1969 (2) TMI 12 - SC - Income Tax

High Court is not a Court of appeal in a reference u/s. 66 of the Act and it is not open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate Tribunal - assessment made u/s. 34(1)(a) of the IT Act was justified in law - Revenue s appeal allowed

Summary

Issues:
Assessment under section 34(1)(a) of the Income-tax Act, validity of the assessment made under section 34(1)(a), jurisdiction of the High Court under section 66(1) of the Act, non-disclosure of material facts, interference with the findings of fact by the High Court in a reference under section 66.

Analysis:
The case involved an appeal brought by the Commissioner of Income-tax challenging the judgment of the Calcutta High Court regarding the assessment made under section 34(1)(a) of the Income-tax Act. The assessee, a minor at the relevant time, had income from investments and a partnership share. The Income-tax Officer initially assessed the interest income in the hands of the father, which was later found to be incorrect by the High Court. Subsequently, the Income-tax Officer initiated proceedings under section 34 to assess the income in the hands of the assessee after he had attained majority. The Appellate Assistant Commissioner upheld the assessment, leading to an appeal by the assessee to the Tribunal. The Tribunal held that the assessee had not disclosed the income at the proper time, justifying the application of section 34(1)(a) of the Act.

The Appellate Tribunal referred a question of law to the High Court under section 66(1) regarding the validity of the assessment made under section 34(1)(a). The High Court, in its judgment, concluded that there was no non-disclosure of material facts by the assessee and ruled in favor of the assessee. However, the Supreme Court found that the High Court had exceeded its jurisdiction by reevaluating the evidence and interfering with the findings of fact made by the Tribunal. The Supreme Court emphasized that in a reference under section 66, the High Court must accept the findings of fact by the Tribunal unless a specific question challenging those findings is raised under section 66(1).

The Supreme Court held that the High Court erred in its approach and set aside its judgment. The Court emphasized that the High Court is not a court of appeal in a reference under section 66 and should confine itself to the facts found by the Tribunal. Without a specific challenge to the findings of fact under section 66(1), the High Court cannot reassess the evidence. Therefore, the Supreme Court allowed the appeal, setting aside the High Court's judgment, and answered the question referred by the Appellate Tribunal in the affirmative and against the assessee.