Common question of law cannot be referred from a revisional order merely affirming the appellate decision
Under the proviso to Section 66(2), a question of law common to an earlier appellate order and a revisional order was not referable from the revisional order where the Commissioner merely affirmed the subordinate decision after hearing the parties on merits. The proper reference lay from the appellate order itself, so the revisional order was not referable on that common question. On the exemption issue, interest on securities was held to be taxable because it was receivable and actually received when ownership vested in the assessee, and no finding supported the alleged earlier oral charitable trust. The interest was therefore included in total income and not exempt as charitable trust income.
Issues: (i) Whether an order made by the Commissioner under revision declining to interfere with the Appellate Assistant Commissioner's order was a prejudicial order referable under Section 66(2) when the question of law was common to the appellate order and the revisional order. (ii) Whether the interest from the securities was correctly included in the assessee's total income, or was exempt as income held on charitable trust under Section 4(3)(i).
Issue (i): Whether an order made by the Commissioner under revision declining to interfere with the Appellate Assistant Commissioner's order was a prejudicial order referable under Section 66(2) when the question of law was common to the appellate order and the revisional order.
Analysis: The revisional order was treated in substance as an order affirming the subordinate order after hearing the parties on merits. However, the proviso to Section 66(2) limited reference from a Section 33 order to a question of law arising only from that revisional order. Where the question of law was already common to the earlier appellate order and the revisional order merely agreed with it, the proper course was to seek reference from the appellate order itself. On that construction, the revisional order was not referable on the common question of law.
Conclusion: The order under Section 33 was not a prejudicial order referable under Section 66(2) on the question common to the earlier appellate order.
Issue (ii): Whether the interest from the securities was correctly included in the assessee's total income, or was exempt as income held on charitable trust under Section 4(3)(i).
Analysis: The finding recorded was that the interest was receivable and actually received at a time when ownership of the securities vested in the assessee. The claim of an earlier oral charitable trust was not supported by any finding. The issue therefore turned on the factual finding as to ownership and receipt, and no ground existed to disturb the Commissioner's conclusion.
Conclusion: The interest was rightly included in the assessee's total income and was not exempt as charitable trust income.
Final Conclusion: The reference failed on the jurisdictional point and also on the exemption claim, with the result that the assessee obtained no relief on the substantive tax issue.
Ratio Decidendi: Under the proviso to Section 66(2), a question of law that is common to the earlier appellate order and the revisional order is not referable from the revisional order unless it arises only from that revisional order.
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