Certified appeals under income tax law were confined to fit-for-appeal cases and section 66A was not retrospective.
The right of appeal from a High Court judgment on a reference under the Indian Income Tax Act, 1922 was confined to cases certified as fit for appeal under Section 109(c) of the Code of Civil Procedure; it did not extend to cases within Section 110, because Section 66A(2) used the same limiting language and Section 66A(3) did not widen the class of appealable cases. Section 66A also did not operate retrospectively to create a statutory appeal from High Court orders made before its commencement, as the provision contained no express words or necessary intendment and was framed for operation after coming into force. The petitions therefore failed for want of a statutory right of appeal.
Issues: (i) Whether the right of appeal from a High Court judgment on a reference under Section 66 of the Indian Income Tax Act, 1922 was confined to cases certified as fit for appeal under Section 109(c) of the Code of Civil Procedure, 1908, or extended to cases falling under Section 110 of that Code; (ii) Whether Section 66A of the Indian Income Tax Act, 1922 applied retrospectively so as to create a statutory right of appeal from High Court orders made before the amendment came into force.
Issue (i): Whether the right of appeal from a High Court judgment on a reference under Section 66 of the Indian Income Tax Act, 1922 was confined to cases certified as fit for appeal under Section 109(c) of the Code of Civil Procedure, 1908, or extended to cases falling under Section 110 of that Code.
Analysis: Section 66A(2) conferred an appeal only from a judgment of the High Court certified to be a fit one for appeal to His Majesty in Council. The language used was the same as that in Section 109(c) of the Code of Civil Procedure, 1908. Section 66A(3), by referring to the Code only so far as may be, did not enlarge the class of appealable cases. The statutory right was therefore limited to certified cases and did not extend by reason of Section 110.
Conclusion: The right of appeal was confined to certified cases under Section 109(c) and did not extend to Section 110 cases.
Issue (ii): Whether Section 66A of the Indian Income Tax Act, 1922 applied retrospectively so as to create a statutory right of appeal from High Court orders made before the amendment came into force.
Analysis: A provision affecting the finality of orders already final when the statute came into force touches existing rights and is not to be applied retrospectively unless expressly so provided or required by necessary intendment. Section 66A contained no such express words or necessary implication. The reference in Section 66A(1) to a Bench of not less than two Judges also indicated operation only after the section came into force. Accordingly, no statutory appeal arose against pre-amendment orders.
Conclusion: Section 66A did not operate retrospectively to create a statutory appeal from orders made before its commencement.
Final Conclusion: The petitions failed because no statutory right of appeal was available on the facts, and the Court declined to grant leave in the exercise of prerogative discretion.
Ratio Decidendi: A statutory appeal affecting the finality of an existing order will not be treated as retrospective absent express words or necessary intendment, and where the statute confines the appeal to cases certified as fit for appeal, that limitation cannot be expanded by reference to the general appeal provisions of the Code.
TaxTMI 
AI Drafter ✕
TaxTMI 
