Bombay H.C : The appellants-assessees have filed their return of income for the year 1993-94 on 27th Oct., 1993, declaring the total income as nil.

High Court Of Bombay

Malani Trading Co. & Anr. vs. CIT & ANR.

Section ITAT Rule 4A(2)

Asst. Year 1993-94

J.N. Patel & P.S. Brahme, JJ.

IT Appeal Nos. 2 & 3 of 2000

5th February, 2001

Counsel Appeared

S.N. Bhattad, for the Appellants : A.S. Jaiswal, for the Respondents

JUDGMENT

J.N. PATEL, J. :

Rule made returnable forthwith. Heard learned counsel for the parties.

2. The appellants-assessees have filed their return of income for the year 1993-94 on 27th Oct., 1993, declaring the total income as nil. On being assessed the AO passed an order of assessment dt. 29th March, 1996,determining the income at Rs. 6,09,000 (ITA No. 2 of 2000) and Rs. 5,38,444 (ITA No. 3 of 2000) and passed the assessment orders which were impugned by the appellants in the appeals filed before the CIT under s. 249 of the IT Act, 1961. The same came to be dismissed. Being aggrieved by the said order, the appellants then moved the IT Tribunal, Nagpur, under s. 253(1) of the IT Act, 1961, by filing appeals in the prescribed Form No. 36 as provided under r. 47(1) of the IT Rules, 1962 (for short the “said Rules”). Form No. 36 is required to be signed at three places by the appellants, one in front of the form below item No. 12 and at two places on the reverse side. One of the signatures on the reverse side of the form is to be affixed below the “verification”. The appellants did not sign the “verification” statement but the appellants have signed the form at two other places as per the requirement. On the appeals being presented it was placed before the Tribunal after being registered. When the Tribunal took up the appeals for admission, it was dismissed by passing the impugned order dt. 16th May, 2000.

The Tribunal observed that failure on part of the appellants in verifying the appeals is not a curable defect by placing reliance on various decisions. It was also held that neither the Tribunal nor the Registry of the Tribunal is in any way mandatorily obliged to look into and search for a defect and bring it to the notice of the appellants or his authorised representatives requesting them to rectify the defects and thereafter proceed to admit and entertain the appeals in accordance with the law. It is thus not the legal duty of the Tribunal or Registry of the Tribunal to point out flaws. Moreover, lack of verification and non-subscribing the signature in the statutory appeal forms, though mandated by law cannot constitute a defect or irregularity to be cured at the instance of this Tribunal or at the request of the Registry of the Tribunal. This omission goes to the root of the matter and affects the jurisdiction of the Tribunal. Thus, the appeals were treated as invalid and came to be dismissed.

3. Learned counsel appearing for the appellants has drawn our attention to the Income-tax (Appellate Tribunal) Rules, 1963, which regulate the procedure of the Tribunal and procedure of the Benches and submitted that the Tribunal without giving an opportunity to the appellants to rectify the defect has dismissed the appeals.

4. Rule 4A of the said rules vests certain powers and functions on the Registrar of the Tribunal. The relevant portion of the rule reads as under : “4A.(1) The Registrar shall have . . . (2) Subject to any general or special order of the President, the Registrar shall have the following powers and duties, namely :…… (iii) to scrutinise all appeals and applications so received to find out whether they are in conformity with rules ; (iv) to point out defects in such appeals and applications to the parties requiring them to rectify by affording reasonable opportunity and, if within time so granted defects are not rectified, to obtain the orders of the Bench for the return of the appeals and applications.”

5. In our opinion the learned Members of the Tribunal overlooked the procedural aspect of the matter by ignoring r. 4A(2)(iii) and (iv) of the said rules. On receiving the appeals preferred by the appellants it was incumbent on the Registrar to have scrutinised the appeals and applications whether they are in conformity with the rules and point out the defect in such applications requiring them to rectify by affording reasonable opportunity within time and on failure of the parties to do so to obtain orders of the Bench for return of the appeals and the applications. We do not find that the Registrar has undergone such exercise and placed the matter before the Tribunal which found the appeals to be not maintainable for want of verification being sworn by the appellants by affixing the signatures as required and which has resulted in miscarriage of justice. Even otherwise rules of procedure are intended to be a handmaid to the administration of justice. A party cannot be refused just relief merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure [see Jai Jai Ram Manohar Lal vs. National Building Material Supply AIR 1969 SC 1267]. Therefore, we quash and set aside the impugned orders and restore the presentation of the appeals and direct the Registrar of the Tribunal to scrutinise the same and intimate the defects to the appellants by giving them time to remove such defects and then the matter be placed before the Tribunal for further adjudication in accordance with law. Rule made absolute in the aforesaid terms with no order as to costs.

[Citation : 252 ITR 670]

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