1969 (7) TMI 26 - HC - Income Tax

Reference to HC - additional grounds of appeal - dismissal of application to raise additional grounds by the Tribunal - whether such dismissal can be made subject matter of reference to HC - Held, no

Summary

Issues Involved:

1. Competence of the Tribunal to entertain an application under section 66(1) of the Indian Income-tax Act, 1922, in respect of an interlocutory order.
2. Judicial exercise of discretion by the Tribunal in not allowing the applicant's petition for raising additional grounds.
3. Error by the Tribunal in summarily dismissing the appeal.

Issue-wise Detailed Analysis:

1. Competence of the Tribunal to entertain an application under section 66(1) of the Indian Income-tax Act, 1922, in respect of an interlocutory order:

The court examined whether the Tribunal's order dated 22nd July 1964, which was an interlocutory order, could be the subject of an application under section 66(1) of the Indian Income-tax Act, 1922. The court noted that sub-section (4) of section 33 of the Act provides the Tribunal with the authority to pass orders after hearing both parties to the appeal. The court emphasized that the order of the Tribunal must be related to the grounds of appeal taken either in the memorandum of appeal or as additional grounds subsequently allowed by the Tribunal. The court referred to the Supreme Court's decision in Hukumchand Mills Ltd. v. Commissioner of Income-tax, which clarified that the word "thereon" in section 33(4) restricts the jurisdiction of the Tribunal to the subject-matter of the appeal. The court concluded that since the additional grounds did not form part of the subject-matter of the appeal, the Tribunal's order refusing to entertain them was not an order made under section 33(4), and thus, no reference to the High Court against that order was permissible. Consequently, the court answered the first question in the negative, stating that the Tribunal was not competent to entertain any application under section 66(1) with respect to the Tribunal's order of 22nd July 1964.

2. Judicial exercise of discretion by the Tribunal in not allowing the applicant's petition for raising additional grounds:

Given the court's answer to the first issue, it found no necessity to address whether the Tribunal exercised its discretion judicially in not allowing the applicant's petition for raising additional grounds. The court's decision on the first issue rendered the second question moot.

3. Error by the Tribunal in summarily dismissing the appeal:

Similarly, the court did not find it necessary to address whether the Tribunal erred in summarily dismissing the appeal, as the resolution of the first issue negated the need to consider this question. The court's determination that the Tribunal's interlocutory order was not subject to an application under section 66(1) effectively resolved the matter.

Conclusion:

The court concluded that the Tribunal was not competent to entertain an application under section 66(1) of the Indian Income-tax Act, 1922, with respect to its interlocutory order dated 22nd July 1964. Consequently, the other questions did not require answers. The applicant was directed to pay the costs of the reference to the respondent.