Venkatarama Ayyar J. - (1.) The appellant is a firm which was constituted under a deed of partnership dated 10-2-1941, and consists of two partners, Subba Rao and Hariprasada Rao. On 21-3-1942 it was registered under S. 26-A, Indian Income-tax Act, 11 of 1922, hereinafter referred to as the Act, for the assessment year 1942. Sometime thereafter, one of the partners, Subba Rao, is stated to have left on a long pilgrimage, and the affairs of the partnership were then managed by Hariprasada Rao as his agent under a general power-of-attorney dated 1-7-1940. Hariprasada Rao then applied under Rr. 2 and 6 of the rules framed under S. 59 of the Act, for renewal of the registration certificate for the year 1942-43, and the application was signed by him for himself and again as the attorney of Subba Rao. Those Rules provide that an application for registration of a firm under S. 26-A and for renewal of registration certificate "shall be signed personally by all the partners". The Income-tax Officer rejected the application for renewal on the ground that it was not personally signed by one of the partners, Subba Rao, and that the signature of Hariprasada Rao as his agent was not valid. The order was taken in appeal, and was ultimately the subject of a reference under S. 66 (1) of the Act to the High Court of Madras, which held that the word "personally" in Rs. 6 required that the partner should himself sign the application, and that the principles of agency under the general law were excluded. Vide commr. of Income-tax vs. Subha Rao, I L R (1947) Mad 167.
(2.) While these proceedings were pending, Hariprasada Rao filed the two applications, out of which the present appeals arise, for renewal of the registration certificate for the assessment years 1943-44 and 1944-45. Both of them were signed by him for himself and as attorney for Subba Rao. At the hearing of these petitions the appellant, apart from maintaining that Rs. 2 and 6 did not, on their true construction, exclude signature by an agent on behalf of a partner, raised a further contention that the Rules themselves were ultra vires the powers of the rule-making authority. The Income-tax Officer overruled both these contentions, and rejected the applications, and his orders were confirmed on appeal by the Appellate Assistant Commissioner and then by the Appellate Tribunal. Thereafter, on the application of the appellant, the Tribunal referred the following questions for the decision of the High Court: "1. Whether the word 'personally' in the Income-tax Rules, as framed under S. 59, Income-tax Act would exclude a duly authorised agent of a partner from signing an application on behalf of the partner under S. 26-A, Income-tax Act 2. If the answer to the above question is in the affirmative, whether Rr. 2 and 6 are ultra vires the rule making authority -
(3.) The reference was heard by Satyanarayana Rao and Viswanatha Sastry, JJ. Following the decision in ILR (1947) Mad 167 they answered the first question in the affirmative. On the second question, however, they differed. Satyanarayana Rao J. held that the Rules were ultra vires, and that the applications were in order, and ought to have been granted. Viswanatha Sastry J. was of the contrary opinion, and held that the Rules were intra vires, and that the applications were properly rejected as not being in accordance with them. The learned Judges, however, granted a certificate under section 66-A of the Act, and that is how the appeals come before us.;