Reference jurisdiction in income tax cannot reweigh evidence; reassessment stood justified on the Tribunal's factual findings.

In a reference under section 66(1) of the Income-tax Act, 1922, the High Court's jurisdiction is confined to answering the legal question on the facts found by the Tribunal and it cannot reappraise evidence or substitute its own factual view unless the finding is specifically challenged in law. Applying that principle, the Tribunal's finding that the assessee had withheld material income stood undisturbed. On those facts, the conditions for reassessment under section 34(1)(a) were satisfied, so the reassessment was justified. The decision emphasises the limited scope of reference proceedings and the need to contest factual findings through an appropriate question of law.

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Issues: (i) Whether, in a reference under section 66(1) of the Income-tax Act, 1922, the High Court could reappraise the evidence and interfere with the Tribunal's finding on non-disclosure of material facts; (ii) Whether the reassessment made under section 34(1)(a) of the Income-tax Act, 1922 was justified on the facts found by the Tribunal.

Issue (i): Whether, in a reference under section 66(1) of the Income-tax Act, 1922, the High Court could reappraise the evidence and interfere with the Tribunal's finding on non-disclosure of material facts.

Analysis: The reference jurisdiction under section 66(1) is confined to answering the question of law arising on the facts found by the Tribunal. The High Court is not entitled to act as a court of appeal by reweighing the evidence or substituting its own view on facts for that of the Tribunal. A finding of fact may be open to challenge in law if there is no evidence to support it or if it is perverse, but such a challenge must be raised by an appropriate reference question and cannot be entertained by the High Court in the absence of one.

Conclusion: The High Court could not reappraise the evidence or disturb the Tribunal's factual finding in the reference proceedings.

Issue (ii): Whether the reassessment made under section 34(1)(a) of the Income-tax Act, 1922 was justified on the facts found by the Tribunal.

Analysis: On the facts as found by the Tribunal, the assessee had deliberately withheld disclosure of the relevant income at the proper time, and the statutory conditions for reassessment under section 34(1)(a) were satisfied. The High Court's contrary conclusion rested on an impermissible reassessment of the evidence rather than on the Tribunal's findings.

Conclusion: The reassessment under section 34(1)(a) of the Income-tax Act, 1922 was justified.

Final Conclusion: The reference question was answered in the affirmative and the revenue's case succeeded because the High Court exceeded the limits of reference jurisdiction by disturbing the Tribunal's findings.

Ratio Decidendi: In a reference under section 66(1) of the Income-tax Act, 1922, the High Court must answer the legal question on the facts found by the Tribunal and cannot reappraise evidence or interfere with a factual finding unless the validity of that finding is specifically put in issue.

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