1972 (1) TMI 26 - HC - Income Tax

Applications under section 66(2) of the Indian Income-tax Act, 1922, were filed by the Commissioner of Income-tax, Rajasthan, in this court on January 18, 1966, and March 30, 1966, respectively, against His Highness Maharaja Shri Sawai Man Singh of Jaipur. During the pendency of the applications the respondent died on June 24, 1970 held that a pending reference under s. 66(1) does not abate on the assessee s death

Summary

Issues:
Application of section 141 of the Code of Civil Procedure to applications under section 66(2) of the Indian Income-tax Act, 1922, and the abatement of applications after the death of a party.

Analysis:
The judgment of the High Court of Rajasthan, delivered by JAGAT NARAYAN C.J., pertained to applications under section 66(2) of the Indian Income-tax Act, 1922, filed by the Commissioner of Income-tax, Rajasthan, against a deceased party. The successor of the deceased party objected to the substitution, arguing that the applications had abated. The key contention was whether applications under section 66(2) are original civil proceedings within the scope of section 141 of the Code of Civil Procedure. The court examined precedents and observed that section 141 applies to proceedings similar to suits and appeals, excluding certain types of proceedings such as executions. Notably, the court referenced a Supreme Court observation suggesting that the term 'civil proceeding' in section 141 is not limited to original proceedings.

Furthermore, the court considered the applicability of Order 22 of the Civil Procedure Code to such applications. It was noted that Order 22 explicitly applies to suits and appeals, and most High Courts interpreted section 141 to apply only to proceedings akin to suits. The court emphasized that pending references under section 66(1) of the Income-tax Act do not abate, citing various decisions supporting this stance. The court highlighted that the absence of provisions from the Income-tax Act or its Rules, coupled with the non-application of Order 22, precludes the abatement of references due to a party's death.

Moreover, the court underscored that a reference under section 66 involves advisory jurisdiction rather than original or appellate jurisdiction. Drawing parallels to a similar case under the Bihar Sales Tax Act, the court concluded that applications under section 66(2) are not civil proceedings under section 141, thereby rendering Order 22 inapplicable and ruling against the abatement of the applications. The court allowed the substitution of the deceased party with their successor, emphasizing the consultative nature of the High Court's jurisdiction in such matters.

In summary, the judgment elucidated the interpretation of section 141 of the Code of Civil Procedure in the context of applications under section 66(2) of the Income-tax Act, emphasizing the non-abatement of references and the consultative nature of the court's jurisdiction in such matters. The ruling clarified that such applications do not constitute civil proceedings under section 141, thereby precluding the application of Order 22 and rejecting the abatement of applications due to the death of a party.