would operate and the memorandum of appeal is liable to be dismissed. It is in that sense that the law becomes mandatory at that stage.
It is, however, remarkable to notice that both the Appellate Assistant Commissioner and the Appellate Tribunal have clearly come to the conclu- sion that the memorandum of appeal should have been signed by the karta of the family. There was, therefore, no necessity to make a reference to this court by framing the first part of the question which was not in controversy. The first part of the question is to the effect:
" Whether in the presence of the karta of the Hindu undivided family, it is lawful for a member of the Hindu undivided family to sign and verify the memorandum of appeal before the first appellate authority ? "
The answer must obviously be in the negative, that is to say, it is the karta alone and not any other member of the joint family that would sign. As we have stated, this part of the question need not have been referred to this court as there was no controversy on the point.
The second part of the question was also not called for to be referred to, inasmuch as both the Appellate Assistant Commissioner and the Tribunal themselves were of opinion that opportunity should be given. In fact, the Appellate Assistant Commissioner himself granted a further opportunity when the assessee filed another appeal to rectify the defect.
The difference between the Appellate Assistant Commissioner of Income-tax and the Tribunal lies within a narrow compass purely in the matter of exercise of discretion. The first appellate authority gave one chance for rectification, and on the failure thereof the appeal was dismissed. The Tribunal, however, was of opinion that a further opportunity should be given for rectification as on the second occasion the assessee, committed another mistake by not getting the memorandum of appeal signed by the karta, but by his son. This being a matter of discretion, the Appellate Tribunal is to exercise it as it thinks proper as the last court of fact. Strictly speaking, the question referred to us should not have been referred. As, however, the question has already been referred we answer it by saying that the first part would be answered in the negative and the second part by saying that the defect was an illegality, but such defect should be allowed to be rectified by giving proper opportunity to the assessee.
This reference is answered accordingly,
S.K. Ray, J.