Commissioner Of Income-Tax v. Anand And Co.

The Judgment of the Court was delivered by

Ajit K. Sengupta, J.:— In this reference under section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue, the Tribunal has referred for our opinion the following question of law relating to the assessment year 1979–80:

“Whether, on the facts and in the circumstances of the case, the Tribunal is right to give a finding on the validity and the authenticity of the signature of an Issuing Officer under section 148 of the Income-tax Act, 1961, in M.A No. 51/(Cal) of 1989 and in I.T.A No. 1912/(Cal) of 1985 for the assessment year 1979–80 or whether there is sufficient material on record to come to the conclusion that the purported signature on the notice issued under section 148 of the Income-tax Act, 1961, bears the signature of the Issuing Officer?”

2. Shortly stated, the facts relating to the question are that, pursuant to a notice issued under section 148 of the Act read with section 147(b), a reassessment was completed under section 143(3). In the first appeal, the Commissioner of Income-tax (Appeals) held that the initiation of the proceedings under section 147(b) was unauthorised as it resulted from a change of opinion by the successor-Assessing Officer. He, therefore, cancelled the assessment. Alongside the contention against the assumption of jurisdiction for reassessment, the assessee also raised before the Commissioner of Income-tax (Appeals), the question of validity of the notice itself issued under section 148, initial jurisdiction apart. The allegation was that the notice did not contain the distinct signature of the Income-tax Officer. On this contention, the Commissioner of Income-tax (Appeals) gave no finding inasmuch as the assessment itself had been quashed by him on grounds of want of initial jurisdiction. The Revenue preferred an appeal against the order of the Commissioner of Income-tax (Appeals) cancelling the proceedings under section 147(b) on the question of initial jurisdiction. The assessee did not, however, file any cross-appeal or cross-objection against the action of the Commissioner of Income-tax (Appeals) in ignoring the assessee's objection to the validity of the notice itself.

3. The Tribunal initially passed an order in favour of the assessee upholding the findings of the Commissioner of Income-tax (Appeals) as to the non-applicability of the provisions of section 147(b) and the invalidity of the initiation of the proceeding. The Tribunal also did not go into the question whether, apart from lack of jurisdiction, the reassessment was illegal as the notice under section 148 itself was not valid and in conformity with the requirement of section 148 itself. The Tribunal, however, eventually, on a miscellaneous petition filed by the assessee, purporting to be a petition under section 254(2), heard the assessee's pleading as regards the illegality of the notice itself by reason of the manner of signature by the Issuing Officer appearing on the notice.

4. The Tribunal finally pronounced on the question of the validity of the notice under section 148 and held that the said notice does not bear the authentic signature of the Issuing Officer.

5. At the outset, what troubles us is why the Tribunal took the extraordinary course of making such a pronouncement when this was not at all the subject-matter of appeal before the Tribunal. The statement of facts itself records that the Department contested the admission of the miscellaneous petition on the ground that the assessee, having impliedly acquiesced in the refusal of the Commissioner of Income-tax (Appeals) to deal with the point of legality of the notice, could not have made an issue. The argument resisted by the Revenue before the Tribunal appears to us to be valid in the circumstances of the case. There should not have been a place for a miscellaneous petition under section 254(2), nor the occasion for the Tribunal to pass an order thereon. By having passed an order on the miscellaneous petition in the teeth of the valid ground put forth by the Revenue's representative against the admissibility of such an application, the Tribunal's order has the indirect effect of defeating the limitation for filing an appeal, i.e, the limitation as prescribed by sections 253(2) and 253(4) of the Act. It enabled the assessee to skirt the limitation for filing the appeal or filing a cross-objection. The assessee succeeded in having its cause adjudicated upon in the garb of a miscellaneous petition without having to file any appeal or cross-objection. We cannot but hold that the Tribunal had no power of pronouncing on the grounds taken in the assessee's miscellaneous petition since the assessee could not raise that issue in the appeal of the Revenue containing the grounds against the finding of the Commissioner of Income-tax (Appeals) as to lack of inherent jurisdiction under section 147(b). The validity of the mode of issue of the notice under section 148 was not at all the subject-matter of appeal.

6. We have heard the rival submissions. The main thrust of the argument advanced on behalf of the assessee is against the manner in which the Officer has put a curved line purporting to be his signature. The assessee's counsel contends that the form of the notice at the bottom has a dotted line for placing the signature of the Income-tax Officer issuing the notice. What appears there is an undulating curve without signifying any letter so as to be the signature of a person. It has also been pointed out that it is not that the self-same Officer had always put as his signature such a curved line. There are some papers where his signature looks more like some writing. But, in the impugned notice, what appears has no semblance of any writing. Therefore, this notice under section 148 does not bear any signature and therefore, the notice is invalid.

7. We feel constrained to note that the argument goes by dispensable hypertechnicality. A signature in many a case does not look like any writing but as a mere pattern not decipherable as any writing. We would not have any hesitation in setting aside the assessee's contention but for the fact that, in some other documents, the self-same Officer has signed not simply by putting a curved line.

8. Mr. B.K Bagchi, learned counsel for the Revenue, in the first instance, pointed out that the Tribunal's finding is not that the notice bears no signature. The Tribunal found that merely the manner of signing is such as detracts from its authenticity and its legal efficacy to make the notice effective and valid. Therefore, the Revenue's contention is that the judicial opinion that an unsigned notice or a quasi-judicial document cannot be valid as such is not relevant to the case made out by the assessee and accepted by the Tribunal. Here is a notice bearing a signature but in a manner that detracts from its authority.

9. The broad submission of the Revenue's learned counsel is that the bsence of, or a defect in, the signature in any notice, summons, is immaterial for the efficacy of the said notice or summons so long as the source of the notice or the document is neither questioned nor questionable, more so, when it bears the seal of the office of the authority.

10. He made a further submission that the absence of, or defects in, signature is not an illegality. It may be, at the worst, an irregularity not fatal to the notice or the summons. In that connection, he cited in support the decision of this court in Sheonath Singh…Applicant; v. Commissioner Of Income-Tax, West Bengal…., [1958] 33 ITR 591, and the decision of the Patna High Court in Gouri Kumari Devi v. CIT, [1959] 37 ITR 220. He also referred to the provisions of Order 6, rule 14 and Order 5, rule 10 of the Civil Procedure Code where the word “signed” appears. The Judicial Committee of the Privy Council, in the context of the said provisions in Mohini Mohun Das v. Bungsi Buddan Saha Das, [1889] ILR 17 (Cal) 580, has held that the omission or failure on the part of the plaintiff to sign the plaint is a mere irregularity and the omission is not a vital defect. The same has been the view taken by the Madras High Court in Lodd Govindoss Krishnadas Vara v. P.M.A.R.M Muthiah Chetty, AIR 1925 Mad 660. It is pointed out that these decisions were rendered despite the requirement of Order 6, rule 14, of the Civil Procedure Code that every pleading shall be signed by the party or his pleader. Reference was further made to B.K Gooyee v. Commissioner Of Income-Tax, [1966] 62 ITR 109 (Cal). There it has been held, inter alia, that a notice under section 34 (corresponding to section 147/148 of the Income-tax Act, 1961), which does not contain the signature of the Income-tax Officer who issues it is invalid. This irregularity cannot be retrieved by the plea of waiver by the assessee or his counsel because the irregularity is not one of merely procedural character. Our attention was drawn to the fact that this court, while delivering that judgment, deprecated such a notice as one containing an irregularity but not an illegality. Therefore, it cannot be said that the decision supports the case of the assessee, more so when, in the instant case, it is not that the notice contains no signature. The case made out against the Revenue is that the signature contained in the notice is of doubtful authenticity. So the present case is radically distinguishable from B.K Gooyee's case, [1966] 62 ITR 109 (Cal). Learned counsel for the Revenue also cited Sethani Chhoti Debt v. Union of India, [1964] 51 ITR 473, where this court permitted a signature to be rubber stamped, such stamp of signature being considered sufficient.

11. We have gone through the various decisions cited at the Bar. For our purpose, more pertinent than others is the decision of this court in Sethani Chhoti Debt's case, [1964] 5??? ITR 473, where the rubber stamp of the signature was held as sufficient. What weighed with the court for so deciding is that, unless a shadow is cast on the identity of the person issuing the notice, no fault should be found with regard to such technical aspect of the matter. What is of the utmost importance is whether the person issuing the notice was identified. It cannot be said that the person was not identified because we find that the order-sheet recording the reasons leading to the issue of the notice under section 148 is also signed by the self-same Officer in a similar fashion, i.e, a curvature of a line drawn. Moreover, the notice issued shows the PAN of the assessee, the source of the issue, i.e, the Income-tax Officer V(1)/A-Ward/(Cal). The order-sheet also contains a similar curved line that passes for the signature of the Officer concerned. One argument may be that the Officer, by the curved line drawn, only set out his initials and not his full signature. By putting the initials, the Officer might have left a defect but such defect should not be fatal. It is also a fact that the Officer was quite identifiable and was, in fact, identified by the assessee as it is evident that the assessee, in due compliance with the said notice, filed its return. The notice is dated March 12, 1984, while the return pursuant thereto was filed on April 16, 1984. There was no misapprehension in the assessee's mind as to the dubious nature of the notice or dubiousness of the identity of the Officer issuing the notice.

12. In our view, the Tribunal has taken an unduly technical view of the whole matter. The judiciary in this country has never gone on technical triviality. Even in the litigation of private parties, the courts have shown a wide measure of forgiveness in similar acts of omission or failure as pointed out by learned counsel for the Revenue. (See Gouri Kumari Devi's case, [1959] 37 ITR 220). At page 223 of the Reports, the Patna High Court has observed as follows:

“With regard to the analogous provisions of Order 6, rule 14, there is authority for the view that the omission or failure on the part of the plaintiff to sign the plaint is a mere irregularity which can subsequently be rectified and the omission is not a vital defect. That is the view expressed by the Judicial Committee in Mohini Mohun Das v. Bungsi Buddan Saha Das, [1889] ILR 17 (Cal) 580 and by the Madras High Court in Lodd Govindoss Krishnadas Vara v. P.M.A.R.M Muthiah Chetty, AIR 1925 Mad 660.”

13. Learned counsel for the Revenue further cited Brahmaiah (Velivalli) v. Emperor, AIR 1930 Mad 867 : [1930] 59 MLJ 674, where the Madras High Court held that a judgment of a Bench of Magistrates has to be signed as required by law and the requirements of public policy necessitate the writing of the full name of the Magistrate that signs the judgment and the mere putting of the initials is not sufficient compliance with the mandatory provisions of section 265 of the Criminal Procedure Code (V of 1889). At the same time, the said High Court also held that illustration to section 537 of the old Act, viz., “the Magistrate being required by law to sign a document signs it by initials only.” This illustration has been omitted in the amended Act. According to the court, the omission indicates that the Legislature no longer views the initialling of the order instead of signing it as a defect affecting the validity of the proceeding.

14. This also supports that, even if the curved line appearing as the signature is actually the initials of the Issuing Officer as is the only likely case, the notice survives. In view of similar curved line appearing in the order-sheet, the notice under section 148 cannot be said to be illegal.

15. The Tribunal questioned the authenticity of the notice. But the assessee never questioned the authenticity. The assessee's case was that the said curved line cannot be treated as a signature. The fact, however, remains that the assessee was quite sure of the authenticity of the person drawing the curved line as signature and that can alone explain why the assessee accepted the notice as one emanating from an authentic source. We, therefore, do not see eye to eye with the Tribunal on this matter.

16. We shall have to bear in mind that if, in any civil litigation, the court can grant the concession of admitting an unsigned plaint or memorandum of appeal, why should the Tribunal take so rigid a view and make a fetish of the requirement of full signature legible or decipherable when the matter affects one of great public importance, that is, the revenue of the people. There must be some reasonable amount of elasticity in the sphere of procedures involving the collection of due revenue and securing due relief to taxpayers.

17. In our view, the Revenue authorities, even if not genial and concession-oriented, must act uninfluenced by procedural technicalities in guarding the public exchequer as well as the taxpayer against undue jeopardy by inflexible interpretation of the procedural laws except where the law puts absolute fetters without leaving any scope for relaxation. It is not that the Legislature is not conscious of the salutary need of such an approach. It is precisely from that awareness that the provisions of section 292B were introduced and grafted as part of the statute, enjoining that procedural rigidity should not stand in the way of substance of the procedure. The said provisions are set out below:

“292B. Return of income, etc., not to be invalid on certain grounds.— No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.”

18. This clearly shows that this provision is meant to meet the situation like the one present before us. The Supreme Court in CIT v. Calcutta Discount Co. Ltd., [1973] 91 ITR 8, at page 11, observed:

“The procedure adopted by the Tribunal appears to us to be somewhat strange. The Tribunal, instead of dealing with the substance of the matter, appears to have been unduly influenced by procedural technicalities.”

19. This is precisely what the Tribunal did in the instant case.

20. Accordingly, we hold that the conclusion of the Tribunal is erroneous. We answer the first limb of the question negatively holding that the Tribunal had no occassion and, therefore, no authority to give a finding on the validity and authenticity of signature of the issuing authority and answer the second limb of the question affirmatively holding that there is sufficient material on record to come to the conclusion that the purported signature bears the signature of the Issuing Officer. In its entirety, we answer the question in favour of the Revenue. There will be no order as to costs.

Shyamal Kumar Sen, J.:— I agree.