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Facts of the Case:

  • In this case, the respondent was the assessee who received a notice under Section 24 (2) of the Bengal Agricultural Income-tax Act, 1944, he estimated an agricultural income of Rs. 335 as the response for the same. 
  • However, the Agricultural Income Tax Officer directed the office to notify the assessee that he has to appear with all the required documents and records as it was not a proper return, and for the same, he filed a petition to request for additional 15 days to file a fresh return and the same was signed in vernacular as “Sri Keshab Chandra Mandal x Ba: Sri Jugal Chandra Mandal”, the vakalatnama was also signed with the same and along with the appointment of Pleader as the assessee did not know to read and write and had put x mark wherever sign required and his son Sri Jugal Chandra Mandal attested I cross mark in the vakalatnama.
  • On the appointed date the assessee didn’t appear personally but his son did along with the pleader. There was only submission of return in which the name was not crossed and there was absence of letter of authority.
  • The Tax Officer stated in his assessment that a huge difference was there between the two returns. As the first return shows total agricultural income of Rs. 335 but the revised one showed an income of Rs. 1,077. Not only this but a variation could be found in the way signatures were made in both of the returns. The officer refused to make an assessment of the submitted income on the basis of this factor. He thereafter proceeded with the assessment and assessed Rs. 4,968 and few paisas as the income assessable for the calculation of return. 

Procedural History

The assessee after the assessment of the tax officer decided to go for an appeal to the Assistant Commissioner who gave the order of dismissal of the appeal and confirmed the assessment made under the Section 35 (4) (a)(i) of the Act in question.

The assessee further appealed before the Income-tax Appellate Tribunal who accepted the appeal on the ground that the revised return filed by the assessee was not wrong but a proper return and it should have been treated like an adequate return only.

Commissioner of Income-tax was disappointed by the decision of the tribunal and therefore he took the case forward as he applied for reference under section 63 (1) for the questions of law to the High Court. The Appellate Tribunal by the order referred the same to the High Court the issue of whether, in certain circumstances, “the declaration in the return signed by the illiterate assessee with his son’s pen should be considered as properly signed and a legitimate return.”

The reference came to the Bench of the Calcutta High Court like the tribunal answered the question laid in front of them in the affirmative. The High Court quoted the following observations of Blackburn J. in The Queen v. The Justices o/Kent[1]:

“No doubt at common law, where a person authorises another to sign for him, the signature of the person so signing is the signature of the person authorising it; nevertheless, there may be cases in which a statute may require personal signature.”

The High Court while stating their conclusion which they came by working around the common law rule “qui facit per alium facit per se” would matter in this situation, as it implies that if and only if the statute requires a the signature of said person, the requirement should be met by him but otherwise it can be met by a person signing through the hand of an agent. The High Court decided to adopt the said common law rule to prevent any ambiguity in the understanding of whether the assessee’s signature is necessary as an essential requirement and thus coming to the conclusion that nothing could be found in the Act or the questioned rules that required the individual assessee’s personal signature. Still unsatisfied the Commissioner for the applied certificate under Section 64 (2) of the Act for the final disposal.

Issues

The issue before the Supreme Court is to judge whether the stand taken by the High Court to the question of law is well-founded or not. The words “in the circumstances of this case” is the ground of the whole proceeding beginning of the question. The question that whether a return filed under Section 25 requires the assessee to sign the return personally and cannot ask or authorise someone else to do the same.

Party’s Arguments

The Counsel of the appellant contended that the Court should only give effect only to the plain meaning of the words in the statute and the rules in question. By paying attention to the plain reading of the intention of the legislature can be clearly indentified that the return of an individual assessee is needed to be signed by himself personally and not by someone else as his agent. 

Whereas the Counsel of Respondent pleaded that since the assessee was an uneducated and illiterate person exception should have been made for him. Not only this but if there was something wrong with the return a chance to the assessee should have been given, he should have been heard before making any decision.

Holding (Judgement + Rule of Law)

The Court did accept the appeal after giving consideration to all the facts and interpreting the law/ provisions in question for disposal and. The Court stated that it cannot be denied that there are situations where signature made by an agent under the name of the principal is considered permissible, and the writing of the name of the principal by the agent is regarded as the signature of the principal himself. But it can only be followed in cases where the law permits so. If even after the construction of a statute, the signature of an agent is not found to be an adequate substitute of signing under the name of the principal by the agent no matter if the principal may have given the authorization to the agent it cannot be regarded as the signature of the principal for the purposes of the said statute. 

The question that was referred to the High Court by the tribunal that whether in a case/ circumstance like this where the sign made by the son of the assessee under the name of assessee would be considered as the sign of assessee was answered in the negative. 

The rule of law that laid down the basis of the question of law for High Court was –Qui facit per alium facit per se is a Latin legal term that means, “He who acts through another does the act himself.” It is a fundamental legal maxim of the law of agency. It is a maxim often stated in discussing the liability of the employer for the act of employee in terms of vicarious liability.”

Rationale

According to the principles of interpretation, a provision derives its power and meaning from the corresponding words, meanings within the statute and principle the statute is based on.

The provision in question is very clear about the fact that the return needs to be signed by the assessee himself and no one else and various other rules so mentioned showed that if a provision needs to be interpreted in a different way, then different set of words would have been used. 

Dissent

Justice Mahajan was of the dissenting view and stated that since the question referred to the court was whether the return signed by the son of assessee as assessee/ his representative would be valid or not. In a situation like this, it must be assumed that there was contact and nothing is there to prove the fact otherwise. One cannot prove that the assessee did not touch the pen or the hand of the son when the signature was being affixed.

The act and rules in question lack a precise definition of the word “signature” which requires quite a specific meaning and coverage of the area in this situation. The General Clauses Act which acts as the saviour in the end also doesn’t hold an exhaustive meaning. In India it can be seen as a well-known practice that if the person who is executing the document an illiterate then he touches the pen and then asking someone else to sign in for him, in such situation the sign is considered to be made by the executant only and in cases like this no question about the agency arises. The situation was same in the present case and since no inquiry about who had made the signature, the same could not be ascertained. The question landed in High Court is out of their scope but still the conclusion given is the right one.

Since there is the absence of proof to the contrary one could be satisfied that the assessee had signed the return personally. The Income Tax Officer even after having doubts didn’t call the assessee to appear for clarification of facts about who did the sign and in what situation, the officer was hasty in his behaviour which led to the creation of a problem for the court. In various cases, it has been observed that the Income tax Officer is at the duty to satisfy himself about the authority before he accepts the return. He agreed with Justice Das that a certain degree of physical contact should be there between the person and in the way signature or the mark are put on the document, but the contrary couldn’t be proven in this case. People who are educationally deprived section and those who do not have the accurate knowledge of law or of income-tax for this particular case should be dealt with more sympathy and should not be penalized in such situations, a benefit of the doubt should be given to such party.

Comments

This case sets an example to the saying that everyone is the same in the eyes of laws. Though the judgment finally laid out might be wrong in the eyes of everyone but Judiciary dispensed the decision on the lines of what the intention of the legislature was. The tax officer was the one who was at fault in this case but since that wasn’t the question before the court the court didn’t try to interfere in that matter as the role of the justice system is to dispense quick and fair justice.


References:

[1]  AIR 1935 OUDH 305


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