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TMI Blog1950 (6) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... The Contract deeds were also executed at Mhow, and the assessee supplied in the accounting years the articles contracted for under these contracts. The bills were submitted at Bairagarh but the cheques in payment for these bills were issued by the Controller of Military Accounts, Meerut, and were drawn on the Reserve Bank of India, Bombay branch. These cheques were sent and were received by the assessee at Bairagarh, and he sent them to the Imperial Bank of India, Bhopal branch, "for collection." After these monies were collected they were credited to the assessee's account with the Imperial Bank of India at Bhopal. The bank charged its usual commission for collection. The vegetables, meat etc. which the assessee was to supply were purchased in Bhopal State though some portions of these articles were purchased in British India and supplied at the Prisoners' Camp. No accounts were produced before the Income-tax Officer, New Delhi. The assessee alleged that he had lost them, and the Income-tax Officer refused to accept the assessment made on the assessee by the Income-tax Officer, Bhopal State, and assessed the tax at 17½ per cent. of the total receipts fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal debtor is concerned, the bond above abstracted is the only promise on his part which is forthcoming. It is quite true that, on failure of any instalment, there is doubtless an implied promise by him to repay the loan. But there is no implied promise to repay it at Secunderabad. Even by British law the duty of a debtor to find and pay his creditor is only imposed upon him when the creditor is within the realm. And the plaintiff has not contended that if there be any such duty at all imposed by Indian law upon a debtor, it extends in this respect further than in England. Accordingly, so far as the principal debtor is concerned, there is no obligation upon him either express or implied to make any payment to the plaintiff at Secunderabad." These observations show that in this case unless there was an express or implied contract to show that the monies were to be paid in Bairagarh no duty was cast upon the debtor to find his creditor and pay him without the realm. I cannot derive much assistance from this case. It was next submitted that the Appellate Tribunal found that in accordance with the terms of the contract payments were to be made at the office of the Reserve Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cheque for him. Then the bank acts as his collecting agent and the money is received by the creditor when the same is collected by the bank. So in this case if the facts are that the assessee handed over the cheques and hundis for collection to the banks……and the banks…….acted merely as collecting agents and realised the cheques and huadis from the banks or shroffs in British India, then the payment is in British India and not in the Baroda State. On the other hand, if the creditor treated the cheques and hundis as negotiable instruments and cashed them as such with the banks or shroffs, then the payment was received by the assessee in the Baroda State, they having negotiated the cheques and hundis." With this statement of the law I most respectfully agree. Grant on Banking, 1924 Edn., at page 52, has said that the character in which a bank receives payment of a cheque is a question of fact, and at page 53 it is said that in order to get protection under Section 82 of the Negotiable Instruments Act, the cheque should be received for collection, and in that case even if a customer is allowed to draw against the cheques so given the bank will be pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question raised thereby. This section does not, in my opinion, authorise the High Court to go into the question whether the findings which have been arrived at are or are not supported by evidence. No doubt, if they are not so support-edit is open to the assessee or to the Income-tax Department to get a reference made to the High Court but the provisions of this sub-section come into play only when the High Court feels the necessity of a supplemental statement in order to answer the question referred. Two cases were relied on by Sir Noshirwan Engineer in support of his submission, Govindram Bros., Ltd. v. Commissioner of Income-tax, Central, Bombay [1946] 14 ITR 764 and Keshav Mills Co. Ltd. v. Commissioner of Income-tax, Bombay [1950] 18 ITR 407; Bom. LR 72. In the first case the High Court had found that in the statement of the case made by the Appellate Tribunal there were inconsistencies and it was, therefore, sent back for a supplemental statement, and when it came back Kania, J., as he then was, delivering the judgment of the Court said :- "The question whether the business is the same under Section 24(2) is a question of fact. It is a conclusion to be drawn from var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerji v. Commissioner of Income-tax [1947] 15 ITR 98 , it was held that the High Court is bound by the statement of facts and has no jurisdiction to reopen these facts. At page 104 it was observed :- "We are bound to accept the facts given us by the Tribunal and we have no jurisdiction to reopen those facts and to entertain conclusions of fact differing from those of the Tribunal itself." In Commissioner of Income-tax, C.P. & U.P. v. Shri Dwarka Dheesh Temple, Cawnpore [1946] 14 ITR 440, it was held that under Section 66 the Court has no jurisdiction either to go behind or to question statements of fact made by the Appellate Tribunal in the statement of the case submitted by it to the High Court. At page 446 it was said :- "We have been pressed hard by Mr. Pathak to go behind the statement of facts set out in the statement of the case by the Appellate Tribunal. The suggestion is that if we were to do this, we might find other facts which might or might not shake the conclusions of fact stated to us. As a matter of principle we do not think that any jurisdiction is entrusted to us by Section 66 of the Income-tax Act, either to go behind or to question statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the first time their Lordships said at page 53 that any claim as to liability to tax based on that argument was a matter outside the letter of reference and was irrelevant to the question submitted. So also in Rajendra Narayan v. Commissioner of Income-tax, Bihar & Orissa [1940] 8 ITR 495 ; AIR 1940 PC 158, where their Lordships said that the function of the High Court in cases referred to it under Section 66 is merely advisory and is confined to considering and answering the actual question referred to it. In Commissioner of Income-tax, Bengal v. Shaw Wallace & Co. [1932] 59 Cal. 1343; AIR 1932 PC 138, where the question had not been framed properly and the High Court had recognised it in order to make it more precise it was held by their Lordships that this was not objectionable. In Commissioner of Income-tax v. Sarangpur Cotton Manufacturing Co., Ltd. [1938] 6 ITR 36 ; ILR 1938 Bom. 239, a reference had been made by the Commissioner under sub-section (3) of Section 66 on a question formulated by the High Court. The Commissioner in the statement of case drawn up by him suggested the substitution of another question, and the High Court without remanding the case amended the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the words of their Lordships of the Privy Council before we seek to entertain any such question we must see that the preliminary requirements of the section are strictly complied with, and again in the words of their Lordships of the Privy Council "the stringency of these requirements" (of the provisions of Section 66 of the Income-tax Act) is clearly deliberate. It is the intention of the enactment that the High Court is not to be flooded with such applications. The object is salutary and before we entertain any question under the section we must see that the preliminary statutory conditions have been fully observed : [See Trustees Corporation ( India), Ltd. v. Commissioner of Income-tax [1930] AIR 1930 PC 151]. I am, therefore, unable to give effect to the submission of the learned counsel for the assessee that we must send back the case for a supplemental statement. On the statement of the case as sent up by the Appellate Tribunal it seems clear that there was a term in the contract that the payment would be made to the assessee at the office of the Reserve Bank of India, Bombay. But even if this condition was not there the fact that the cheques were issued by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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