1970 (11) TMI 23 - HC - Wealth-tax

Draft of the statement of case indicating questions to be referred, placed before parties for their suggestion, by tribunal - held that it does not amount to final decision on question to be referred - whether application can be made to High Court to direct reference of further questions before reference is filed in court - No

Issues Involved:
1. Procedure for the Income-tax Appellate Tribunal to make a reference to the High Court.
2. Finality of the Tribunal's decision on which questions to refer.
3. Timing and process for aggrieved parties to contest the Tribunal's decision.
4. Prematurity of the Commissioner's application.

Detailed Analysis:

1. Procedure for the Income-tax Appellate Tribunal to Make a Reference to the High Court:
The judgment addresses the procedure to be followed by the Income-tax Appellate Tribunal in making a reference to the High Court under the Wealth-tax Act or similar statutes. The Tribunal initially hears both the assessee and the department on whether a question of law arises from the Tribunal's decision. If the Tribunal concludes a question of law does arise, it passes an order termed "statement of case--draft for the table." This draft statement is then shown to both parties for suggestions on factual aspects before finalization.

2. Finality of the Tribunal's Decision on Which Questions to Refer:
The Tribunal in this case decided to refer only one of the three questions proposed by the department, treating its initial decision on October 17, 1969, as final. The Tribunal held that its decision to reject certain questions of law was final and could not be altered, as this would amount to reconsideration or review, which is not authorized under the law. The finalized statement of the case only includes the facts relevant to the agreed-upon question of law.

3. Timing and Process for Aggrieved Parties to Contest the Tribunal's Decision:
The Supreme Court in Commissioner of Income-tax v. Mcleod & Co. clarified that an aggrieved party must wait until the statement of the case is filed in court to contest the Tribunal's decision. At that time, the party can make an application by way of notice of motion to argue that further facts or questions of law should be included. This practice ensures that the aggrieved party is fully aware of the exact question and statement of the case finalized by the Tribunal before seeking further directions from the High Court.

4. Prematurity of the Commissioner's Application:
The Commissioner's application was filed on March 12, 1970, before the reference was actually filed in the High Court and before the department was served with notice of the filing. The judgment concludes that such an application is premature based on the Supreme Court's guidance in Mcleod & Co.'s case, which states that the period of limitation for making an application to the High Court starts only when the party is served with notice of the filing of the reference. The application should be made within the prescribed period of limitation after this notice.

Conclusion:
The application by the Commissioner is dismissed as premature. The judgment clarifies that no stage of the reference application prior to the actual filing in the High Court is final and conclusive. The Tribunal's earlier decision on October 17, 1969, was not final, and the department could re-agitate its request for referring additional questions. The practice to be followed by the Tribunal and the timing for aggrieved parties to contest the Tribunal's decisions have been elucidated to avoid future procedural misunderstandings. There will be no order as to costs, and a copy of the judgment will be forwarded to the Appellate Tribunal.

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