1963 (11) TMI 90 - HC - Income Tax

Summary

Issues:
1. Maintainability of appeal challenging deletion of sum from income computation.
2. Jurisdiction of Tribunal to refer questions of law arising from orders.
3. Interpretation of sections 33(4) and 66(1) of the Income Tax Act.

Analysis:

Issue 1:
The case involved a question on the maintainability of an appeal filed by the Income-tax Officer challenging the deletion of a sum of Rs. 90,000 from the income computation of the assessee. The Income-tax Officer initially included the amount as income from undisclosed sources, but the Appellate Assistant Commissioner later excluded it after further inquiry. The Tribunal, after hearing arguments, set aside the assessment order and directed a fresh assessment. The Tribunal also allowed a reference application under section 66(1) for stating the case to the High Court.

Issue 2:
The Tribunal's jurisdiction to refer questions of law was challenged based on the order dates. The Tribunal passed an order on December 15, 1955, calling for a report from the Income-tax Officer and later passed a final order on January 24, 1957, setting aside the assessment and directing a fresh assessment. The High Court held that the reference application made by the assessee was not maintainable as it was based on the order dated December 15, 1955, which was not a final order under section 33(4). The Tribunal was found to have no jurisdiction to state the case based on an interlocutory order.

Issue 3:
The interpretation of sections 33(4) and 66(1) of the Income Tax Act was crucial in determining the Tribunal's authority to refer questions of law. The High Court clarified that section 66(1) allows for reference only in respect of orders passed under section 33(4), which are final orders on appeal. The Court emphasized that the legislature's intent was against reference applications for interlocutory orders. The judgment highlighted the distinction between final remand orders and interlocutory remand orders, emphasizing that only final orders under section 33(4) are eligible for reference under section 66(1).

In conclusion, the High Court held that the Tribunal had no jurisdiction to state the case to the court based on an interlocutory order, and the reference was returned unanswered. The Commissioner of Income-tax was awarded costs for the reference, and counsel fees were assessed.