Threshold rejection of income-tax appeal still counts as an appellate order where procedural compliance would require the impossible.

An order rejecting an income-tax appeal in limine for non-compliance with the prescribed form and non-attachment of the demand notice was treated as a disposal of the appeal under the appellate provision. The statutory scheme was read to include not only decisions on the merits but also determinations on the preliminary question whether an appeal lies. Where the assessee claimed that no demand notice had been served, insistence on attaching that notice would compel compliance with an impossibility; the proper course was to verify that factual assertion and, if accepted, admit the appeal for decision on merits. The threshold rejection without such enquiry was characterised as capricious and not judicial.

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Issues: Whether an order of the Appellate Assistant Commissioner rejecting an appeal in limine for non-compliance with the prescribed form and for non-attachment of the demand notice is an order under Section 31 of the Indian Income-tax Act, and whether such an order can support a reference to the High Court.

Analysis: An order refusing to entertain an appeal for want of compliance with a procedural requirement is nevertheless a disposal of the appeal by the appellate authority. The statutory scheme does not confine Section 31 to decisions on the merits alone; a determination on the preliminary question whether an appeal lies is also an exercise of appellate jurisdiction. Where the assessee asserts that no demand notice was ever served, rigid insistence on attaching that notice to the memorandum of appeal would require performance of an impossibility. The proper course was to enquire into that factual assertion and, if accepted, admit the appeal and decide it on merits. The rejection of the appeal without such enquiry was capricious and not judicial.

Conclusion: The order of the Appellate Assistant Commissioner dated 31 August 1941 was an order under Section 31 of the Indian Income-tax Act. Questions Nos. 2 and 3 did not require answer and the assessee was entitled to costs.

Ratio Decidendi: An appellate order rejecting an appeal at the threshold on a preliminary objection is still an order under the appellate provision if it disposes of the appeal, and procedural rules cannot be applied to require the impossible where the foundational notice was not served.

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