Limitation-based rejection of an income-tax appeal is not a merits order and does not trigger reference jurisdiction.

A refusal to entertain an income-tax appeal as time-barred is not an appellate order on merits under Section 31 because the assessment is never examined or confirmed. Only when an appeal is admitted and decided on merits does the appellate authority act under Section 31 by confirming, reducing, enhancing, annulling, or setting aside the assessment. As no Section 31 order existed, the statutory condition for invoking reference jurisdiction under Section 66(2) was absent, and the High Court could not require the Commissioner to state a case.

---

---

Issues: Whether an order rejecting an appeal as time-barred amounts to an order under Section 31 of the Income Tax Act so as to attract Section 66(2) of the Income Tax Act and empower the High Court to require the Commissioner to state a case.

Analysis: An appeal filed beyond the prescribed period may either be admitted on sufficient cause being shown or refused at the threshold under Section 30(2). Only where the appeal is admitted and dealt with on merits does the Assistant Commissioner act under Section 31 by confirming, reducing, enhancing, annulling, or setting aside the assessment. A dismissal at the stage of limitation, where the assessment is not examined at all, is not a confirmation of assessment and is properly understood as a refusal to entertain the appeal. Since no order under Section 31 had been passed, the condition precedent for invoking Section 66(2) was absent.

Conclusion: The High Court could not direct the Commissioner to state a case under Section 66(2) of the Income Tax Act, and the application failed.

Ratio Decidendi: A refusal to entertain an appeal as barred by limitation is not an appellate order on merits and does not amount to an order confirming the assessment for the purpose of reference jurisdiction.

---