Reference under section 66(3): Commissioner must state material facts, and a proper case may be directed where findings are incomplete.

A reference under section 66(3) requires the Commissioner to state all material facts needed for the court to answer the referred question, not merely to frame the legal issue. Where the question concerns the assessee's status for income-tax purposes and the facts are insufficiently found, the court may require a proper case to be stated with relevant findings. On that basis, the application was allowed and the Commissioner was directed to state the case on the identified question.

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Issues: Whether the application under section 66(3) should be allowed and the Commissioner directed to state a case on the question whether the assessees were to be treated for income-tax purposes as a Hindu undivided family.

Analysis: The application raised a disputed question requiring the Commissioner to state the relevant facts as well as his opinion. The Court emphasised that in a case stated, the Commissioner must set out all material facts necessary for the Court to answer the question referred, and not merely formulate the legal issue. Since the real controversy was the assessee's status for income-tax purposes, the Rule was made absolute on that question and the matter was required to come back with proper findings of fact.

Conclusion: The application succeeded and the Commissioner was directed to state the case on the identified question.

Ratio Decidendi: In a reference under section 66(3), the Commissioner must state all material facts necessary for the Court to determine the referred question, and the Court may require a case to be stated where the facts are insufficiently found.

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