# RAVULA SUBBA RAO AND ANOTHER v. THE COMMISSIONER OF INCOME-TAX, MADRAS

- **Citation:** [1956] 1 S.C.R. 577
- **Court:** Supreme Court of India
- **Decided:** 1956
- **Case number:** Nos. 56 & 57 of1954
- **Bench:** S. R. Das C.J, Bhagwati, Venkatarama Ayyar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ravula-subba-rao-and-another-v-the-commissioner-of-income-tax-madras-1247
- **Pages:** 15

## Headnote

Indian Income Tax Act, 1922 (Act XI of 1922), ss. 26-A; 69,
Rules 2 and 6 framed under s. 69-Word 'personally' in theRulesWhether excludes a duly authorised agent from signing an application
on behalf of the partner. under s. 26·A-Rules 2 and 6-Whether
ultra. vires the rule-making authority-Indian Income Tax Act, 1922
-Whether exhaustive of the matters dealt with therein.
Rules 2 a.nd 6 of the Rules fro.med under s. 59 of the Indian
Income Ta.x Act provide tha.t a.n a.pplica.tion for registration of a.
firm under s. 26-A of the Act a.nd for renewal of registration certifi·
ca.be "shall be signed persona.Hy by a.ll the parties".
Held that the word 'personally' in the Income Ta.x Rules, as
framed under s. 59 of the Income Tax Act would exclude a duly
authorised agent of a partner of a firm signing an application on
behalf of the partner under s. 26-A of the Income Tax Act.
(2) That Rules 2 and 6 a.re not· ultra vires the rule-making
authority.
To decide the question whether on its true interpretation the
Indian Income Tax Act intended tha.t an application under s. 26-A
should be signed by the partner personally, or whether it could be
signed by his a.gent on his behalf t)le Court must have regard not
-
only to the language of s. 96· A but also to the character of the
legislation, the scheme of the Act and the nature of j;he right con·
ferred by the section.
·
The Indian Income Tax Act is a self-contained code exhaustive
of the matters dealt with therein, and its provisions show an inten·
tion to depart from the common rule,' qui facit per alium facit per
88.
Its intention again is that a firm should be given benefit of
s. 23(5)(a), only if it is registered under s. 26-A in accordance
with the conditions laid down in that section and the rules
framed thereunder. And as those rules require the application to
be signed by the partner in person, the signature by an agent
on his behalf is in valid.
Commissioner of Agricultural Income-tax v. Kesha-b Chandra
Mandal, ([1950] S.C.R 435), relied upon.
Commissioner of Income-tax v. Subba Rao, ([1947) I.L.R.
Mad. 167) approved.
Other case-law referred to.
76
1956
May9
1956
Ravula Subba Rao
and another
v.
The Comtnissiontf'
of Income.tax,
-
Madras
578
SUPREME COURT REPORTS
[1956)

## Text

S.C.R.
SUPREME COURT REPORTS
RAVULA SUBBA RAO AND ANOTHER
v.
THE COMMISSIONER OF INCOME-TAX,
MADRAS.
577
[S. R. DAS C.J., BHAGWATI and VENKATARAMA
AYYAR JJ.)
Indian Income Tax Act, 1922 (Act XI of 1922), ss. 26-A; 69,
Rules 2 and 6 framed under s. 69-Word 'personally' in theRulesWhether excludes a duly authorised agent from signing an application
on behalf of the partner. under s. 26·A-Rules 2 and 6-Whether
ultra. vires the rule-making authority-Indian Income Tax Act, 1922
-Whether exhaustive of the matters dealt with therein.
Rules 2 a.nd 6 of the Rules fro.med under s. 59 of the Indian
Income Ta.x Act provide tha.t a.n a.pplica.tion for registration of a.
firm under s. 26-A of the Act a.nd for renewal of registration certifi·
ca.be "shall be signed persona.Hy by a.ll the parties".
Held that the word 'personally' in the Income Ta.x Rules, as
framed under s. 59 of the Income Tax Act would exclude a duly
authorised agent of a partner of a firm signing an application on
behalf of the partner under s. 26-A of the Income Tax Act.
(2) That Rules 2 and 6 a.re not· ultra vires the rule-making
authority.
To decide the question whether on its true interpretation the
Indian Income Tax Act intended tha.t an application under s. 26-A
should be signed by the partner personally, or whether it could be
signed by his a.gent on his behalf t)le Court must have regard not
-
only to the language of s. 96· A but also to the character of the
legislation, the scheme of the Act and the nature of j;he right con·
ferred by the section.
·
The Indian Income Tax Act is a self-contained code exhaustive
of the matters dealt with therein, and its provisions show an inten·
tion to depart from the common rule,' qui facit per alium facit per
88.
Its intention again is that a firm should be given benefit of
s. 23(5)(a), only if it is registered under s. 26-A in accordance
with the conditions laid down in that section and the rules
framed thereunder. And as those rules require the application to
be signed by the partner in person, the signature by an agent
on his behalf is in valid.
Commissioner of Agricultural Income-tax v. Kesha-b Chandra
Mandal, ([1950] S.C.R 435), relied upon.
Commissioner of Income-tax v. Subba Rao, ([1947) I.L.R.
Mad. 167) approved.
Other case-law referred to.
76
1956
May9
1956
Ravula Subba Rao
and another
v.
The Comtnissiontf'
of Income.tax,
-
Madras
578
SUPREME COURT REPORTS
[1956)
CIVIL APPELLATE JURISDICTION:
Nos. 56 & 57 of1954.
Civil Appeals
Appeal from tho judgment and order dated the
25th day of March 1951 of the Madras High Court in
Case Referred Nos. 32 of 1948 and 31 of 1950.
K. S. Krishnaswami Iyengar, (K. R. Ohoudhry,
with him) for the appellants.
G, N. Joshi and P. -G. Gokhale, for the respondent.
1956. May 9.
The Judgment of the Court was
delivered by
VENKATARAMA AYYAR J.-The appellant is a firm
which was Qonstituted under a deed of partnership
dated 10-2-1941, and consists of two partners, Subba
Rao and Hariprasada Rao. On 21-3-1942 it was
registered under section 26-A of the Indian IncomeTax Act No. XI of 1922, hereinafter referred to as
the Act, for the assessment year 1942. Sometime
thereafter, one of the partners, Subba Rao, is stated
to have left on a long pilgrimage, and the affairs of
the partnership were then managed by Hariprasada
Rao as his agent under a general power-of-attorney
dated 1-7-1940. Hariprasada Rao then applied under
rules 2 and 6 of the rules framed under section 59 of
the Act, for renewal of the registration certificate for
the year 1942-43, and the application was signed by
him for himself and again as the attorney of Subba
Rao. Those rules provide that an application for
registration of a firm under section 26-A and for
renewal of registration certificate "shall be signed
personally by all the partners". The Income-tax
Officer rejected the application for renewal on the
ground that it was not personally signed by one of
the partners, Subba Rao, and that the signature of
Hariprasada Rao as his agent was not valid.
The
order was taken in appeal, and was ultimately the
subject of a reference under section 66(1) of the Act
to the High Court of Madras, which held that the
word "personally" in rule 6 required that the partner
-
-
-
•
S.C.R.
SUPREME COURT REPORTS
579
should himself sign the application, and that the
7956
principles of agency under the general law were Ra'Vula Subba Rao
excluded. (Vide Commissioner of Income-tax v. Subba
and another
Rao(1)).
v.
While these proceedings were pending, Hariprasada The Commissioner
Rao filed the two applications, out of which the
0/ Income-tax,
1
•
~
l f th
• t
t'
Madras
present appea s arise, 1or renewa o
e reg1s ra 10n
certificate for the assessment years 1943-44 and
Venkatarama
1944-45. Both of them were signed by him for himAyyarJ.
self and as attorney for Subba Rao. At the hearing
of these petitions the appellant, apart from maintaining that rules 2 and 6 did not, on their true construction, exclude signature by an agent on behalf of a
partner, raised a further contention that the rules
themselves were ultra vires the powers of the rulemaking authority. The Income-tax Officer overruled
both these contentions, and rejected the applications,
and his order11 were confirmed on appeal by the
Appellate Assistant 0ommissioner and then by the
Appellate Tribunal. Thereafter, on the application
of the appellant, the Tribunal referred the following
questions for the decision of the High Court:
"(1) Whether the word 'personally' in the Income-tax Rules, as framed under section 59 of the
Income-tax Act would exclude a duly authorised
agent of a partner from signing an application on
behalf of the partner under section 26-A of the Income-tax Act?
(2) If the answer to the above question is in the
affirmative, whether rules 2 and 6 a.re ultra vires the
rule ma.king authority?"
The reference was heard by Sa.tyana.ra.yana Rao and
Viswanatha Sastry, JJ. Following the decision in
Commissioner of Income-tax v. Subba. Rao(1), they
answered the first question in the affirmative. On the
second question, however, they differed. Satyanarayana Rao, J. held that the rules were ultra vires,
and that the applications were in order, and ought
to have been granted. Viswanatha Sastry, J. was of·
the contrary opinion, and held that the rules were
intra vires, and that the applications were properly
(1) I.L R. [1947] Mad. 167: 1946 I.T.R. l!Sll.
1P56
Ravula Subba Rao
and another
v.
The Commissioner
cf lncome·tax,
Madt'as
Venkatarama
AyyarJ.
580
SUPREME COURT REPORTS
[1956]
rejected as not being in accordance with them. The
learned Judges, however, granted a certificate under
section 66-A of the Act, and that is how the appeals
come before us.
The first question whether the word "personally"
would exclude signature by an authorised agent on
behalf of the partner was answered in tlie affirmative
by the Madras High Court in Commissioner of Incometax v. Subba Rao('). This was one of the decisions
quoted with approval by this Court in Commissioner
of Agricultural
Income-tax
v. Keshab
Chandra
Mandril("), where the question was whether a rule
framed under the Bengal Agricultural Income-tax Act
that the declaration in the return should be signed by
the individual himself required that he should sign it
personally, and it was held that it did so require.
Sri K. S. Krishnaswami Ayyangar, learned counsel
for the appellant, did not urge any grounds for differing from the above conclusion, and we must therefore
hold, in agreement with the views expressed in the
above decisions, that the signature which is prescribed by the rules is that of the partner himself, and
that they are not complied with by the agent signing
on his behalf.
Then we come to the second 'qUestion-and that is
the substantial question that arises for our determination in this appeal-whether rules 2 and 6 are ultra
vires the rule-making authority. The argument of
the appellant in support of its contention that the
rules are ultra vires may thus be stated: Under the
common law of England, a person has the right to do
through an agent whatever he can do himself, and
that right has also been conferred on him in this
country by section 2 of the Powers-of-Attorney Act
VII of 1882, which runs as follows:
"The donee of a power-of-attorney may, if he
thinks fit, execute or do any assurance, instrument
or thing in and with bis own name and signature, and
his own seal, where sealing is required, by the authority of the donor of the power; and every assurance,
(1) I.L.R. 19i7 'M•d. 167: 19i6 I.T.R. 282.
(2) [19W] S.O.R. i85.
-
S.C.R.
SUPREME COURT REPORTS
581
instrument and thing so executed and done, shall be
1956
as effectual in law as if it had been executed or done Ravida Subba Rao
by the donee of the power in the name, and with the
and at1other
signature and seal, of the donor thereof.
v.
"This section applies to powers-of-attorney The Commissiot1er
created by instruments executed either before or after
of Income-tax,
this Act comes into force".
Madras
Section 26-A of the Act confers on a partner the
Venkatarama
right to apply for registration of the firm, and that
AyyarJ.
right could be exercised both under the common law
and under section 2 of the Powers-of-Attorney Act
through an authorised agent. The sovereign legislature might, if it so chooses, abrogate the rule of common law, and repeal section 2 of the Powers-ofAttorney Act, and enact that the application to be
presented under section 26-A should be signed by the
partner himself and not by any other person; but it
has not done so eith~r expressly or by necessary implication, and, therefore, the application which was
signed by Hariprasada Rao is as good as if it had
beeq signed by Subba Rao. The Rules no doubt require that the signature should be that of the partner
and not that of his agent. But in prohibiting
what would be lawful under the section, the Rules go
beyond the ambit of the authority conferred by section 26-A on the rule-making authority, which is
limited to framing Rules for giving effect to the
principles laid down in the statute. They are therefore ultr:a vires. In the alternative, assuming that the
mandate given to the rule-making authority under
section 26-A is of sufficient amplitude to authorise
the making of the Rules in question, even then, they
must be held to be ultra vires, as they have the effect
of abrogating the common law and of repealing section 2 of the Powers-of-Attorney Act, which confer
on a person the right to act through an agent, and
that being a legislative function cannot be delegated
to a rule-making authority, and section 26-A, if it is
to be construed as conferl'.ing such power on an outside authority, must be struck down as constituting
an unconstitutional delegation by the legislature of
its legislative function.
1956
Rattula Subba Rao
582
SUPREME COURT REPORTS
[1956]
It is the correctness of these contentions, that now
falls to be considered.
and another
According to the law of England-and that is also
v.
the law under the Indian Contract Act, 1872-"every
The Commissioner person who is aui juris bas a• right to appoint an
01 Income-tax,
agent for any purpose whatever, and that be can do
Madras
so when be is exercising a statutory right no lee~
Venkatarama
than when be is exercising any· other right". Per
Ayyar J.
Stirling, J. in Jackson and Oo. v. Napper: In re
Bckmidts' Trade·M12rk('). This rule is subject to certain well-known exceptions as when the act to be
performed is personal in character, or is annexed to a
public office, or to an office involving fiduciary obligations. But apart from such exceptions, the Jaw is
well settled that whatever a person can do himself,
he can do through an agent. It bas accordingly been
held that "at common law, when a person authorizes
another to sign for him, the signature of the person
so signing is the signature of the person authorizing
it". Per Blackburn, J. in The Queen v.Justices of
Kent('). The appellant is therefore right in bis •contention that ·unless the statute itself enacts otherwise,
an application which a partner has to· 1ign wouJd be
in order and valid, if it is signed by his authorised
agent. The question then is whether there .is any·
thing in the Act, which requires that an application
under section 26-A should be signed by the party
personally.
Section 26-A is as follows:
"(I) Application may. be made to the Incometax Officer on behalf of any firm, constituted under
an instrument of partnership specifying the individual shares of the partners, for registration for the
purposes of this_ Act and of any other enactment for
the time being in force relating to income-tax or
super-tal):.
(2) The application shall be made by such per.son
or persons, and .at such times and shall contain Buch
particulars and shall bein such form, and be verified
in such manner, as may be prescribed;· and it shall
(1) [1887] 85 Oh. D. 16!1, 172.
(2) [1812-78] L.B. 8 Q.B. 805, 807.
S.C.R.
SUPREME COURT REPORTS
583
be dealt with by the Income-tax Officer in such manner
1956
as may be prescribed".
Ravula Subba Rao
The section does not, it should be noted, provide that
and another
the application for registration should be signed by
v.
the partner personally, and it is this that forms the The Commissioner
foundation of the contention of the appellant that
0/ Income-tax,
the right which a person has under the general law
Madras
and under section 2 of the Powers-of-Attorney Act to
Venkatarama
act through an agent has not been taken away or
Ayyar J.
abridged by the section. He relies in support of his
contention on the following rules of construction:
(I) Statutes which encroach on the rights of a
subject should be interpreted if possible so as to respect such rights.
[Vide Maxwell on Interpretation
of Statutes, 10th Edition, page 285; Craies on Statute
Law, 5th Edition, pages Ill to ll4). The law is thus
stated by Lord Justice Bowen in In re Ouno: Mans.field
v. Mans.field(1):
"In the construction of statutes, you must not
construe the words so as to take away rights which
already existed before the statute was passed, unless
you have plain words which indicate that such was
the intention of the legislature".
(2) In the absence of clear and unambiguous
language, an intention to alter the existing law should
not be imputed ·to the legislature.
(Vide Craies on
Statute Law, 5th Edition, pages ll4 and ll5).
..
(3) The law does not favour repeal of a statute
by implication, and therefore a later statute should.
not be construed as repealing an earlier one without
express words or by necessary implication.
(Vide
Maxwell on Interpretation of Statutes, 10th Edition,
page 170; Craies on Statute Law, 5th Edition, page
337).
"If it is possible", observed Farwell, J., "It is my
duty so to read the section as not to effect an implied
repeal of the earlier Act": Re Okance(9).
"Unless two Acts are sp plainly repugnant to each
other, that effect cannot be given to both at the same
time, a repeal will.not be implied". Per A. L. Smith, J.
in Kutner v. Pkillipa(8).
(1) [1890] 43 Oh. D. UI, 17.
(!!)· [1986] 1 Oh. !166, 270.
.
(S) [1891] SI Q.B. 1167, .2711.
1956
Ravula Subba Rao
and another
v.
The Commjssiomr
o/ Inconu-taz,
Madras
Venkatarama
A:;yarJ.
584
SUPREME COURT REPORTS
(1956)
In the light of these principles, it is contended that
the true scope of section 26-A is that it confers a
right on a partner to register the firm, and leaves the
modus of the exercise thereof to be regulated by the
existing law,.and that, therefore, far from showing an
intention either to alter the general law as to the
right of a person to act through his agent or to repeal
section 2 of the Powers-of-Attorney Act, the section
depends on their continued operation for its implementation.
Now, the rules of construction on which the appellant relies are well-established.
But then, it should
not be overlooked that they are only aids to ycertain the true intention of the legislature as expressed
in the statute, and the question ultimately is, what
in the context do .the words of the enactment mean?
The following passage from Crawford on "The Construction of Statutes'', 1940 Edition, page 454 cited
by the appellant may be usefully referred to in this
connection:
"Why should a statute be subjected to a strict
or a liberal construction, as the case may be? The
only .answer that can possibly be correct is because
the type of construction utilized gives effect to the
legislative intent. Sometimes a liberal construction
must be used in order to make the legislative intent
effective, and sometimes. such a construction will defeat the intent of the legislature. If this is the proper conception concerning the rule of cdnstruction
to be adhered to, then a strict or a liberal construction is simply a means by which the scope of a statute is extended or restricted in order to convey the
legislative meaning. If this is the proper position to
be accorded strict and liberal constructions, it would
make no difference whether the statute involved was
penal, criminal, remedial or in derogation of common
right, as a distinction based upon this classification
would then mean nothing".
That being the correct position, the question is
whether on its true interpretation, the statute intended that an application under section 26-A should be
signed by the partnel' personally, or whether it could
•
S.C.R.
SUPREME COURT REPORTS
585
be signed by bis agent on his behalf. To decide that,
1956
we must ha.ve regard not only to the language of secRavula Subba Rao
tion 26-A but also to the character of the legislation,
and another
the scheme of the Act and the nature of the right
v.
conferred by the section. The Act is, as stated in the The Commissioner
preamble, one to consolidate and amend the law rea/Income-tax,
-
la ting to income-tax. The rule of construction to be
Madras
applied to such a statute is .thus stated by Lord
Venkataran•a
Herschell in Bank of England v. Vagliano(1):
AyyarJ.
"I think the proper !JOUrse is in the first instance
to examine the language of the statute, and to ask
what is its natural meaning, uninfluenced by any
-
considerations derived from the previous.state of the
law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably "intended to leave it unaltered ........................... .
"
We must therefore construe the provisions of the
Indian Income-tax Act as forming a code complete
in itself and exhaustive of the matters dealt with
therein, and ascertain what their true scope is.
Turning then to the provisions of the Act, considerable light is thrown on their true import by the
decision of this Court in Commissioner of Agricultural
Income-tax v. Keshab Chandra Mandal(9).
There, the
question was as to th~ meaning of Rule 11 framed
under the Bengal Agricultural Income-tax Act, 1944
read with Form No. 5, which required that the
declaration in the return should be signed "in the
case of an individual, by the individual himself". It
was held by this Court on a review of the provisions
of the statute that the intention of the legislature as
expressed therein was to exclude the common law
rule, qui facit per alium facit per se, and the declaration to be valid must be signed by the assessee
personally. It is argued for the app.ellant that Commissioner of Agricultural Income-tax v. Keskab Chandra
Mandal(9) was a decision only on the interpretation
of Rule No. 11 and not on its validity, and that the
question whether the rule was ultra virea or not was
not in issue. That is so, but the materiality of the
(1) [1891] A.O. 107, Hl.
(9) (19llO] S.O.B. '86,
76
1956
Ravula Subba Rao
and another
v.
The Ccnnmissioner
of Income.tax,
Madras
Venkatarama
AyyarJ.
586
SUPREME COURT REPORTS
[1956]
decision to the present controversy lies in this that
the interpretation which was put on Rule 11 as requiring personal signature was based on the conclusion which this Court reached on a consideration of
the relevant provisions of the Bengal Agricultural
Income-tax Act that the intention of the legislature
was to exclude the rule of the common law on the
subject. Now, the provisions of the Bengal Act which
were construed in Commissioner of Agricultural Income-tax v. Keshab Chandra Mandal(') as indicative of
the above intention, are identical in terms with the
corresponding provisions in the Indian Income-tax
Act, and are, in fact, based on them, and it would
therefore be logical to construe the latter as expressing an intention to discard the rule of common law
on the subject.
The relevant provisions of the Bengal. Agricultural
Income-tax Act may now be noticed. Section 25(1)
of the Bengal Act provides that if the Income-tax
Officer is not satisfied that the return made is correct
and complete, he may require the assessee by notice
eit.her to attend at the Income-tax office or to produce
or cause to be produced any evidence on which he
might rely. This corresponds to section 23(2) of
the Indian Income-tax Act.
The point to be noted
with reference to this section is that it contains an
express provision for production of evidence by the
assessee through his agent, a provision which would
have been wholly unnecessary if the common law was
intended to apply. Sections 35 and 36 of the Bengal
Act contain provisions as to who can represent the
assessee and in what proceedings, and they follow
section 61 of the Indian Income-tax Act and form a
code complete in themselves. Then again, both the
Bengal f\ct and the Indian Income-tax Act provide
that certain provisions of the Civil Procedure Code
are applicable to the proceedings under the Act. The
provisions of Order 3 of the Civil Procedure Code enacting that parties may appear and act through recognised agents are not among them. To cut the
discussion short, the effect of the provisions of the
(1) [1900] S.C.B. ~35.
-
-
•
S.C.R.
SUPREME COURT REPORTS
587
Bengal Act is thus summarised in Commissioner of
7956
Agricultural Income-tax v. Keshab Chandra Mandal(1): R ·ul subb Rao
"The omission of a definition of the word 'sign' ";,,; anoth:r
as including a signature by an agent, the permission
v.
under section 25 for production of evidence by an The Commissioner
agent and under sections 35 and 58 for attendance by
01 Income-tax,
h
Madras
an agent 8,nd the omission Of any provision in t e
Act applying the provisions of the Code of Civil Provenkatarama
cedure relating to the signing and verification of
AyyarJ.
pleadings to the signing and verification of the return
while expressly adopting the provisions of that
Code relating to the attendance and examination of
witnesses, production of documents and issuing of
commission for examination and for service of notices
und~ sections 41 and 60 respectively, cannot be
regarded as wholly without significance".
This reasoning applies with equal force to the provisions of the Indian Income-tax Act, and goes far to
support the contention of the respondent that the
common law is not intended to apply to proceedings
under the Act.
Another factor material for the determination of
this question is the nature of the right conferred by
section 26-A. Under the common law of England, a
firm is not a juristic person, the firm name being only
a compendious expression to designate the various
partners constituting it. But, as pointed out by this
Court in Dulichand Laxminarayan v. Commissioner of
Income-tax, Nagpur(9), inroads have been made by
statutes into this conception, and firms have been
regarded as distinct entities for the purpose of those
statutes. One of those statutes is the Indian IncomeTax Act, which treats the firm as a unit for purposes
of taxation. Thus, under section 3 of the Act the
charge is imposed on the total income of a firm, the
partners as such being out of the picture, and accordingly under section 23 of the Act, the assessment will
be on the firm on its total profits. Section 23(5) enacts
an exception to this in the case of firms registered
under the Act, and provides that,
"(a) ······'·the sum payable bythefirmitselfshall
(1) [1950] S.C.R. 435.
(2) A.I.R. 1956 S.C. 854.
588
SUPREME COURT REPORTS
(1956]
7956
not be determined but the total income of each part-
-
ner of the firm, including therein his share of its inRa"';,~ 8n~e1:.~"0 come, profits and gains of the previous year, shall be
• "v.
assessed and the sum payable by him on the basis of
The Commissioner such assessment shall be determined".
01 Income·tax,
Thus, if a firm is registered, it ceases to be a unit for
Madras
b
purposes of taxation and the profits earned y it are
venkatarama
taken, in accordance with the general law of partnerAyyar J.
ship, to have been earned by the individual partners
according to their shares, and they are taxed on their
individual income including their share of profits.
The advantages of this provision are obvious. The
rate of tax chargeable will not. be on the higher scale
provided for incomes on the higher levels but on the
lower one at which the income of the individuarpartner is chargeable. Thus, registration confers on the
partners a benefit to which they would not have been
entitled but for section 26-A, and such a right being
a creature of the statute, can be claimed only in
accordance with the .statute which confers it, and a
person who seeks relief under section 26-A must bring
himself strictly within its terms before he can claim
the benefit of it. In other words, the right is regulated solely by the terms of the statute, and it would
be repugnant to the character of such a right to add
to those terms by reference to other laws. The statute
must be construed as exhaustive in regard to the conditions under which it can be claimed.
Thus, considering the quiistion with reference to the
character of the legislation, the scheme of the statute
and the nature of the right conferred by section 26-A,
the conclusion is irresistible that rules of common
law were not intended to be saved, and that the right
to apply for registration under that section is to be
determined exclusively by reference to the prescriptions laid down therein. If that is the trWl construction, in authorising the rule-making authority to
frame rules as to who can apply for registration under
section 26-A, and when and how, the statute has
merely directed that authority to fill in details in the
field of legislation occupied by it, and it is not denied
that Rules 2 and 6 are within the mandate conferred
-
. .-
..
S.C.R.
SUPREME COURT REPORTS
589
by the section. In this view, section 59(5) of the_ Act
which enacts that "Rules made under this section
shall be published in the official Gazette, and shall
thereupon have effect as if enac~ed in this Act"
directly applies, and the vires of the Rules is beyond
question. Vide the observations of Lord Herschell
in Institute of Patent Agents v. Lockwood(1).
Then, there is the contention of the appellant that
the Rules in question are repugnant to section 2 of
the Powers-of-Attorney Act VII of 1882, and are
therefore ultra vires. In addition to the reasons given
above in support of the conclusion that the rule of
the common law was not intended to operate in the
field occupied by section 26-A, there is a further and
a more compelling reason why this contention should
not be accepted. It is that there is, in fact, no conflict between the two statutory provisions. To understand the scope of section 2 of the Powers-ofAttorney Act, it is necessary to refer to the history
of this legislation. Under the common law of England,
an agent having authority to execute an instrument
must sign in the name of the principal if he is to be
bound. If the agent signs the deed in his name albeit
as agent, he is the person who is regarded as party
to the document and not the principal. It is the
agent alone that can enforce the deed, and it is he
that will be liable on it.
Vide In re International
Contract Company(2); Schack v. Antony(3), Halsbury's
Laws of England, 3rd Edition, Volume 1, page 217,
and Bowstead on Agency, 10th Edition, page 93. To
remove the hardships resulting from this state of the
law, the Conveyancing and Law of Property Act, 1881
(44 and 45, Viet, Chapter 41) enacted section 46,
which is as follows:
·
"(l) The donee of a power of attorney may, if be
thinks fit, execute_ or do any assurance, instrument,
or thing in and with his own name and signature and
his own seal, where sealing is required, by the authority of the donor of the power; and every assurance,
instrument, and thing so executed and done shall be
(1) [1894) A.O. 847, 861.
12) [1871] 6 Ch. App. 626.
(8) 1 M. & 8. 673; 106 E. R. 214.
1956
Rawla Subba Rao
and another
v.
The Commissioner
of Income-tax,
Madras
Venkatarama
Ay:varJ,
590
SUPREME COURT REPORTS
[1956]
1~56
as effectual in law, to all intents, as if it had been
R
1 --;-;;b R
executed or done by the donee of the power in the
•:;,; a;:,,t:er ao name and with the signature and seal of the donor
v.
thereof.
The Commissioner
(2) This section applies to powers of attorney
01 Income.tax,
created by instruments executed either before or after
Madras
the commencement of this Act".
venkatarama
The Indian Legislature immediately followed suit,
Ayyar J.
and enacted the Powers-of-Attorney Act VII of 1882
incorporating in section 2 therein word for word, section 46 of the English Act. The object of this section
is to effectuate instruments executed by an agent but
not in accordance with the rule of the common law
and the enactment is more procedural than substantive. It does not confer on a person a right to act
through agents. It presupposes that the agent has
the authority to act on behalf of the principal, and
protects acts done by him in exercise of that authority
but in his own name. But where the question is as to
the existence or the validity of authority, the section
has no operation. Thus, the fields occupied by the
two enactments are wholly distinct. Section 26-A
says that a partner cannot delegate the exercise of
his rights under that section to an agent. Section 2
of the Powers-of-Attorney Act says that if there can
be and, in fact there is, delegation, it can be exercised in the manner provided therein. There is accordingly no conflict between the two sections, and
no question of repeal arises.
To sum up, the Indian Income-tax Act is a selfcontained code exhaustive of the matters dealt with
th'erein, and its provisions show an intention t~
depart from the common rule, qui facit per alium
facit per se. Its intention again is that a firm should
be given benefit of section 23(5)(a), only if it is registered under section 26-A in accordance with the
conditions laid down in that section and the rules
framed thereunder. And as those rules require the
application to be signed by the partner in person, the
signature by an agent on his behalf is invalid.
In the view which we have taken, the further question raised by the appellant that the power to repeal
-
S.C.R.
SUPREME COURT REPORTS
591
a law being a legislative function, can be exercised
7956
only by the legislature duly constituted and not by R
u1 s bb R
any outside authority, and that the delegation of a:n; a::Ot:er
00
such a power to an outside authority is unconstituv.
tional, does not arise for decision.
The Commissioner
In the result, we agree with Viswanatha Sastry, J.
of Income-tax,
Madras
that rules 2 and 6 are intra vires the powers of the
rule-making authority, and dismiss the appeals with
Venkatarama
costs.
Ayyar J.
MRS. SHIRINBAI MANECKSHA W & OTHERS
v.
NARGACEBAI J. MOTISHAW & OTHERS.
[S. R. DAS C.J., BHAGWA'l'I and S. K. DAS JJ.]
Will-Construction-Substitutional beq1Mst,
Validity
ofI ndian Succession Act (XXXIX of 1925), ss. 67, 129, 180. ·
A Parsi testator by a holograph will provided, "I hereby
give, devise and bequeath to my so, ca.lied mother Mrs. Shirinbai,
............... her heirs, executors and administrators, for her and
their own use and benefit, absolutely and for ever all my estate
and effects, both real and personal, whatsoever and wheresoever'
and of what nature and quality soever, and I hereby appoint her
the said Mrs. Shirinbai Maneckshaw Bejonji Mistry, sole exe·
cutrix of this my Will ............... " The will was attested by two
witnesses one of whom was the husband of Mrs. Shirinbai. Mrs.
Shirinbai a.s the sole executrix obtained probate of the said will
from the High Court and took possession of the estate. A suit
was brought by the heirs of the testator in the Court of the
Civil Judge for a decl&ration that the bequest in favour of Mrs.
Shirinba.i was void in law by operation of s. 67 of the Indian
Succession Act and that. the estate of the testator had, therefore,
become divisible amongst his heirs as on intestacy. The trial Judge
held that the bequest in favour of Mrs. Shirinbai was void under
s. 67 of the Indian Succession Act and there was no gift over but
that the plaintiffs were not the heirs of the testator and, conse·
quently, they could not maintain the suit. On appeal by the plain·
tiffs, the High Court agreed with the first two findings of the trial
Judge, but reversed his decision and decreed the suit holding that
the plaintiffs were the heirs of the testator. It was contended on
behalf of Mrs. Shirinbai and her two daughters in this appeal that
on a. tma construction of the will there was a substitution'al bequest
in favour of the heirs, executors and administrators of Mrs. Shiriu·
1956
May9