Swatanter Kumar, J.

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 assessed 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 assessed

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 assessed 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 assessed 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) 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 assessed 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 assessed 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 assessed 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 v. Keshav Chandra : [1950]18ITR569(SC) was squarely applicable to the present case rather than the case of Jai Manohar Lal v. National Printing Supply : [1970]1SCR22 and Commissioner of Income Tax v. Calcutta Discount Company Ltd. : [1973]91ITR8(SC) .

6. The assessed 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 justified in law in holding that the appeal filed on 23.10.1981 before CIT (Appeals) signed by the professional representative of the assessed liable to be declared incompetent

7. The answer to the questions referred by the Tribunal, to this Court, which in fact, to great extent, are interdependent, revolves around the interpretation of the provisions of Rule 45, as it existed in the statute for the relevant year 1978-79. The same reads as under:-

45. [(1) An appeal to the Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals) shall be made in Form No. 35.]

(2) The form of appeal prescribed by sub-rule (1), the grounds of appeal and the form of verification appended thereto shall be signed-

(a) in the case of an individual, by the individual himself; where the individual is absent from India, by the individual concerned or by some person duly authorised by him in this behalf; and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf ;

(b) in the case of a Hindu undivided family, by the karta, and where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family;

(c) in the case of a company, by the managing director thereof, or where for any unavoidable reason such managing director is not able to sign and verify the return, or where there is no managing director, by any director thereof ;

(cc) in the case of a firm, by the managing partner thereof, or where for any unavoidable reason such managing partner is not to able to sign and verify the return, or where there is no managing partner as such, by any partner thereof, not being a minor

(d) in the case of a local authority, by the principal officer thereof; and

(e) in the case of any other association, by any member of the association or the principal officer thereof; and

(f) in the case of any other person, by that person or by some person competent to act on his behalf.

8. On the language of the above rule, it is contended on behalf of the respondents that if the memorandum of appeal is not signed, in the case where the firm is an assessed by the Managing Partner thereof, or by any partner not being a minor, the memorandum shall be liable to be rejected and it is an incurable defect in the appeal. On the other hand, the Counsel for the petitioner contended that this rule has to be given a liberal construction and stated that once the memorandum was signed by an authorised representative, it would be a valid presentation of the appeal and in any case, even if the same was held to be a defect, opportunity should have been granted by the Appellate Authority to rectify the defect.

9. It cannot be disputed that Rule 45 is a procedural rule and provides the form, in which the appeal is to be made and who is the competent person to sign the verification appended to the appeal. In the case of a firm it has to be signed by the Managing Partner and if the Managing Partner is not available to sign and verify the return, or where there is no Managing Partner, by any partner, of course with the exception of the partner being a minor. The appeal before the Commissioner of Appeals has to be filed in Form 35, Appendix II of the Income Tax Rules, 1962, as applicable at the relevant point of time. In accordance with the prescribed form, the appeal is to be signed by the appellant and the verification also is to be done by the same person. It can be noticed for the purposes of reference that the verification of the memorandum of appeal as prescribed in the form states the appellant do hereby declare that what is stated above is true to the best of knowledge and belief . This would indicate that the facts stated in the memorandum of appeal are to be correct as per the information and belief, obviously relatable to the records and not to the personal knowledge of the appellant. This would be of some significance, particularly while examining the matter in regard to the rule being absolutely mandatory in terms or being directory.

10. The rule has to be applied to the facts of a given case. However, it will be true in every case that the appeal is preferred by the assessed who has filed the return which has been subject matter of determination by the Assessing Officer and it is against the final order of assessment passed by the Assessing Officer that appeal is preferred. Thus the emphasise in the rule is obviously relatable to the knowledge and belief of the person who signs the memorandum of appeal under this rule. The rule of procedure are to further the cause of justice and an approach which would render the remedy ineffective should be avoided, unless it was so specifically or by necessary implication stated in the relevant provisions. The basic object of every procedural law is attainment of effective and efficacious disposal of cases in confirmity with the provisions of the statute. A hyper-technical interpretation or enforcement of the provisions, without even providing an opportunity to the effective party to comply with the spirit of the rule, may not be quite in adherence to the basic rule of law and interpretation.

11. There is no doubt that the provisions of Rule 45 do require a Managing Partner/Partner to sign and verify the appeal as per rules, but a memorandum of appeal which have been instituted by a duly authorised person who acts on behalf of the Managing partner/partner can also be taken as substantial compliance to the provisions of the rules. It may be useful to notice at this stage, that the Rule 45 was substituted by IT 5th Amendment Rules, 1989 w.e.f. 18th May, 1989 to collectively say that form of appeal prescribed by sub-rule (1) may be signed and verification appended thereto relating to the assessed be signed and verified by a person who is authorised to sign the return of income under Section 140 of the Income Tax Act, 1961, as applicable to the assessed.

12. The law relating to procedures is to be construed somewhat liberally so as to make it even effective retrospectively or retroactively. It is a settled principle of law that the procedures are presumed to be retrospective, unless a construction is textually inadmissible. It is a settled canon of interpretation of procedural law that normally its non-adherence does not result in illegality which would render the appeal incompetent, unless such non-compliance related to a substantive provision and has caused prejudice to the other party and may have the effect of taking away a settled right. Law relating to procedure may always not prove fatal to the proceedings initiated by the assessed and it would be in the interest of justice, fair and equitable to provide an opportunity to the assesee to rectify the irregularity committed in regard to compliance to the procedural rules. Unless, the non-compliance to the procedure is of such a nature that it necessarily creates a bar or takes away a substantive right vested in the other side, where the appeal is filed in accordance with the form but is only signed by an authorised representative and not by a specified person under Rule 45 of the Rules, thereupon the appellant should be granted an opportunity to correct this error rather than dismiss the appeal as not maintainable, particularly when the appeal is otherwise complete in all respects and has been filed within the prescribed period of limitation.

13. At this stage, it may be appropriate to refer to some provisions of other procedural laws mainly Code of Civil Procedure. There is an obligation upon the plaintiff to sign and verify the plaint by a duly authorised person in terms of Order 6 Rules 14 and 15 of the Code. In the event of such signing and verification is defective, either for want of authority or on such similar grounds, in that event, it would not be proper to reject a plaint under the provisions of Order 7 Rule 11 of the CPC, but an opportunity should be provided to the plaintiff to correct the defect so that substantive dispute between the parties can be decided. In this regard, reference can be made to the judgment of the Supreme Court in the case of United Bank of India v. Naresh Kumar and Anr. : (1996)6SCC660 . In that case, while referring to the law of practice and procedure, the objection taken was that plaint was not signed and verified in accordance with law by a duly authorised person. The suit was dismissed by the Courts below and the Supreme Court held as under :-

.....Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has adjust case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.

........If, for any reason whatsoever, the courts below were still unable to come to this conclusion, then either of the appellate courts ought to have exercised their jurisdiction under Order 41 Rule 27(1) (b) of the Code of Civil Procedure and should have directed a proper power of attorney to be produced or they could have ordered Shri L.K. Rohatgi or any other competent person to be examined as a witness in order to prove ratification or the authority of Sh.L.K. Rohatgi to sing the plaint. Such power should be exercised by a court in order to ensure that injustice is not done by rejection of a genuine claim.

14. Still in another case of Hanamanthappa and Anr v Chandrashekharappa and Ors. : [1997]1SCR846 , the Supreme court took the view that where a plaint was returned under order 7 Rule 10A and by making alterations in the plaint, the plaint was presented in another Court, while rejecting the contention that the plaint was materially altered without seeking permission of the Court and as such it ought to be rejected under Order 8 Rule 10 CPC, their Lordships of the Supreme Court held that it could be treated as a fresh plaint and matter proceeded in accordance with law.

15. Reference can also be made to a case under the Court Fees Act 7 of 1870 wherein it was held that even if the Court is of the opinion that plaintiff is liable to pay ad valorem Court Fee of a higher value, than affixed on the plaint, even then, demand of justice would be to grant an opportunity to the person to make deficiency good, rather than rejecting the plaint. In the case of Anil Rishi v. Gurbuksh Singh , it was held as under :-

Having come to this conclusion that the plaintiff respondent herein is liable to pay the ad valorem Court fee, the necessary corollary thereof is whether the plaintiff would be entitled to pay the requisite Court Fee or the plaint is liable to be rejected. It is a settled principle of law that wherever or whenever the Court comes to a conclusion that plaintiff is liable to pay Court Fee larger than the Court Fee, rather than rejecting the plaint right at the threshold for payment of inadequate Court Fee.

16. In a case where at the time of admission of the Second Appeal before the High Court, time was granted to the plaintiff to file certified copy as soon as it is available, but the same was filed within seven days after obtaining some time and the appeal was dismissed by the High Court under Order 41 Rule 1(2) of the Code of Civil Procedure, their Lordships of the Supreme Court in the case of Jogdhayan v. Babu Ram : [1983]1SCR844 directed that the provisions of Section 148 should have been invoked by the High Court and the appeal should not have been dismissed without going into the merit of the case.

17. Substantial compliance to the rules of procedure has normally been accepted by the Courts and consistent view appears to be that the doors of adjudication should not be shut on an applicant at the very threshold of the proceedings, unless there was violation of the substantive provision which resulted in settlement of right of parties. Procedural law is panacea for achieving the goal or object of fair adjudication. Applying this principle, the Supreme Court in the case of Ragu Thilak D. John v. S. Rayappan and Ors. AIR2001 SCW 342 while relying upon the judgments of the Supreme Court in L.J. Leach and Co. Ltd. v. Jardine Skinner and Co. : [1957]1SCR438 , Smt. Ganga Bai v. Vijay Kumar : [1974]3SCR882 , B.K.N. Pillai v. P. Pillai : AIR2000SC614 , held as under :

....But it is equally true that the Courts while deciding such prayers should not adopt hypertechnical approach. Liberal approach should be the general rule particularly in cases where the other side can be compensated with the costs. Technicalities of law should not be permitted to hamper the Courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation.

18. The above enunciated principles of law clearly indicate that non-adherence of some part of the Rule 45 per se may not be a ground for rejecting the memorandum of appeal and it will be more appropriate for the authorities concerned to grant an opportunity to the assessed to remove the defect, if any, provided the appeal was in substantial compliance to the provisions of Rule 45 and was filed within the period of limitation.

19. In the present case, there is no dispute before us that the memorandum of appeal was filed within the period of limitation and was also signed by a duly authorised representative i.e. the Chartered Accountant who had been pursuing the matter on behalf of the assessed and had filed his authority before the Assessing Officer. The Commissioner of Income Tax (Appeal) was in continuation of the earlier proceedings as it was an appeal against an order of assessment where the said authorised representative was fully competent to represent the case of the assessed and bind the assessed by his acts and deeds. The order of assessment was made on 25th September, 1981, appeal was filed on 23rd October, 1981 duly signed by the authorised representative which in turn was dismissed on 26th October, 1981. We may only notice here for the purposes of proper appreciation of facts and the law applicable thereto that the assessed had also filed another appeal which was again dismissed by the Commissioner Income Tax Appeals) as well as by the Tribunal on 2nd April,1983 on the ground of limitation and that the earlier order of the Assessing Officer had merged in the order of Commissioner of Income Tax. This order itself is subjudice before us in ITR 480/83. In support of the contention that such a defect, if at all, should be permitted to be rectified, counsel for the petitioner has rightly relied upon the judgment of the Orissa High Court, in the case of Addl. Commissioner of Income Tax, Orissa v. K. Padmalochn Sahu : [1974]95ITR113(Orissa) where after a detailed discussion relating to a matter that memorandum of appeal was not signed by a Karta or a member of HUF and the appeal should or should not have been rejected, the Court held as under :-

The difference between the appellate Assistant Commissioner of Income Tax and the Tribunal lies within a narrow campus purely in the matter of exercise of discretion. The first appellate authority gave one chance for rectification, and on the failure thereof the appeal was dismissed. The Tribunal, however, was of the opinion that a further opportunity should be given for rectification as on the second occasion the assessed committed another mistake by not getting the memorandum of appeal singed by the karta, but by his son. This being a matter of discretion, the Appellate Tribunal is to exercise it as it thinks proper as the last court of fact. Strictly speaking, the question referred to us should not have been referred. As, however, the quest on has already been referred we answer it by saying that the first part would be answered in the negative and the second part by saying that the defect was an illegality, but such defect should be allowed to be rectified by giving proper opportunity to the assessed.

20. Still in another case titled as Sheonath Singh v. Commissioner of Income Tax, West Bengal : [1958]33ITR591(Cal) , the Calcutta High Court in somewhat similar circumstances held as under :-

(iii) the absence of or defect in the signature of the appellant in the memorandum of appeal was not an illegality or fatal but only an irregularity which could be rectified by amendment, the amendment taking effect from the date when the document had originally been filed. The memorandum as originally filed were not nullities and the Tribunal had power to accept them in the condition in which they found them at the time they were hearing the appeal provided they were satisfied that the assessed had in fact intended the appeal to be placed before them and had done so through the authorised representative although he had not himself signed the memorandum. The Tribunal was, Therefore, wrong in holding that the absence of the signature of the appellant at the proper places in the memorandum of appeal was a material defect which prevented them from accepting the document as good and that although the defects had subsequently been removed the period of limitation having meanwhile expired the removal was of no assistance to the assessed.

21. Learned counsel appearing for the respondent relied upon a judgment of this Court in the case of Commissioner of Income Tax : [1998]232ITR381(Delhi) and also in Mela Ram And Sons v. Commissioner of Income Tax, Punjab : [1956]29ITR607(SC) to contend that doctrine of merger would be applicable to ITR 480/83 and as such the present reference should also be dismissed. We find no merit in this contention in as much as ITR 465/83 which is the order first in point of time and has to be decided on its merit or de-merit. Firstly, the doctrine of merger as explained in the said judgment would hardly be applicable to the present case, even on facts. We may notice here that in that very judgment of CIT v. Euracia Publishing House (P) Ltd., the Court even clearly stated the principle that the mistake which is patent and obvious can be corrected and doctrine of merger does not apply where appeal is dismissed on ground of default, limitation or such defect. As such the respondents can hardly get any benefit of the judgment relied upon by them.

22. The expression illegal has been defined as being contrary to law and is normally applicable to everything which is an offence or which is prohibited by law. This word has an extensive meaning including anything and everything which is prohibited by law which constitutes an offence and which furnishes the basis for a civil suit. Giving it a wider meaning, the expression has been equated as unlawful (Reference can be made to judgment in AIR 1930 Pat 593 [LQ/PatHC/1929/298] ), but it may still not be void. This expression is discernly distinguishable from the expression irregularity and irregularity is defined as a want of adherence to some prescribed rule or mode of proceedings and primarily consists of omitting to do what is necessary for due and orderly conduct of the proceedings. The word illegality on the other hand is properly predictable of radical defects only and signifies what is contrary to the principle of law, as defined from the mere rule of procedure. It denotes a complete defect in jurisdiction or proceedings. For instance, denial of principles of natural justice would render the proceedings illegal while the memorandum of appeal not being signed by the prescribed person under rules would be an irregularity . Irregularity is an expression of lesser effect as an act which is improper or inefficient by reason, or departure from the prescribed. It primarily connotes the neglect of order or method and may not be according to regulations (Reference can be made to The Law Lexicon by P. Ramanatha Aiyar, 1997 Edition).

23. In the case of Martin Burn Ltd. v. Calcutta Corporation, : [1966]1SCR543 , the Supreme Court held that irregularity covers any case, thing that has not been done in the manner laid down by the statute, and thus, this word does not cover a case of procedural irregularity only. One of the basic distinction between the two expressions is the resultant effect of its being curable or uncurable. Normally, the illegality which goes to the very root of the matter or jurisdiction could hardly fall in the class of those cases, but an irregularity which is merely procedural and it has even been substantially complied with, than to bring such a case within the class of cases where irregularity is curable, would be a fair most interpretation of the relevant rule.

24. From the above discussion of law, particularly, keeping in view the facts and circumstances of the present case, we have no hesitation in answering the questions referred to, by stating that the irregularity committed by the assessed was curable and could be rectified on the date of its filing and even subsequent thereto, as appeal admittedly was filed within the period of limitation.

25. In view of our above discussion, ITR 465/83 is answered in the above terms and consequently, we set aside the order passed by the Income Tax Appellate Tribunal dated 19th July, 1982 as well as the order passed by the Commissioner, Income Tax dated 26.10.1981. The appeal filed by the assessed is restored for hearing to the CIT (Appeals) who shall proceed with the matter in accordance with law. The inevitable result of our above direction is that the orders passed by the Income Tax Appellate Tribunal as well as the Commissioner Income Tax (Appeals) in above ITRs are liable to be set aside and we hereby remand the matter to the Commissioner Income Tax (Appeals). Parties to bear their own costs.

Parties are directed to appear before the Commissioner Income Tax (Appeals) on 4/4/2005 at 11. a.m.