1983 (11) TMI 112 - AT - Wealth-tax

Tribunal allows appeal despite signature issue; firm competent to represent based on Wealth-tax Rules

The Tribunal held that the first memorandum of appeal, lacking Mrs. Koder's signature, was valid due to the firm's competence to act on her behalf. ... Appellate Assistant Commissioner Issues:1. Validity of the first memorandum of appeal due to lack of signature of Mrs. Koder.2. Entitlement of the second memorandum of appeal for condonation of delay.3. Competency of the firm of chartered accountants to act on behalf of Mrs. Koder.4. Interpretation of rule 5(2)(a) of the Wealth-tax Rules, 1957.5. Consideration of circumstances for condonation of delay in filing the second memorandum of appeal.6. Application of section 42C of the Wealth-tax Act, 1957.Detailed Analysis:1. The first issue revolves around the validity of the first memorandum of appeal, which was rejected by the AAC due to the absence of Mrs. Koder's signature. The Tribunal analyzed Rule 5(2)(a) of the Wealth-tax Rules, 1957, which allows the memorandum of appeal to be signed by any person competent to act on behalf of the individual. The Tribunal concluded that the conditions specified in the rule were met as it was impossible for Mrs. Koder to sign in Bombay while residing in Cochin. The Tribunal held that the first memorandum filed on 28-4-1982 was valid and should not have been rejected, citing the firm's competence to act on Mrs. Koder's behalf.2. The second issue pertains to the second memorandum of appeal and the failure to file a formal application for condonation of delay by the firm of chartered accountants. Despite this oversight, the Tribunal found that the circumstances leading to the delay in filing the second memorandum were satisfactorily explained. The Tribunal noted that the delay was due to postal delays and the firm's negligence in not filing a formal application for condonation. However, the Tribunal deemed it a fit case for condonation and held that the second memorandum of appeal should have been entertained.3. The competency of the firm of chartered accountants to act on behalf of Mrs. Koder was a crucial aspect considered by the Tribunal. Despite the absence of a formal power of attorney dated before 28-4-1982, the Tribunal inferred from the circumstances that the firm was competent to act on Mrs. Koder's behalf. The Tribunal highlighted the firm's long-standing representation of Mrs. Koder before taxing authorities and the acceptance of service of assessment orders on her behalf. Consequently, the Tribunal concluded that the firm was competent to act on Mrs. Koder's behalf, as indicated by the circumstances.4. The Tribunal extensively interpreted rule 5(2)(a) of the Wealth-tax Rules, 1957, emphasizing the reasonable impossibility for an individual to sign and the competency required for a person to act on behalf of another. The Tribunal clarified that the rule did not necessitate an absolute impossibility but rather a reasonable one. By considering the circumstances and the firm's actions, the Tribunal concluded that both conditions specified in the rule were satisfied in this case.5. The Tribunal also considered the circumstances leading to the delay in filing the second memorandum of appeal and the AAC's observations regarding the lack of explanation for the delay. The Tribunal disagreed with the AAC, noting the postal delays and the firm's explanation for the delay in filing. The Tribunal found the explanation satisfactory and deemed it a fit case for condonation of delay, leading to the conclusion that the second memorandum should have been entertained.6. Lastly, the Tribunal briefly addressed the alternative argument based on section 42C of the Wealth-tax Act, 1957, which deals with the validity of proceedings despite mistakes or defects. While the Tribunal acknowledged this contention, it did not find it necessary to express a view on this aspect, as the appeal was allowed based on the issues discussed above.