1986 (7) TMI 158 - AT - Income Tax

Issues Involved:
1. Competency of the authority to make the reference application.
2. Use of the incorrect form for the reference application.
3. Timeliness and procedural compliance in filing the reference application.

Detailed Analysis:

Issue 1: Competency of the Authority to Make the Reference Application
The primary objection raised by the assessee's counsel was that the reference application was made by the Commissioner of Income-tax instead of the Commissioner of Gift-tax, who had no locus standi in the matter. The Tribunal noted that the Commissioner of Income-tax and the Commissioner of Gift-tax were the same person, Shri Balwant Singh, and that he had signed the application in his capacity as the Commissioner of Gift-tax. The Tribunal found this to be a case of misdescription rather than a lack of jurisdiction. The Tribunal cited the Punjab High Court decision in Gian Chand Vir Bhan v. CIT [1960] 39 ITR 414, which held that misdescription by a competent person does not invalidate the application. Therefore, the Tribunal rejected the preliminary objection regarding the competency of the authority.

Issue 2: Use of the Incorrect Form for the Reference Application
The assessee's counsel argued that the reference application was filed using Form No. 37, which is prescribed under the Income-tax Rules, instead of Form No. 1, which is required under the Gift-tax Rules. The Tribunal acknowledged this procedural defect but noted that the application was signed by the Commissioner of Gift-tax and contained the relevant facts pertaining to gift-tax matters. The Tribunal referred to Behari Lal Laxminarain v. ITO [1960] 39 ITR 649 (All.), which allowed rectification of procedural defects without dismissing the application. The Tribunal directed the revenue to file a proper application in the correct form within 15 days, thus allowing for rectification of the error.

Issue 3: Timeliness and Procedural Compliance in Filing the Reference Application
The assessee's counsel also objected to the late submission of written submissions by the senior departmental representative and the absence of a revised reference application by the date of the hearing. The Tribunal found that these procedural lapses were not sufficient to reject the application outright. The Tribunal cited Addl. CIT v. K. Padmalochan Sahu [1974] 95 ITR 113 (Orissa), which held that procedural defects could be rectified, and the application should not be dismissed solely on these grounds. The Tribunal granted the revenue 15 days to file a revised application in the correct form and with the correct heading.

Conclusion:
The Tribunal dismissed the preliminary objections raised by the assessee and directed the revenue to file a revised reference application within 15 days. The Tribunal emphasized the importance of fairness and the opportunity to rectify procedural errors, citing multiple judicial precedents to support its decision. The case will be heard on its merits once the revised application is received.

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