Advisory jurisdiction in tax references: High Court must answer the referred question and cannot remand like an appellate court.

In a reference under section 66 of the Income-tax Act, 1922, the High Court exercises advisory jurisdiction and must answer the question referred on the facts stated by the Tribunal. If the case stated is incomplete or omits material facts, the proper course is to seek a supplementary statement of case under section 66(4). The High Court cannot assume appellate powers by setting aside the Tribunal's order and remitting the matter for reconsideration merely because another issue should have been examined. The correct approach is to dispose of the reference within the limits of the stated facts.

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Issues: Whether, in a reference under section 66 of the Income-tax Act, 1922, the High Court could set aside the Tribunal's order and remit the matter for reconsideration instead of answering the question referred to it.

Analysis: A reference under section 66 is an exercise of advisory jurisdiction. The High Court is required to answer the question referred on the facts stated by the Tribunal. If the statement of case is incomplete or material facts are omitted, the proper course is to call for a supplementary statement of case under section 66(4). The High Court has no appellate power to set aside the Tribunal's order merely because it considers that another issue ought to have been examined by the Tribunal.

Conclusion: The High Court had no power to set aside the Tribunal's order and remit the matter in the manner adopted.

Final Conclusion: The reference was sent back to the High Court for disposal in accordance with law, and the appeals succeeded.

Ratio Decidendi: In a tax reference, the High Court must answer the referred question on the stated facts and may seek a supplementary statement only when necessary; it cannot exercise appellate powers by setting aside the Tribunal's order and remanding the matter.

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