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TMI Blog1997 (12) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... a prayer to the Bench that on the specific questions raised with regard to the basis of apportionment of the claim and whether opportunity was afforded to the assessee or not, the officer who made the assessment, Mr. Arvind Modi, be allowed to address arguments before the Bench. The prayer was opposed by Mr. Dinesh Vyas, learned counsel for the assessee. After a brief debate, it was agreed by both sides that Mr. Modi would only assist Mr. Tralshawala but would not address any arguments before the Bench. 2. While so, an application dated 27-8-1997 was filed by Mr. Tralshawala, which reads as under : "No. Sr. AR/ITAT 'A' Bench/97-98 Office of the Sr. Authorised Representative, ITAT 'A' Bench, Mumbai 27th August, 1997 Sub : Representation before the Hon'ble ITAT, 'A' Bench, Mumbai in the case of M/s Tata Chemicals Ltd., A.Y. 1992-93 ITA Nos. 4604/B/96 and 4442/B/96 In accordance with Rule 2(ii)(b) of the Income-tax (Appellate Tribunal) Rules 1963, I hereby appoint Shri Arbind Modi, Dy. Commissioner of Income-tax, to act on my behalf or along with me during the hearing in the above case before the Hon'ble ITAT, 'A' Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at. New Delhi) and V.V. Trans-Investments (P.) Ltd. v. CIT (1994) 207 ITR 508/ 74 Taxman 79(AP) at 515 and 521 in this regard. He pointed out that no prejudice would be caused to the other side if Mr. Modi is permitted to appear and argue the points and in this behalf, viz., the question of prejudice being caused, cited the Bombay High Court judgment in Lakhanpal National Ltd. v. Union of India (1993) 63 ELT 61. He argued that just as complex issues in Courts may necessitate engaging counsel, the Department was free to engage the services of Mr. Modi to effectively put forth its case if it so thought. He drew our attention to Harishankar Rustogi v. Girdhari Sharma AIR 1978 SC 1019, for the purpose of showing that the Supreme Court has allowed a private person, other than an advocate and a friend of the appellant in whom he had confidence, to appear and argue the case of the appellant and had laid down guidelines in this behalf. 7. Turning to Rule 2(ii)(b) of the Appellate Tribunal Rules, Mr. Deodhar submitted that the words "act" and its grammatical variation "acting" appearing therein mean "to address the court" and at any rate, after the abolition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He pointed out the distinction between senior counsel and solicitors; the former cannot act but can only plead whereas the latter can only act, but cannot plead. Our attention in this behalf was invited to the Bombay High Court (Nagpur Bench) decision in L.M. Mahurkar v. STO 66 ITR 561, wherein the distinction between the meanings of the words "act", "plead" and "appear" has been brought out. Mr. Vyas submitted that "to act" means to carry out the procedural aspects of a litigation (such as filing appeals, papers and documents, complying with defect memos, etc.) which bring the litigation before the court in proper form. In support of his contention that the meaning of the word "act" does not take in arguing the case or pleading or addressing the Court, Mr. Vyas relied on the following judgments : (i) Aswin Shambuprasad Patel (1954) 57 BLR 209; (ii) Aswini Kumar Ghose v. Arabinda Bose AIR 1952 SC 369. Besides these authorities, he also drew our attention to certain observations in Sanjeev Row's book on Advocacy, Chapter I of Part 6 of Bar Council of India Rules, Order IV, Rule 2(b) of Supreme Court Rules, etc. He pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is so and since Mr. Arvind Modi has not been so appointed, he cannot be considered an authorised representative so that he can address arguments before the Tribunal. He submitted that the consequence of not appointing him by notification in the gazette is that the appointment is null and void and in support of this contention relied on : (i)All India Reporter v. Competent Authority, IAC (1986) 162 ITR 697(Bom.); (ii)Manu Bharati Co-operative Housing Society v. CIT (1986) 162 ITR 693 / 33 Taxman 411(Bom.) ; and (iii)Satya Narain Prakash Punj v. Union of India (1986) 160 ITR 693(Delhi). Mr. Vyas also drew our attention to the following judgments in support of his contention that the issue of a notification in the gazette as required by the rule is not a mere formality but is a mandatory requirement and the failure to fulfil the same resulted in there being no valid appointment at all of the incumbent : (i)Joint Chief Controller of Imports & Exports v. Aminchand Mutha AIR 1966 SC 478 at 479 para 13; and (ii)E.P. Royappa v. State of Tamil Nadu AIR 1974 SC 555. Mr. Vyas sought to distinguish the authorities cited by Mr. Deodhar on the ground that in none of them was the appointm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Rules. It is not a notification issued by the Government of India nor is it gazetted. We therefore hold that Mr. Arvind Modi cannot make oral submissions before us on the basis of the purported appointment letter dated 1-9-1997takes us to the question whether Mr. Modi can be heard by us on the basis of the letter dated 27-8-1997 of Mr. Tralshawala, appointing the former "to act" on his behalf or along with him. Rule 2(ii)(b) of the Appellate Tribunal Rules, 1963 on which things the answer to the question, is as below : "2(ii) 'authorised representative' means (a) … (b)in relation to an income-tax authority who is a party to any proceeding before the Tribunal, a person duly appointed by the Central Government by notification in the Official Gazette as authorised representative to appear, plead and act for such authority in any such proceeding and any other person acting on behalf of the person so appointed;" 17. The rule is in two parts. In the first part, it defines an authorised representative of the income-tax department before the Tribunal as one who has been so appointed by a notification issued by the Government of India and duly gaz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properly laid before the Court. It was held that presentation of a plaint, memorandum of appeal or an application for execution are all acts which fall in this category. A Division Bench, consisting of Hon'ble Justice Rutledge J and Carr J, of the Rangoon High Court, in "Filing Powers, by an advocate or Pleader, In re of" AIR 1926 Rangoon 215, referred to the reports of the Bar Committee which suggested amendments to the CPC in 1926, wherein the Committee made the following remarks : "We therefore propose that all practitioners shall be required to file Vakalatnama, when they act, but that 'when they merely appear and plead they shall be allowed the option of filing a memorandum of appearance... We would not however, apply this rule but would maintain the existing practice in the case of an advocate who under the rules in force can only appear on the original side of the Calcutta, Bombay and Madras High Courts on the instructions of an attorney." [Emphasis supplied] In Aswini Kumar Bose's case (supra), Hon'ble Chief Justice Patanjali Sastri, speaking for the Court, traced the history of the legal profession in India and the functions, rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appear" and "to act", His Lordship held : "The words 'to appear', in my opinion, mean 'to be present in court and to represent the client in the various stages of the litigation where the presence of the client in court by himself or his representation is necessary'. The words 'to act in court' mean 'to take on behalf of the client in court, or in the office of the court necessary steps in the course of the litigation so that his case may be properly laid before the court. The words 'to appear', in my opinion, mean 'to have audience before the court'." In Aswin Shambuprasad Patel v. National Rayon Corpn. Ltd. AIR 1955 Bom. 262, Hon'ble Chief Justice Chagla, contrasted the meaning of the word "pleading" with the words "appearance, application or act in or to any Court" appearing in Order 3, Rule 1 of the CPC and held : "The contention put forward by Mr. Bengeri before me is that 'pleading' is included in the expression 'appearance', application or act in or to any Court. In my opinion it is clear that 'pleading' word not be included in any of these expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted to appear or act, but he cannot be permitted to plead the cause before the court of law, because pleading is an aspect which falls in the realm of practising the profession of law. In Thayarammal v. Kuppuswami Naidu AIR 1937 Mad. 937, a Full Bench of the Madras High Court, presided by Hon'ble Chief Justice Beasley held that though the general power to attorney was authorised to do several things including "appearing" and "pleading", he could not claim the right to plead. His Lordship further held that the word "appear" would not take in the right to plead and that it would take in only the power to take "proceedings to submit oneself to jurisdiction". Referring to this decision in Hari Om Rajinder Kumar v. Chief Rationing Officer of Civil Supplies AIR 1990 AP 340, it was held that the right to appear in Court and plead has to be distinguished from the other acts which a power of attorney can perform. In Joyti Prokash Mitter v. H.K. Bose AIR 1963 Cal. 178, it was held that the expression "plead" means to address the Court on behalf of either party. This decision was rendered in the context of Article 220(1) of the Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be accepted. The preamble to the Appellate Tribunal Rules says that they have been framed "to regulate the procedure of the Appellate Tribunal and the procedure of the Benches of the Tribunal". The Rules form a complete code so far as the Tribunal's procedure is concerned. The procedure to be followed relates to a dispute between the taxpayer and the Revenue in which both are entitled to an opportunity of being heard. The manner in which they are to be heard must conform to certain norms and principles. It is in this spirit that the rules have been framed. The principles or norms, in turn, have to be based on certain accepted procedure, which necessarily involves the acceptance of what is generally understood as proper procedure in the legal system and usage. This necessitated the incorporation of certain words which have been under- stood in the legal system in a particular sense for long, so that there is no confusion in the minds of the parties to the dispute regarding the sense in which those words were used. The appellate Tribunal Rules in many ways adheres to the language used in the CPC, which is the parent legislation in the country with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that in the CPC the word "act" was used in a technical sense, whereas in section 80 of the Trade Marks Act, the word was not so used, and therefore may be construed widely to cover the act of pleading also. In the context and setting of the word "acting" in R.2(ii)(b) of the Appellate Tribunal Rules, the reliance of Mr. Deodhar on the decision is inapposite. Thirdly, and this is more important, the interpretation suggested by Mr. Deodhar would result in this consequence, viz., that it would be sufficient for the Government of India to appoint just one person as authorised representative by a Gazette notification and that person in turn would appoint as many authorised representatives as he can to discharge the function of appearing and addressing arguments on behalf of the Department before the Tribunal. Such a disastrous consequence cannot be countenanced even for a moment. It must be remembered that the authorised representative of the income-tax department has a very important and crucial role to play before the Tribunal. The Tribunal has been constituted as the ultimate fact-finding body and it requires Officers of ability and assiduity to assist the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onduct the prosecution, and the pleader so instructed shall act therein under the directions of the P.P. or the A.P.P. It will be noticed from para 5 of this judgment that here also the word "act" has not been used in its technical sense in contradistinction to the words "appear" and "plead". The court therefore came to the conclusion that in the context the word includes the power to address the court. Mr. Deodhar also cited certain other decisions to which we have referred in the earlier part of our order. In all these cases what has been laid down is that interests of justice should be the criterion while permitting any party to argue for another person but in none of these cases was the authority of the person seeking to address the court was an issue. We may briefly notice the distinction. In Nulon India Ltd. CEGAT allowed an Advocate to address arguments. This advocate did not appear earlier where some other advocate had appeared. The authority of the advocate who appeared on the subsequent occasion was never in question. There was a dispute as to whether any fees was due to the earlier advocate but the CEGAT refused to be drawn into this controv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us is not that, but it is whether Mr. Modi is at all entitled to address arguments. The decisions cited by Mr. Deodhar are therefore not of any assistance to the position which he seeks to defend. 24. There was a debate at the Bar as to whether the requirement that the appointment of an authorised representative should be by a government notification which should be gazetted, was a mandatory requirement, the failure to fulfil which would render the appointment null and void, or whether it was only a directory requirement, the failure to fulfil which would merely result in a curable irregularity. The point arose because Mr. Vyas at one stage of this arguments pointed out that he was challenging the appointment of Mr. Modi by Mr. Tralshawala also on the more fundamental ground that the appointment of Mr. Tralshawala itself was not made through the issue of a Government notification, duly gazetted and therefore he could not appoint Mr. Modi even "to act". Since this contention went to the very root of the validity of the appointment of even Mr. Tralshawala as authorised representative and since we have been hearing Mr. Tralshawala with regard to the various grounds in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr. Name of the Officer From To Vice S/Shri S/Shri 1. B.S. Verma Audit (Cent.) Range 14 S. Rajguru 2. S.M. Misra DC (OSD) Range 6 Mrs. Maya Sinha 3. Desh Raj DC (OSD) Range 7 Kalyan Chand - Promoted 4. Girish Chandorkar DC (OSC) Range 18 Dalip Singh - Promoted 5. Anup Agarwal DC (OSD) Range 19 A.R. Malhotra - Promoted 6. S.M. Ashraf DC (OSD) Range 20 Mrs. P.M. Vasan - Promoted 7. L.N. Pant DC (OSD) Range 25 Mrs. N. Mansukhani - Promoted 8. Balvir Singh DC (OSD) Audit-I Debabrata Das - Promoted 9. B.N. Verma DC (OSD) Audit-II R.K. Singh - Promoted 10. V.K. Bakshi Sett. Comm. Audit (Cent.) B.S. Verma 11. Nathan Raul Audit-XIII Audit-IV P.P. Srivastava - Promoted 12. L.D. Bharati Audit-X Audit-V Mrs. Rama Das - Promoted 13. Mrs. B.A. Verma Audit-XII Audit-VII S.P. Pandey - Promoted 14. G.C. Negi App. Authority Audit-III Kamlesh Argal - Promoted 15. K.R. Chhawal DC (OSD) Audit-X L.D. Bharati 16. Prakash Chandra DC (OSD) Sett. Comm. H.C. Sakharwal - Promoted 17. Mrs. Seema K. Patra DC (OSD) Sett. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-III D. Jurisdiction of Chief Commissioners Annexure-IV E. Allocation of powers and functions of Chief Commissioner (Admn.) and Chief Commissioner (Technical) at Bombay, Calcutta, Delhi. Annexure-V F. Jurisdiction of Directors Generals (Inv.) North and South Annexure-VI G. Powers and Functions of Directors Generals (Inv.) Annexure-VII 2. This supersedes all existing instructions on the subject. Sd/ (M.M. Das) Encl : As above Inspecting Assistant Commissioner of Income-tax (H. Qrs.), Bombay." Mr. Deodhar drew our attention to page 2 of Annexure I (General Administration) to the above communication under the heads "Postings and Transfers". He particularly drew our attention to paragraphs (e) and (f)(i) of Annexure I, which are as under : "(e)The Board would place the Assistant Commissioners at the disposal of the Chief Commissioner for deployment in his Region. The Chief Commissioner would be competent to transfer and post any Officer as IAC, AAC, IAC (Asstt.), Senior A.R., IAC (Audit), IAC (Recovery), IAC (Vigilance), DD (Competent Authority) or any other equivalent post in the cadre of Assistant Commissioners. (f)(i)The Chief Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the President of India nor have they been authenticated in the manner required by Article 77(2). We may also refer to Article 53(1) of the Constitution which says that the executive power of the Union of India shall be vested in the President of India and shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution. Article 77(3) enables the powers to be exercised by Ministers or officials subordinate to them. The orders produced before us by Mr. Deodhar do not satisfy any of these requirements. These orders merely explain the powers, functions and jurisdiction of the Chief Commissioners of Income-tax/Director-General (Investigation). Clauses (e) and (f)(i) of Annexure I to the Communication dated 29-10-1987 merely confer the power of transfer and posting of the senior authorised representative upon the Chief Commissioner. The order dated 15-9-1997 is an order passed by the Chief Commissioner of Income-tax, Mumbai, containing transfer and postings of certain officials in accordance with Annexure I to the communication dated 29-10-1987. The source of all such orders appears to be an order of the Chairman, CBDT, dated 23-10-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statute and all its conditions". The right to appear, plead and act comes into being only if the "authorised representative" is appointed strictly in terms of the rule. It must further be kept in mind that rule 2(ii)(b) defines an "authorised representative" by using the restrictive expression "means" which discharges the "narrowing function" of the definition. It signifies that only such person can be an authorised representative who has been appointed in the manner provided in the rule and none else. We therefore hold that the condition that the appointment should be made by a notification of the Government of India is mandatory and cannot be relaxed. As in the present case, there is no such notification, the consequence would be that Mr. Tralshawala's appointment as "authorised representative" is invalid, and the further consequence would be that he cannot validly appoint Mr. Modi "to act" for him. 28. Arguments were advanced by both sides on the question whether the requirement that the notification should be gazetted is a mandatory requirement or is merely directory. Several authorities were also cited b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it would be prejudiced. 30. We may however in passing observe that we are not impressed by the preliminary objection raised by Mr. Vyas that since the parties had agreed that Mr. Modi would assist Mr. Tralshawala but not address arguments himself, the letters on the basis of which the right of Mr. Modi to address arguments is claimed should not be entertained at all. It is no doubt true that such a working arrangement was agreed to generally but if subsequently the income-tax department thinks fit to claim the right of Mr. Modi to address arguments before the Tribunal on the basis of the rules framed by the Appellate Tribunal, we think it would be unfair or unreasonable to throw out the applications at the threshold itself. The right having been claimed, it would be incumbent on our part to examine the merits of the applications in the light of the relevant rules and the legal position. The preliminary objection of Mr. Vyas is therefore overruled. 31. We again wish to clarify that the validity of the appointment of Mr. Tralshawala as authorised representative is not in issue before us directly and the point arose only indirectly in view of the contention taken by Mr. Vyas vis-a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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