The judgment emphasizes the need for substantial compliance with the rules of procedure and holds that procedural irregularities may be curable and rectifiable, especially when the appeal is filed within the period of limitation.

( 1 ) THIS Income Tax reference was returned unanswered vide order of the court dated 5th August, 2004 because nobody was present on behalf of the appellant on that date. The assessee filed an application being CM No. 2034/2005, for recalling of the order dated 5th August, 2004, for restoration of the reference to the file and for hearing of the matter on merits in accordance with law. This application was allowed by the Court vide a detailed order dated 14th February, 2005 vide which order dated 5th August, 2004 was recalled and we directed the matter to be heard on merits.

( 2 ) ON that very day, the matter was heard on merits and reserved for orders.

( 3 ) THE controversy in the present reference revolves around a fine distinction between the expressions illegality , irregularity , procedural irregularity , and whether it is curable or should proved fatal to the case of the assessee?

( 4 ) BEFORE we proceed to determine the various legal facets of this aspect of law, it would be appropriate for us to refer to facts giving rise to the present reference.

( 5 ) THE assessee in the relevant assessment year 1978-79 was a partnership concern, and was assessed for income tax purposes by the Income Tax Officer, Law circle -II, New Delhi. The assessee filed the return of the partnership concern on 30th October, 1978 showing loss of Rs. 1,27,133/ -. Notice under Section 143 (2) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) was issued to the firm which was asked to file details of various expenses claimed, and support the same by various documentation. The Chartered Accountant of the firm appeared before the assessing Officer in response to the said notice. Vide order dated 25. 9. 1981 the assessing Officer determined the taxable income of the firm at Rs. 9,46,713/- and after providing permissible deductions, demanded tax on a sum of Rs. 7,22,313/ -. Against this order, the assessee preferred an appeal before the Income Tax Appeals (Delhi ). The memorandum of appeal which was filed on 23. 10. 1981 was signed and verified by Shri K. S. V. S Manian, partner of the Chartered Accountant Firm, M/s. V. Sankar Aiyer and Company, stated to be authorised representative of the assessee firm. The Commissioner, Income Tax (A) while relying upon the provisions of Rule 45 (2) (cc) dismissed the appeal as being not signed by a competent person in terms of those provisions. The appellate authority vide its order dated 26. 10. 1981 laid emphasis on the plea that the appeal was a right given by the Statute and can be availed by scrupulously fulfilling the conditions required for filing of such an appeal. Against the order of the First Appellate Authority, the assessee filed an appeal before the Income Tax Appellate Tribunal being ITA No. 4620 (Delhi)/1981 which was also dismissed. The Tribunal vide its order dated 19. 7. 1982 affirmed the view taken by the First Appellate Authority and held that the judgment in the case of Agricultural Income Tax vs. Keshav Chandra (1950) 18 ITR 569 (SC) was squarely applicable to the present case rather than the case of Jai Manohar Lal vs. National Printing Supply (1970) 1 SCR 22 and Commissioner of Income Tax vs. Calcutta Discount Company ltd. (1973) 91 ITR 8 (SC ).

( 6 ) THE Assessee sought reference to the High Court in terms of the provisions of the Income Tax Act and presented as many as 12 questions before the tribunal. The Tribunal vide its order dated 2. 4. 1983 referred the following 3 questions to this Court:- 1. Whether in the facts and circumstances of the case, the Tribunal is right in law in holding that an opportunity for curing a defect would carry meaning when the defect could have been cured on the day when the defect occurred? 2. Whether in the facts and circumstances of the case, the Tribunal is right in law in holding that a procedural defect could be cured ex-post facto only if it could have been cured on the day it occurred? 3. Whether the Tribunal was