1967 (9) TMI 32 - HC - Income Tax

Obligation on HC - There is no obligation upon the High Court to decide the question of law if the party, at whose instance the reference has been made, is absent when the case is called on for hearing

Summary

Issues:
1. Obligation of the High Court to decide questions of law in the absence of the assessee or their counsel during a reference under Section 66(1) of the Income-tax Act, 1922.

Detailed Analysis:
The judgment pertains to a reference made under Section 66(1) of the Income-tax Act, 1922, where the assessee was represented by counsel initially, but the counsel ceased to practice in the court. The court provided an opportunity for the assessee to engage another counsel, but the assessee and any representative were absent during the hearing. The primary issue raised was whether the High Court is obligated to consider and decide on the questions of law referred to it in the absence of the assessee or their counsel.

The court examined the provisions of Section 66(1) and (5) of the Income-tax Act, which mandate the High Court to decide on the questions of law raised during the reference. However, upon further analysis, the court deliberated on whether it is necessary for the High Court to proceed with deciding the questions of law when the party at whose instance the reference was made is absent during the hearing. The court highlighted that the party seeking the reference has the right to apply for it, and the proceeding moves from the Tribunal to the High Court based on the party's application.

The court referred to precedents from other High Courts, such as the Calcutta High Court, the Travancore-Cochin High Court, the Madras High Court, and the Andhra Pradesh High Court, where it was held that the High Court has discretion to decide on the question of law if the party causing the reference is absent during the hearing. The court also mentioned a contrary observation by the Calcutta High Court in a specific case concerning the principle that once a case is referred to the High Court, it is bound to answer the question, irrespective of the parties' presence.

Ultimately, the court concluded that there is no absolute obligation on the High Court to decide on the question of law if the party causing the reference is absent during the hearing. Citing the view taken in previous cases, the court held that it could decline to answer the question referred in such circumstances. Consequently, the court decided not to return any answer to the question referred and directed the reference to be returned to the Income-tax Appellate Tribunal, with no order as to costs.