1927 (12) TMI 11 - HC - Income Tax

Summary

Issues:
1. Whether an assessment can be reopened under Section 34 in the absence of accounts when assessments were levied at an agreed figure.
2. Whether the assessee is required to raise all questions of law before the Commissioner for a reference to the High Court.
3. Whether a question of law not raised before the Commissioner can be considered for a reference to the High Court.

Analysis:
1. The assessee requested the Commissioner of Income Tax to refer certain questions of law to the High Court regarding an assessment made by the Income Tax Commissioner. The High Court directed the Income Tax Commissioner to state a case on three points initially, and later, a fourth point was added regarding the reopening of assessments at an agreed figure in the absence of accounts under Section 34. The Commissioner raised a preliminary objection to stating a case on the fourth point, arguing that the question of law was not raised within the specified time frame under Section 66(2) of the Income Tax Act. The High Court held that questions of law must be raised before the Commissioner within the specified time for a reference to the High Court, and the assessee cannot argue a point of law not previously raised before the Commissioner.

2. The High Court emphasized that under Section 66(2) of the Income Tax Act, the assessee must raise all questions of law before the Commissioner within the specified time frame to be considered for a reference to the High Court. Failure to raise a question of law within the specified time renders it inadmissible for consideration in a reference. The court cited precedents from the Allahabad High Court to support the interpretation that only questions of law raised before the Commissioner within the specified time can be considered for a reference to the High Court. Therefore, the assessee is bound to raise all questions of law relied upon within the specified time frame to seek a reference to the High Court.

3. The Commissioner's preliminary objection to a reference on the fourth question was upheld by the High Court due to the assessee's failure to raise the question of law within the specified time frame before the Commissioner. As the assessee did not intend to argue the other three questions referred, the High Court ordered the assessee to pay the costs of the Commissioner, fixed at Rs. 250. The judgment highlights the importance of timely raising all questions of law before the Commissioner for consideration in a reference to the High Court, as per the provisions of Section 66(2) of the Income Tax Act.