Limitation on directing additional questions: a court cannot compel a tribunal to answer questions not arising from its order, so tribunal findings stand.

High Court lacked power to direct the Tribunal to state a case on a question that did not arise from the Tribunal's order; where the Tribunal was not invited to consider a question and had no opportunity to decide it, directing a statement of case on that question was incorrect. The Tribunal's decision was not vitiated by partial review of evidence because the additional material complained of was not before the Tribunal and the Tribunal's credibility findings were based on the record; issues not raised before the Tribunal cannot be first urged in the High Court. The High Court order is set aside and the appeal allowed.

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Issues: (i) Whether the High Court was entitled to direct the Income-tax Appellate Tribunal to state a case on a question which did not arise out of the Tribunal's order; and (ii) Whether the Tribunal's decision was vitiated for having decided the appeal on a partial review of the evidence.

Issue (i): Whether the High Court could require the Tribunal to state a case on a question not arising out of the Tribunal's order.

Analysis: The Court examined the scope of section 66(1) and (2) procedures and the established rule that the High Court may call for a statement of case only on questions arising out of the Tribunal's order. The Court observed that where the Tribunal was not invited to consider a particular question and had no opportunity to decide it, the High Court cannot direct the Tribunal to state a case on that question. The High Court may decline to answer questions that are academic, irrelevant, or do not determine the real dispute between the taxpayer and the department. The power to reframe or call for supplementary statements is limited to clarifying the question referred or to enable determination of the question based on material already on the record; it cannot be used to reopen factual enquiry or permit fresh evidence not before the Tribunal.

Conclusion: The High Court was not entitled to direct the Tribunal to state a case on a question which did not arise out of the Tribunal's order; the direction to state a case on that question was incorrect.

Issue (ii): Whether the Tribunal's decision was vitiated for having decided the appeal on a partial review of the evidence.

Analysis: The Court found that the alleged additional evidence (the statement about 494 notes received in realization of a cheque) was not before the Tribunal, having been first produced in proceedings under section 66(2). The Tribunal's decision was shown to be based on the evidence actually on the record; it had evaluated the explanations and found them not credible. There was no demonstration that the Tribunal ignored material evidence on the record or denied the parties opportunity to explain discrepancies; complaints that were not raised before the Tribunal could not be raised for the first time before the High Court to impeach the Tribunal's appreciation of evidence.

Conclusion: The Tribunal's decision is not vitiated on the ground of partial consideration of evidence; the finding based on the record stands.

Final Conclusion: The High Court's order directing the Tribunal to state a case on a question that did not arise out of the Tribunal's order is set aside; the appeal is allowed.

Ratio Decidendi: A High Court cannot require a Tribunal to state a case on a question that does not arise out of the Tribunal's order, and a tribunal's appreciation of evidence will not be set aside on grounds not raised before it or where the impugned question was not before the tribunal.

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