1956 Supreme(SC) 45

SUPREME COURT OF INDIA
9th May 1956
S.R. DAS, C.J.I., BHAGWATI AND VENKATARAMA AYYAR, JJ.
Rayulu Subba Rao and others. ... Appellants.
Versus
Commr. of Income-tax, Madras ..... Respondent.
Civil Appeals Nos. 56 and 57 of 1954.
Advocates appeared
For Appellants : Mr. K. S. Krishnaswami Iyengar, Senior Advocate.
(Mr. K. R. Choudhry, Advocate with him).
For Respondent: Mr. G. N. Joshi and P. G. Gokhale, Advocates.

Headnote:Sections 26A, 59-Income tax Rules (1922) Rr. 6, 2-Meaning of "personally"-Whether excludes a duly a authorised agents from signing an application on behalf of the partner-Rules not ultra vires.

       The appellant was a firm constituted under a deed of partnership dated 10-2-1941 and consisted of two partners, S and H. On 21-31942 it was registered under section 26-A of the Indian Income-Tax Act No. XI of 1922 for the assessment year 1942. Sometime thereafter one of the partners, S, was stated to have left on a long pilgrimage and the affairs of the partnership were then managed by H as his agent under a general power of attorney dated 1-7-1940. H then applied under rules 2 and 6 of the rules framed under section 59 of the Act for renewal of the registration certificate for the year 1942-43, and she application was signed by him for himself and again as the attorney of S. Those rules provide that an application for registration of a firm under section 26-A and for renewal of registration certificate "shall be signed personally by all the partners:" The Income-Tax Officer rejected the application for renewal on the ground that it was not personally signed by one of the partners, S, and that the signature of H as his agent was not valid. The order was taken in appeal, and was ultimately the subject of a reference under section 66(1) of the Act to the High Court of Madras, which held that the word personally in rule 6 required that the partner should himself sign the application, and the principles of agency under the general law were excluded.

       While these proceedings were pending, H filed two applications for renewal of registration certificate for the assessment years 1943-44 and 1944-45. Both of them were signed by him for himself and as attorney for S. At the hearing of these petitions the appellant, apart from maintaining that rules 2 and 6 did not, on their true construction exclude signature by an agent on behalf of a partner, raised a further contention that the rules themselves were ultra vires the powers of the rules making authority. The Income-Tax Officer overruled both these contentions, and rejected the applications and his orders were confirmed on appeal by the Appellate Assistant Commissioner and then by the Appellate Tribunal. Thereafter, on the application of the appellant the Tribunal referred the following questions for the decision of the High Court:

       "(1) Whether the word "personally in the Income-tax Rules, as framed under section 59 of the Income-tax Act would exclude a duly authorised agent of a partner from signing an application on behalf of the partner under section 26-A of the Income-tax Act ?

       (2) If the answer to the above question is in the affirmative, whether rules 2 and 6 are ultra vires the rule making authority.1"

       The first question was answered in the affirmative. On the second question the learned judges of the High Court differed. They however granted a certificate under section 66-A of the Act and the appeals came before the Supreme Court.

       Held: (1) The word personally, in the Income-tax Rules as framed under section 59 of the Income-tax Act, exclude a duly authorised agent of a partner of a firm signing an application on behalf of the partner under section 26-A of the Income-tax Act.1

       The question is whether on its true interpretation, the statute intended that an application under section 26-A should be signed by the partner personally, or whether it could be signed by his agent on his behalf. To decide that, we must have regard not only to the language of section 26-A but also to the character of the legislation, the scheme of the Act and the nature of the right conferred by the section. The Act is, as stated in the preamble, one to consolidate and amend the law relating to income-tax. We must therefore construe the provisions of Indian Income-tax Act as forming a code complete in itself and exhaustive of the matters dealt with therein, and ascertain what their true scope is. The provisions of the Act show an intention to depart from the common rule, qui facit per alium facit per se. Its intention again is that a firm should be given benefit of section 23 (5) (a), only if it is registered under section 26-A in accordance with the conditions laid down in that section and the rules framed thereunder. And as those required the application to be signed by the partner in person, the signature by an agent on his behalf is invalid.

       (2) Rules 2 and 6 are not ultra vires the rule making authority. - Powers of Attorney Act, 1882, Section 2-Object of-No repugnancy between S. 2 and S. 26A of the Indian Income-tax Act, 1922Rr. 2, 6 of the Income tax Rules (1922) not ultra vires.

       Held: The object of S. 2 of the Powers of Attorney Act, 1882, is to effectuate instruments executed by an agent but not in accordance with the rule of the common law and the enactment is more procedural than substantive. It does not confer on a person a right to act through agents. It presupposes that the agent has the authority to act on behalf of the principal, and protects acts done by him in exercise of that authority but in his own name.

       1. A.I.R. 1937 Born. 39 approved.

       But where the question is as to the existence or the validity of authority, the section has no operation. Thus, the fields occupied by the two enactments are wholly distinct. Section 26-A of the Income" tax Act, 1922 says that a partner cannot delegate the exercise of his rights under that section to an agent. Section 2, Powers of Attorney Act says that if there can be and, in fact there is, delegation it can be exercised in the manner provided therein. There is accordingly no conflict between the two sections, and no question of repeal arises. The rules cannot therefore be objected to as repugnant to S. 2 of the Act and therefore ultra vires.

       See also under "Income-tax Act" at pp. 1033, 1034 ante.