1991 (10) TMI 325 - HC - Income Tax

Summary

Issues:
1. Whether the Tribunal should refer a common question of law to the High Court under section 256(2) of the Income-tax Act, 1961.

Analysis:
The judgment pertains to three applications under section 256(2) of the Income-tax Act, 1961 seeking a direction to the Tribunal to refer a common question of law to the High Court. The applications relate to assessment years 1978-79, 1979-80, and 1980-81. The primary issue is whether a statable question of law arises from the Tribunal's orders, specifically regarding the correctness of confirming the order of the AAC canceling penalties under section 271(1)(c). The Tribunal found no conscious concealment, fraud, or neglect on the part of the appellants, leading to the conclusion that no question of law arises from the factual findings. The Court emphasized that it cannot disturb findings of fact unless expressly challenged in the application under section 256(1).

Furthermore, the judgment discusses the limitations on the Court's power under section 256(2) to direct a reference to the Tribunal. Citing precedents, including CIT v. Scindia Steam Navigation Co. Ltd. and India Cements Ltd. v. CIT, the Court highlighted that the High Court must accept the Tribunal's findings of fact unless expressly challenged in the initial application under section 256(1). The Court clarified that it cannot raise new questions of law not raised in the application under section 256(1) as it only exercises advisory jurisdiction.

Ultimately, the Court dismissed all three applications with costs, emphasizing that on the facts found by the Tribunal, no question of law arises. The judgment underscores the importance of adhering to the prescribed procedures and limitations when seeking references under the Income-tax Act, maintaining the integrity of the appellate process and the distinction between factual findings and legal questions.