Rajpal and Co. vs Commissioner of Income Tax

Arijit Pasayat, C.J.—At the instance of the assessed, the following questions have been referred for the opinion of this court u/s 256(1) of the Income Tax Act, 1961 (for short "the Act"), by the Income Tax Appellate Tribunal. Delhi Bench "E", New Delhi (for short "the Tribunal") :

" 1. Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the first appeal filed by the asses-see-firm before the Appellate Assistant Commissioner on April 14, 1978, was bad for not containing the grounds of appeal ?

Whether, on the facts and circumstances of the case, the Tribunal ought to have held the said omission to be of the nature of a mere irregularity and ought to have allowed the omission to be supplied ?"

The assessed''s first appeal was dismissed on the ground that it was not accompanied by a memorandum of appeal. Analysing the factual position, the Tribunal held that the first appeal filed by the assessed was not maintainable for not containing the grounds of appeal and, Therefore, the rejection thereof by the Commissioner of Income Tax (Appeals) (in short "the CIT(A)"), was proper. Before the Tribunal certain materials were placed to show that the grounds of appeal had been filed but they were not signed by the authorised person. The Tribunal upheld the action of the Commissioner of Income Tax (Appeals) in not entertaining the appeal and did not go into the merits though the assessed addressed the Tribunal on this aspect. On being moved for a reference, the questions as set out above have been referred for the opinion of this court.

We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessed in spite of notice. Learned counsel for the Revenue submitted that the appeal itself was not competent in terms of Section 249(1) of the Act and it could not be said to be a defect of irregular nature. The Tribunal analysed as to what were the deficiencies and came to hold that the appeal before the Appellate Assistant Commissioner (in short "the AAC") was not entertainable.

The question whether the omission was irregular or there was any fatality attached to it is really of academic interest in view of what has been stated by the apex court in Mela Ram and Sons Vs. The Commissioner of Income Tax Punjab, . The Tribunal ought to have heard the appeal on the merits. That being the position we remit the matter back to the Tribunal for hearing the appeal on the merits without attaching any importance to the question as to whether the appeal before the Appellate Assistant Commissioner was competent and entertainable or not. We make it clear that we have not expressed any opinion on the merits of the case. The reference stands disposed of.