1947 (4) TMI 16 - HC - Income Tax

Summary

Issues:
1. Refusal of the Tribunal to refer questions of law to the High Court under Section 66 (2) of the Indian Income-tax Act.
2. Interpretation of the phrase "question of law arising out of such order" under Section 66 (1) of the Act.

Analysis:
The case involved a petition under Section 66 (2) of the Indian Income-tax Act, requesting the High Court to direct the Income-tax Appellate Tribunal to refer specific questions to the Court for decision. The questions pertained to the jurisdiction of the Income-tax Officer to give inconsistent findings on the ownership of a business for different assessment years based on the same evidence. The Tribunal declined to refer these questions, stating that they were not raised during the appeal hearing and did not arise from its order. The petitioner then approached the High Court under Section 66 (2) seeking a direction to the Tribunal to refer the questions.

Section 66 (1) of the Act outlines the procedure for referring questions of law to the High Court, emphasizing that the question must arise out of the order of the Appellate Tribunal passed on appeal. The petitioner argued that a question can be said to arise out of the order even if not specifically raised before the Tribunal, as long as it fairly arises from the facts of the case in the order. However, the Court disagreed with this interpretation, holding that a question of law must be considered to arise out of the Tribunal's order only if it was raised before the Tribunal. The Court cited a similar interpretation by the Lahore High Court under the pre-amended Section 66 (2) language.

The Court distinguished the case of Vadilal Lallubhai v. Commissioner of Income-tax, Bombay, stating that it did not apply in the present context. Additionally, reference to the Privy Council decision in M.E. Moola Sons Limited v. Burjorjee was made, highlighting the need to determine the scope of the remedy under Section 66 based on the statutory language. Ultimately, the Court upheld the Tribunal's decision to refuse the reference of questions to the High Court, leading to the dismissal of the petition with costs.

In conclusion, both judges, Patanjali Sastri, J., and Gentle, C.J., concurred with the decision to dismiss the petition, affirming the Tribunal's refusal to refer the questions of law to the High Court under Section 66 (2) of the Indian Income-tax Act.