1930 (3) TMI 17 - HC - Income Tax

Application for mandamus dismissed in tax matter, emphasizing need for supporting materials

E.M. Chettiar Firm Versus Commissioner of Income Tax

The Court dismissed the application for mandamus against the Commissioner of Income Tax under Section 66(3) of the Income Tax Act. The Commissioner's ... - Issues:1. Application for mandamus against the Commissioner of Income Tax under Section 66(3), Income Tax Act.2. Interpretation of a direction given by a Bench of the High Court in an earlier reference between the same parties.3. Commissioner's refusal to admit a petition for reference on various points of law.4. Determination of whether the action taken by the Bench was under Sub-section (4) or Sub-section (5) of Section 66.5. Consideration of the duty of an appellate tribunal to give reasons for its conclusions.6. Whether the Commissioner's decision was based on revision or appeal.7. Assessment of whether there was a question of law that could be referred to the Court.Analysis:1. The judgment involves an application for mandamus against the Commissioner of Income Tax under Section 66(3) of the Income Tax Act. The petitioners, a business concern, sought a mandamus to compel the Commissioner to state a case in law following a direction given by a Bench of the High Court in an earlier reference between the same parties. The Bench had provided guidance on the legality of an enhancement of assessment by the Assistant Commissioner, emphasizing the need for materials to support the increase.2. The Commissioner, acting on the Bench's direction, called upon the Assistant Commissioner to provide detailed reasons for the assessment enhancement. After considering the report submitted by the Assistant Commissioner, the Commissioner upheld the enhancement, stating that there were ample materials to support the conclusions. The petitioners then requested a reference to the High Court on various points of law arising from the Commissioner's confirming order, but the Commissioner refused, citing that it did not arise from an order under specific sections of the Act.3. The crux of the issue lies in determining whether the action taken by the Bench was under Sub-section (4) or Sub-section (5) of Section 66. The petitioners argued that the hearing before the Commissioner was an appeal, not a revision, based on the language used in the Bench's judgment. However, the Commissioner viewed the action as falling under Sub-section (5), which mandates the High Court to decide questions of law raised and deliver a judgment containing the grounds for the decision.4. Justice Carr concurred with the decision and emphasized that the Commissioner erred in basing his refusal of a reference on the grounds of revision. Section 66(5) of the Act requires the Commissioner to dispose of the case in accordance with the Court's judgment. He clarified that the petitioners' complaint about the lack of detailed grounds for the assessment decision was a matter of propriety, not law, and thus beyond the High Court's jurisdiction.5. Ultimately, the judgment highlighted that the petitioners' failure to provide proper material for assessment led to the current situation. The Court dismissed the application for mandamus, ruling in favor of the Crown, and emphasized that the Commissioner's decision was more akin to a referred appeal without further recourse to the Court. The judgment underscored the importance of clarity in legal proceedings and the distinction between revision and appeal in tax matters.