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1962 (11) TMI 45 - SC - Income TaxWhether the proportionate profits on the sale proceeds aggregating. Rs. 9,53,304 for the assessment year I94I-42 and Rs. 6,04,588 for the assessment year I942-43 or any part thereof were received by or on behalf of the assessee company in British India ? whether the order passed asking for a supplemental statement with a direction for taking additional evidence was permissible to the High Court under section 66(4) of the Income-tax Act? Held that - The Appellate Tribunal held that the income did not accrue to the assessee in Baroda State but did not decide the question whether she was entitled to the benefit of the Taxation Concessions Order. The High Court field that the Taxation Concessions Order did not apply to the assessee but did not decide the question as to whether the income had accrued to the assessee in Baroda State. Thus, the Appellate Tribunal raised one question and the High Court answered another. This court held that the High Court had exceeded its jurisdiction in going out of the point raised by the Appellate Tribunal and decided a different point of law and that section 66 of the Income-tax Act empowered the High Court to answer a question of law arising out of the order of the Appellate Tribunal and it did not confer any jurisdiction to decide a different question of law not arising out of such order but it was possible that the same question of law may involve different facts and the High Court could amplify the question to take in all the facts but the question must still be one arising out of the Appellate Tribunal s order which was before the Tribunal or was decided by it. It could not decide an entirely different question. The High Court had no jurisdiction to direct the Tribunal to submit a supplemental statement of the case aftertaking additional evidence.
Issues Involved:
1. Jurisdiction of the High Court to call for a supplemental statement and allow additional evidence. 2. Whether the profits on the sales proceeds were received in British India and thus taxable. Detailed Analysis: 1. Jurisdiction of the High Court to Call for a Supplemental Statement and Allow Additional Evidence: The appellant contended that the High Court's order dated September 23, 1955, asking for a supplemental statement and allowing additional evidence was without jurisdiction. The Commissioner of Income-tax argued that since no objection was taken at the time of the order and it was not appealed against, the question of jurisdiction cannot be raised at this stage. The court examined the jurisdiction of the High Court under section 66 of the Income-tax Act, which provides that if any question of law arises out of the order of the Appellate Tribunal, it can be referred to the High Court for its opinion. The High Court may refer the case back to the Appellate Tribunal for additions or alterations but cannot direct additional evidence to be taken. This was reaffirmed in the cases of New Jehangir Vakil Mills v. Commissioner of Income-tax and Mrs. Kusumben D. Mahadevia v. Commissioner of Income-tax, where it was held that the High Court's jurisdiction is advisory and confined to answering questions of law arising from the Tribunal's order based on facts already on the record. The court concluded that the High Court had no jurisdiction to direct the Tribunal to submit a supplemental statement of the case after taking additional evidence. 2. Whether the Profits on the Sales Proceeds Were Received in British India and Thus Taxable: The assessee company, registered in the erstwhile Baroda State, contended that the profits from sales to British India were received in Baroda State and hence not taxable in British India. The Income-tax Officer found that the sale price was received at Petlad in Baroda State by means of cheques, drafts, and hundis sent by post. The Appellate Tribunal held that these were received by the assessee's agents in British India, making the profits taxable. The High Court, on April 21, 1960, answered in the affirmative, stating that the mode of payment accepted by the assessee implied a request to remit by post, thus the profits were received in British India. The Supreme Court, while addressing the jurisdiction issue, did not express an opinion on the merits of this question and remitted the matter back to the High Court to give its decision on the question of law referred to it as required under section 66(5) of the Act. Conclusion: The Supreme Court allowed the appeals, holding that the High Court had no jurisdiction to direct the Tribunal to take additional evidence. The matter was remitted to the High Court to decide on the question of law based on the facts already on record. The respondent was ordered to pay the costs of the appellant in the Supreme Court and the High Court.
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