1949 (8) TMI 17 - HC - Income Tax

Summary

Issues Involved:
1. Whether the Tribunal was legally justified in declining to consider if the assessee had discontinued his profession once before, long prior to the previous year.
2. Whether there was any evidence to find that the profession discontinued in the previous year was identical to that on which tax had been charged under the Indian Income-tax Act, 1918.
3. Whether relief under Section 25(3) was properly allowed by the Tribunal.

Issue-wise Detailed Analysis:

1. Justification in Declining to Consider Previous Discontinuance:
The Tribunal refused to consider whether the assessee had discontinued his profession before the previous year, as this point was not raised before the Income-tax Officer or the Appellate Assistant Commissioner. The Tribunal's discretion was exercised judicially and not arbitrarily. The Tribunal considered that the point was within the knowledge of the Income-tax authorities and should have been raised earlier. The Tribunal was not compelled to state a case on this question as it was raised at a very late stage without prior evidence to support it. The Tribunal's refusal was not arbitrary, and the High Court would not interfere with such discretion unless it was exercised on improper materials.

2. Evidence of Identical Profession Discontinuance:
The Tribunal found no evidence to support that the profession discontinued in the previous year was identical to the one on which tax had been charged under the Indian Income-tax Act, 1918. This point was also not raised before the lower authorities. The Tribunal's refusal to entertain this new point and call additional evidence was justified under Rule 29 of the Appellate Tribunal Rules, 1946, which limits the power to admit additional evidence. The Tribunal acted within its discretion, and the High Court would not compel the Tribunal to state a case on this question.

3. Relief under Section 25(3):
The Tribunal concluded that the assessee had discontinued his practice when he was imprisoned in 1941 and was entitled to relief under Section 25(3) of the Indian Income-tax Act. The Tribunal considered the state of mind of the assessee, who had dismissed his clerk and given up his chambers, indicating a discontinuance rather than a suspension of practice. The Tribunal's finding was based on the facts and was not challenged as arbitrary or incorrect. The High Court affirmed that the Tribunal did not misdirect itself and answered the question in the affirmative.

Conclusion:
The High Court upheld the Tribunal's decision, agreeing that the Tribunal exercised its discretion judicially and correctly concluded that the assessee had discontinued his profession, thus entitling him to relief under Section 25(3). The Tribunal's refusal to consider new points and additional evidence was justified, and the High Court would not interfere with such discretion. The assessee was awarded costs for the reference, certified for two counsel.