Reference jurisdiction may be declined when the party seeking the income-tax reference does not appear at hearing.

In a reference under section 66 of the Income-tax Act, 1922, the High Court's duty to answer questions of law does not extend to a situation where the party at whose instance the reference was made fails to appear at the hearing. The Court reasoned that the reference jurisdiction was invoked by that party, and its absence could indicate no continuing interest in obtaining an opinion. In such circumstances, the Court may decline to return an answer rather than proceed in the party's absence.

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Issues: Whether the High Court was bound to answer the question of law referred under section 66 of the Income-tax Act, 1922 when the assessee, at whose instance the reference had been made, remained absent at the hearing.

Analysis: Section 66(5) required the High Court to decide the questions of law raised in a reference, but the Court held that this obligation did not extend to a case where the party who sought the reference did not appear when the matter was called on for hearing. The reference jurisdiction was invoked at the instance of that party, and its absence indicated that it was no longer interested in pursuing an answer on the question referred. The Court preferred the view that, in such circumstances, it was open to decline to give an answer rather than proceed in the party's absence.

Conclusion: The High Court was not bound to answer the reference and could decline to return an opinion when the assessee, at whose instance the reference was made, was absent.

Ratio Decidendi: In a reference under section 66 of the Income-tax Act, 1922, the High Court may decline to answer the referred question of law if the party who sought the reference does not appear at the hearing.

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