Substantial compliance for reference fee and single reference against one common appellate order in income-tax proceedings

A reference application under the Indian Income-tax Act was treated as timely where the assessee remitted the prescribed fee within limitation through an accepted mode and enclosed proof of payment, even though the money order reached the office later; the fee requirement was satisfied by substantial compliance, so the application was not time-barred. A single reference application was also held competent where one common appellate order disposed of two cross-appeals arising from the same assessment, because the operative appellate order was in substance one order and did not require artificial splitting into separate references.

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Issues: (i) whether an application for reference under section 66 of the Indian Income-tax Act, 1922 was time-barred when the assessee despatched the prescribed fee within time but the money order was received after limitation; (ii) whether one reference application was competent in respect of questions arising out of a common appellate order disposing of two cross-appeals.

Issue (i): whether an application for reference under section 66 of the Indian Income-tax Act, 1922 was time-barred when the assessee despatched the prescribed fee within time but the money order was received after limitation.

Analysis: The statutory requirement that the reference application be accompanied by a fee of one hundred rupees did not necessarily demand actual receipt of cash in the Tribunal's office within limitation in every case. The prescribed form and note permitted payment through recognised channels, showing that the mode of remittance was flexible. Where the assessee had despatched the fee within time and enclosed proof of remittance with the application, the requirement was satisfied by substantial compliance, even though the money order itself reached a few days later.

Conclusion: The application was not time-barred and could not be rejected for non-compliance with the fee requirement.

Issue (ii): whether one reference application was competent in respect of questions arising out of a common appellate order disposing of two cross-appeals.

Analysis: A reference under section 66 was directed against the operative order made by the Tribunal on the assessment, not against the separate reasons in the cross-appeals. Where one assessment order gave rise to two cross-appeals and both were disposed of by one combined appellate order affecting the same assessment, the operative order was in substance one order. In such a situation, one reference application could cover all questions arising from that common order; the form of application did not compel artificial splitting of a single operative adjudication into multiple applications.

Conclusion: One reference application was competent for all questions arising from the combined order in the two cross-appeals.

Final Conclusion: The Tribunal was directed to treat the reference application dated 28 October 1968 as filed within time and to consider it for all questions arising from the two cross-appeals.

Ratio Decidendi: A reference application under the Income-tax Act is satisfied by substantial compliance with the fee requirement when the prescribed fee is duly remitted within limitation through an accepted mode, and a single reference lies against one operative appellate order even if that order disposes of two cross-appeals.

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