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Issues Involved:
1. Jurisdiction of the Court under Section 66(3) to require the Commissioner to state a case for a further question of law. 2. Validity of assessment under Section 34 for sources of income already assessed. Issue-wise Detailed Analysis: 1. Jurisdiction of the Court under Section 66(3) to require the Commissioner to state a case for a further question of law: The Court examined whether it had jurisdiction under Section 66(3) of the Income-tax Act to require the Commissioner to state a case in respect of a further question of law that appeared to have arisen during the assessment. The relevant statutory provisions were Section 66(2) and (3). Section 66(2) allows an assessee to require the Commissioner to refer a question of law to the High Court, while Section 66(3) permits the assessee to apply to the High Court if the Commissioner refuses to state the case. The Court noted a conflict of opinions among various High Courts in India regarding this issue. Some High Courts, including Rangoon, Madras, Lahore, and Allahabad, held that the Court had no such power, while others, including a different bench of the Allahabad High Court and the Bombay High Court, held the contrary view. The Court concluded that it had no jurisdiction to order the Commissioner to state a case for any question of law that the assessee had not duly required the Commissioner to refer under Section 66(2). The Court emphasized that the scheme of Section 66 was to provide a specific and adequate legal remedy for obtaining a reference by way of a case stated, and the High Court's jurisdiction under this section was of an exceptional nature. The Court referred to the observations of Lord Macmillan in Commissioner of Income-tax, Bihar and Orissa v. Maharajahdhiraja of Darbhanga, which supported the view that the High Court should only decide questions of law formally stated by the Commissioner. The Court also highlighted the stringent requirements of Section 66, as emphasized by the Privy Council in Trustees Corporation (India) Ltd. v. Commissioner of Income-tax, Bombay Presidency, to prevent the High Court from being flooded with applications. 2. Validity of assessment under Section 34 for sources of income already assessed: The Court declined to answer the second question regarding the validity of assessment under Section 34 for sources of income already assessed. This decision was based on the conclusion that the Court had no jurisdiction to require the Commissioner to state a case for any question of law not duly raised before the Commissioner under Section 66(2). Conclusion: For the above reasons, the Court answered the first question in the negative and declined to give an answer to the second question. The judgment was agreed upon by all three judges, Page, Das, and Sen, JJ.
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