TaxTMI 
TaxTMI 
1959 (5) TMI 4
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....and 1943. For the assessment years 1943-44 and 1944-45 (account years 1942 and 1943), the Income-tax Officer computed the British Indian income of the appellant on a proportionate basis under section 4(1)(a) of the Act. In the account year 1942 its total sales amounted to Rs. 66,14,852 out of which sale proceeds amounting to Rs. 35,92,157 as detailed below were held by the Income-tax Officer to have been received in British India : Cheques on the Imperial Bank issued by the Supply Department of the Government of India Rs. 2,58,987 Sale proceeds received through Trikamlal Mahasukhram Rs. 20,24,190 Other cheques received at Bhavnagar but drawn on banks in British India Rs. 13,08,980 ------------------------- Rs. 35,92,157 ------------------------- The Income-tax Officer computed the income of the appellant at Rs. 27,11,136 on a proportionate basis, i.e., proportionate to the sales in and outside British India. He held that the income amounting to Rs. 14,72,267 was received in British India under section 4(1)(a) of the Act. There was no dispute in regard to the sale proceeds received through Trikamlal Mahasukhram. In respect of the assessment year 1944-45 corre....
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....ed from Government at Bhavnagar and that the money was also received in Bhavnagar." In doing so, the Tribunal followed the judgment of the Bombay High Court in the case of Kirloskar Brothers Ltd. v. Commissioner of Income-tax. In view of the fact however that an appeal had been filed in this court against that decision of the Bombay High Court the Tribunal further stated : " We might point out that in case the Supreme Court does not uphold the Bombay High Court decision in Kirloskar case an enquiry will have to be made as to whether the assessee company's banks at Ahmedabad acted as the assessee company's agents for collecting the money due on the cheques." In respect of the assessment year 1944-45, the Tribunal, after directing the Income-tax Officer to verify the correctness of the figure of the amounts received by the appellant by cheques from the Government (i.e., whether it was Rs. 12,97,631 as contended for by the appellant or Rs. 16,72,693 as held by the Income-tax Officer or any other figure), held that the cheques representing the said amount were received at Bhavnagar and the monies or sale proceeds were also received in Bhavnagar. The Tribunal also held that anothe....
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....e, held that the amount was received in British India. The Appellate Assistant Commissioner confirmed the Income-tax Officer's action. The Tribunal, however, relied upon the Bombay High Court decision in Kirloskar Brothers' case and held that the amount was received in Bhavnagar." " As regards items of Rs. 13,08,980 and Rs. 5,53,447 received in the accounting years relevant to the assessments for 1943-44 and 1944-45 respectively, the relevant facts are that the company received these cheques and sent them to their bankers in Ahmedabad for collection............The Tribunal held that the sale proceeds were received at Bhavnagar on the basis of the Bombay High Court's decision in the Kirloskar Brothers' case without enquiring as to whether the cheques were received by the company in unconditional discharge of the drawer's liability. On these facts the respondent submitted that the following questions of law arose out of the order of the Tribunal : " (i) Was there any evidence on the record to justify the Tribunal's finding that the mere receipt by the assessee of cheques of Rs. 2,58,987 and Rs. 13,08,980 in Bhavnagar amounted to receipt of the above amounts in Bhavnagar even th....
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....s aforesaid and this aspect of the case, viz., whether any portion of these cheques were received by post and if so whether there was any request by the appellant express or implied that the amounts of those cheques should be remitted to Bhavnagar by post, had certainly not been canvassed before any of the Income-tax authorities or before the Tribunal and did not find its place in the order of the Tribunal and any question of law appertaining thereto could not be said to arise out of the said order of the Tribunal. On the materials as they stood on the record then, the Tribunal drew up on November 5, 1952, a statement of case in which all the facts and events above referred to were set out. Besides the same the Tribunal also referred in paragraph 8 thereof to two letters on the record which showed that the cheques from the Supply Department were received by post. It also annexed a sample agreement form on record between the appellant and its customers other than the Government and annexed thereto the copies of the Appellate Assistant Commissioner's orders for the assessment years 1943-44 and 1944-45. The two letters showing that the cheques from the Supply Department were receive....
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....ised in the reference. It must not be forgotten that under section 66(4) of the Income-tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we can properly exercise our advisory jurisdiction." In the result, the High Court directed that a supplementary statement of case should be submitted by the Tribunal on the following points : " On the finding of the Tribunal that all the cheques were received in Bhavnagar, the Tribunal to find what portion of these cheques were received by post,...whether there was any request by the assessee, express or implied, that the amounts which are the subject-matter of these cheques should be remitted to Bhavnagar by post. Mr. Joshi concedes that to the extent that the cheques were not received by post but by hand, the receipt will be for the purposes of tax in Bhavnagar." The appellant filed a petition in the High Court on November 22, 1955, for the grant of a certificate under section 66A(2) of the Act to appeal to this court from the said judgment and order of the High Court. This application was dismissed by the High Court by its order dated December 8, 1955, with the resul....
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....ellate Tribunal to state the case and to refer it, and on receipt of any such requisition the Appellate Tribunal shall state the case and refer it accordingly.... (4) If the High Court is not satisfied that the statements in a case referred under this section are sufficient to enable it to determine the question raised thereby, the court may refer the case back to the Appellate Tribunal to make such additions thereto or alterations therein as the court may direct in that behalf." It is clear on a plain reading of the terms of section 66(1) that the only question of law which the assessee or the Commissioner can require the Tribunal to refer to the High Court is "any question of law arising out of the order of the Tribunal" so that if the question of law which the assessee or the Commissioner requires the Tribunal to so refer to the High Court does not arise out of its order the Tribunal is not bound to refer the same. What has, therefore, to be looked at in the first instance is whether the question of law thus required to be referred arises out of the order of the Tribunal. The Tribunal no doubt has got before it the facts which are admitted and/or found by the Tribunal and wh....
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....diction to refer the case back to the Tribunal to make such additions thereto or alterations therein as the court may direct in that behalf only for the purpose of determining the question referred to it. If the question actually referred does not bring out clearly the real issue between the parties, the High Court may reframe the question so that the matter actually agitated before the Tribunal may be raised before the High Court. But section 66(4) does not enable the High Court to raise a new question of law which does not arise out of the Tribunal's order and direct the Tribunal to investigate new or further facts necessary to determine this new question which had not been referred to it under section 66(1) or section 66(2) and direct the Tribunal to submit a supplementary statement of case. This power and jurisdiction which is vested in the High Court is to be exercised within the four corners of section 66. If under section 66(1) and section 66(2) the statement of case has to be drawn up on the basis of the facts which are admitted and/or found by the Tribunal and this is the requirement also of paragraph 3 of the prescribed form--the scope of such statement of case cannot, in....
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....wn, therefore, failed before the Commissioners to establish the only measure of value for which it was contending. It was, however, suggested that this difficulty could be avoided by sending the matter back to the Commissioners, so as to give the Crown an opportunity of setting up a different measure of value supported by different evidence. Even assuming that this was the only difficulty in the way of the Crown's argument, it would not, in my opinion, have been proper to take this course. The Crown failed in its contention on a matter of fact and it must abide by the result : it would be contrary to all principle to give it another chance to establish by fresh and different evidence a quite different contention which, if it was desired to rely upon it, ought to have been advanced in the first instance. Our task is to deal with the case on the basis of the facts as found by the Commissioners upon the submissions made to them, and on this basis the value of the investments has not been established." In Commissioner of Income-tax v. State Bank of India Chakravartti, C. J., who delivered the judgment of the High Court at Calcutta said at page 551 : " We intimated to Mr. Meyer as s....
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....ement of the case is subsequently called for, naturally the Tribunal would want to elaborate its decision by pointing out various materials and pieces of evidence to which it had not referred in the appellate order. But all that can be referred to in the statement of the case are materials and evidence which were before the Tribunal when it heard the appeal. A statement of the case is not intended for the purpose of buttressing up the order of the Appellate Tribunal or further fortifying it by requisitioning to its aid materials and evidence which were not before the Tribunal but which it discovers by investigation after the order was passed in appeal." Much more so would be the case where no such material and evidence were at all in existence when the High Court in exercise of its jurisdiction under section 66(4) of the Act referred the case back to the Tribunal and asked it to make such additions thereto or alterations therein as the court may direct in order to enable it to determine the question raised thereby. Adopting such a procedure would involve, in effect, raising fresh issues and taking fresh evidence in order that fresh facts may be found which facts certainly were no....
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....ith reference to the movables as distinct from the immovables, under the transaction and if the appellant considered that, in view of that distinction, further enquiry was called for, it was incumbent upon it to apply to the Tribunal itself to order it and not having done so, it had no right to call upon the High Court to remand the matter for that purpose. In our opinion the High Court was justified in declining to entertain this point." If there is no power in the High Court to remand the case to the Tribunal for fresh findings of facts on further enquiry in the manner stated above, much less would the High Court have the power while exercising its jurisdiction under section 66(4) of the Act to refer the case back to the Tribunal to make such additions thereto or alterations therein as the court may direct as would require the Tribunal to embark upon a fresh line of enquiry which had never been canvassed at any time before the Income-tax authorities or the Tribunal in the first instance and record fresh findings on evidence adduced by the parties in that behalf. Our attention was drawn on behalf of the Revenue to the observations of Fazl Ali, J., (as he then was) in Commissio....
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....r of the Tribunal. The decision of the Privy Council in Sir Sunder Singh Majithia v. Commissioner of Income-tax was also referred to by the Revenue in this context. In that case the question of law which was formulated was in the following terms : " In all the circumstances of the case, having regard to the personal law governing the assessee and the requirements of the Transfer of Property Act (IV of 1882) and the Stamp Act (II of 1899) has the deed of partnership dated February 12, 1933, brought into existence a genuine firm entitled to registration under the provisions of section 26A of the Act." The High Court while answering this question did not advert to the relevant aspect of the question and this result was brought about because the Commissioner had taken pains to state some matters very fully, but he had not found the material facts as he should have done. The various essential facts were not found and stated by the Commissioner and the Privy Council observed that the referred question could not be answered until the High Court had exercised its powers under sub-section (4) of section 66 of the Act and left it to the discretion of the High Court to specify the parti....