9911796707
TMI Blog1966 (4) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... on 66 of the above Act for a direction to the Commissioner of Income-tax to refer the following question to this court : " Whether, on the facts and in the circumstances of the case, the income in question of the assessee could have been taxed under the Patiala Income-tax Act (No. VIII of Samvat 2001), in the face of the Part B States Taxation Concessions) Order, 1950 ? " This order would dispose of the reference as well as the application. The assessee was till 15th August, 1947, Ruler of Faridkot State under the suzerainty of the British Crown. On 15th August, 1947, India became independent. By a covenant dated 5th May, 1948, the assessee along with the Rulers of certain other States entered into a covenant whereby the Patiala and East Punjab States Union (PEPSU) was formed. The actual Union came into existence on 20th August, 1948. The assessment year is Samvat 2006, i.e., 13th April, 1949, to 12th April, 1950, and the relevant previous year is Samvat 2005 which corresponds to 13th April, 1948, to 12th April, 1949. The assessee derived income from interest on Government securities, property and other sources. Part of the income was from sources within the Faridkot State an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application under section 66(3) of the Act filed by the assessee. The Commissioner of Income-tax refused to refer the question mentioned in the application to this court on the ground that this question was neither raised before the Commissioner nor it was considered by him in his order. After hearing Mr. Puri on behalf of the petitioner and Mr. Awasthy on behalf of the department, we are of the view that no direction should be issued for referring the question to this court. The law on the point has been laid down by their Lordships of the Supreme Court in the case of Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd., wherein Venkatarama Aiyar J., who spoke for the majority, observed : " The jurisdiction of a court in a reference under section 66 is a special one, different from its ordinary jurisdiction as a civil court. The High Court, hearing a reference under that section, does not exercise any appellate or revisional or supervisory jurisdiction over the Tribunal. It acts purely in an advisory capacity, on a reference which properly comes before it under section 66(1) and (2). It gives the Tribunal advice, but ultimately it is for them to give effect to that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it. Stating the position compendiously, it is only a question that has been raised before or decided by the Tribunal that could be held to arise out of its order. " Finally it was observed : " Section 66(1) speaks of a question of law that arises out of the order of the Tribunal. Now a question of law might be a simple one, having its impact at one point, or it may be a complex one, trenching over an area with approaches leading to different points therein. Such a question might involve more than one aspect, requiring to be tackled from different standpoints. All that section 66(1) requires is that the question of law which is referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It will be an over-refinement of the position to hold that each aspect of a quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he headnote in this regard reads as under : " When the new State of Pepsu was formed on August 20, 1948, in accordance with the covenant entered into by the Rulers of the merging States on May 5, 1948, the eight States which had merged into it ceased to exist as independent personae and there could be no question thereafter of sovereignty of such States or of its ex-Rulers. On the wording of the covenant there was a complete divestiture of all the sovereign rights of the Rulers, when the new State came into existence on August 20, 1948, and the Rulers cannot be said to have had any authority to enter into any supplementary covenant on April 9, 1949. " In view of the above decision, the contention advanced on behalf of the assessee that he retained his sovereignty after the formation of Pepsu cannot be accepted. Reference has been made on behalf of the assessee to the order of the Assistant Commissioner of Income-tax regarding his status as a sovereign but in this respect we are of the opinion that the correct position must be taken to be that stated by their Lordships of the Supreme Court in the case of Lachhman Dass. The question of liability to income-tax of the Rulers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
