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TMI Blog1971 (1) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... come received by the minor as his share of profits in the said partnerships. The Income-tax Officer made his order dated the 30th March, 1948, under section 23(3) and closed the case as one of " no income ". He did so because he took the income of each of the three assessees as included in the income of his mother, Sodradevi, under section 16(3)(a)(ii) and assessed Sodradevi accordingly. Sodradevi challenged such inclusion within her income. Ultimately the Supreme Court held that section 16(3)(a)(ii) would apply only to a father and not to a mother and that the inclusion of the shares of income of the 3 minor assessees in the income of Sodradevi was not justified. The necessary proceeding was taken under section 66(5) and such income of each of the three minor assessees was excluded from the assessment of Sodradevi for the relevant assessment year. In order to bring to tax the said incomes of the three minor assessees received by them towards their respective shares in the partnerships, the Income-tax Officer initiated action under section 34(1)(a), obtained the necessary sanction of the Commissioner of Income-tax for taking action under section 34(1)(a) and served the requisite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment could be reopened only under clause (b) of section 34(1). The Tribunal, however, further held that in the matter of the mother's assessment the Tribunal had not given any finding or direction in its order passed under section 66(5), and that, therefore, the time limit of 4 years provided for under the second proviso to section 34(3) was not raised. The Tribunal held that, therefore, the initiation of action under section 34 was bad and illegal. As regards the said third contention urged on behalf of the revenue, the Tribunal held that action was taken only under section 34 and not under section 35 and that, as no action had been taken under section 35, it was futile for the Tribunal to go into the question whether action under section 34 could be justified under section 35. In view of its said findings, the Tribunal upheld the order of the Appellate Assistant Commissioner and cancelled the assessments on the three minor assessees. The revenue thereafter made an application under section 66(1) for a reference being made on the following 3 questions, namely : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees was dealt with separately. So far as this reference is concerned, the material facts and circumstances, as also the points of law relating to the questions falling for our consideration, are identical. The Tribunal has, therefore, made this reference as a single reference and has submitted a single statement of the case. We propose to deal with the cases of all the three minors as a single case and will hereafter proceed as if there was but one assessee, but whatever we say will apply to each of the said three minor assessees. That the return of the assessee was filed by and under the signature of Dwarkadas is not at all disputed nor is it disputed that Dwarkadas was the elder brother of the assessee. Mr. Hajarnavis, the learned counsel appearing on behalf of the revenue, contended that after the death of the assessee's father, his mother, Sodradevi, was the minor's natural guardian according to Hindu law, that Dwarkadas had, therefore, no right or authority to sign and file the return on behalf of the assessee, his minor brother, and that the return filed by Dwarkadas is invalid and must be treated as non-existing. The question referred, however, does not specifically or dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the Tribunal for a reference under section 66(1), the revenue specifically applied that the question No. 1, referred to earlier, be referred under section 66(1), and that question specifically and directly raised a point about the validity of the return as filed by and under the signature of Dwarkadas. The contention covered by that question was sought to be argued before the Tribunal. The Tribunal refused to permit that point being agitated on behalf of the revenue on the ground that it was sought to be argued at the second appellate stage for the first time. The refusal of that permission is, in our opinion, a distinct and clear decision of the Tribunal. It is, however, true, as pointed out by Mr. Hajarnavis and as also appearing from not only the statement of the case but also from the original order of the Tribunal, which dealt with that contention, that the Tribunal, after refusing permission, proceeded to express its opinion on that point. In our opinion, having refused permission, it was no longer necessary for the Tribunal to express any opinion on that point. If in fact it has expressed an opinion it is simply obiter dictum. Even if this point of law can be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application under section 66(1), much less made the subject-matter of an application under section 66(2). It is clear that, unless the ruling of the Tribunal refusing to grant permission is held to be in any way incorrect or wrong, it would not even be open to the revenue to agitate the question as to the invalidity of the return as filed. In this connection, it is not difficult to envisage that the point about invalidity of the return may necessitate investigation of more facts ; for example, but only by way of a hypothetical example, the assessee could have pointed out and proved facts to show that in spite of the mother being the natural guardian, there were reasons which would justify Dwarkadas signing and filing the return on behalf of the minor assessee. Without investigation into facts, it would not be correct to rule out a possibility, may be a mere possibility, that Dwarkadas had at the relevant time been appointed the legal guardian of the minor assessee by some court. To state briefly, the relevant facts not having been investigated, the assessee has not had the chance of adducing evidence on the point. The ruling of the Tribunal refusing permission has not been challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The Supreme Court then reframed question No. 1 and proceeded to answer it. What the Supreme Court, therefore, did was to answer question No. 3 which had in fact been referred and to reframe question No. 1 which also had in fact been referred, but what is to be noticed is that it reframed that question for the reason expressly stated by the Supreme Court itself that it was only by way of a corollary to the answer to question No. 3. In our opinion this is only a further instance of the proposition laid down as noticed earlier in the two cases of Scindia Steam Navigation Co. Ltd. and of Indian Molasses Co. P. Ltd. and it does not in any way militate against or create an exception to what the Supreme Court itself has laid down in the case of Kamlapat. We, therefore, hold that we cannot, and we, therefore, do not, reframe the question as suggested by Mr. Hajarnavis. Now the question referred specifically refers to notice issued under section 34(1)(a). Clause (a) of section 34(1) can apply only when there is an omission or failure on the part of the assessee either to make a return of his income under section 22 or to disclose fully and truly all material facts necessary for his a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition and answer the question on the basis of the position under clause (b). We have already referred to the judgment of the Supreme Court in Kamlapat's case relating to reframing of a question in a reference under section 66. The position, however, in the instant case in connection with this point is materially different from that in respect of proposed question No. 2. In the instant case, both the parties fully argued the position before the Tribunal and the Tribunal gave its decision. A specific question on the point was invited to be referred on behalf of the revenue in its application for reference under section 66(1). It is true that the specific question No. 2 has not been referred by the Tribunal, but in its order made on the application for reference, the Tribunal, unlike as in the case of questions Nos. 1 and 3, has not even referred to question No. 2, much less given any reason for not referring that question. The Tribunal refused to refer questions Nos. 1 and 3 after stating its reasons for doing so. Surely, if question No. 2 also was not intended by the Tribunal to be referred, there would have remained no question whatever out of the questions proposed on behalf o ..... 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