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TMI Blog1985 (3) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... t the reassessment proceedings under the orders of the AAC may be stayed pending disposal of the reference in this court. A preliminary objection has been raised by Shri Bharatji Agarwal, senior standing counsel appearing for the Revenue, regarding the maintainability of this application. It has been urged that this court while hearing a reference under s. 27 of the Act acts only in an advisory jurisdiction and, consequently, the prayer contained in this application cannot be allowed. According to him, while hearing a reference under s. 27 of the Act, this court cannot as an interim measure issue an order either of stay or of injunction. Shri R. K. Gulati, appearing for the assessee-applicant, has, however, urged in reply to the said preliminary objection that even though s. 27 of the Act does not specifically confer any power on this court to pass an interim order such as prayed for in the present application, this court being a court has an inherent power to grant the relief prayed for. In the alternative, it has been urged that the prayer contained in this application can be granted even under art. 227 of the Constitution. We shall first consider the nature of the jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, as the case may be. Now, we come to the submission made by the counsel for the assessee applicant that this court even while hearing a reference under s. 27 of the Act has jurisdiction to pass an interim order such as is prayed for in the present application under its inherent power. While dealing with this submission, it may be pointed out that there are three stages which are relevant to be taken into consideration while dealing with the question of inherent powers of this court : (1) whether the court has any inherent power while hearing a reference under s. 27 of the Act; (2) if it has inherent power, what is its extent and scope; and (3) even if the prayer contained in an application for an interim order comes within the purview of the inherent power, whether a case on merits has been made out for involving the inherent power. As regards the first question, we are clear in our mind particularly in view of the decision of the Supreme Court in Jaipur Mineral Development Syndicate v. CIT [1977] 106 ITR 653 that this court, even while hearing reference under a taxing statute, has inherent power. That was a case where upon a reference being made to the High Court at the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercises as a court in various proceedings would be relevant for determining the extent and scope of the inherent power which this court may exercise in its respective jurisdictions. Certain cases have been cited by counsel for the parties dealing with the extent and scope of the inherent power of a court while hearing an appeal or a revision. We, however, do not find it necessary to refer to all those cases. Even so, reference may be made to a few of them to appreciate the reason why some orders which a court exercising appellate or revisional jurisdiction may pass in its inherent power cannot be passed by this court while hearing a reference under s. 27 of the Act in its advisory jurisdiction. In ITO v. Mohammed Kunhi [1969] 71 ITR 815, while dealing with the power of the Income-tax Appellate Tribunal under s. 255(5) of the I.T. Act, 1961, it was held (at p. 822): "Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion, the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssly provided under the Act, it is ancillary and incidental to the appellate powers of the Tribunal. This decision of the Kerala High Court has since been affirmed by the Supreme Court in appeal [1969] 71 ITR 815. Such a power to make interim order will be more readily inferred in a case where the jurisdiction to make order has been worded in such wide language as in section 7F of the Act." Such is obviously not the power vested in this court while hearing reference under s. 27 of the Act in view of the nature of the jurisdiction which this court exercises under the said section as already indicated above. And it is in this view of the matter that we are of the opinion that the extent and scope of the inherent power which can be exercised by an appellate or revisional court cannot be the same as the extent and scope of the inherent power of this court while exercising not an appellate or revisional jurisdiction but only an advisory jurisdiction such as is conferred by s. 27 of the Act. In our opinion, in the very nature of things, the inherent power which this court can exercise while hearing a reference under s. 27 of the Act is to be confined to, (1) the procedure about the hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax [1965] 56 ITR 365 (SC), be restricted to the evidence on the record and may not be entitled to take additional evidence. That may result in injustice. In the circumstances, we think it appropriate to decline to answer the question on the ground that the Tribunal has failed to consider and decide the question whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the company, and has not considered all appropriate provisions of the statute applicable thereto. It will be open to the Tribunal to dispose of the appeal under section 66(5) of the Income-tax Act, 1922, in the light of the observations made by this court after determining the questions which ought to have been decided." In CIT v. George Henderson Co. Ltd. [1967] 66 ITR 622 (SC), it was held by the Supreme Court that even though the court was bound to proceed normally on the findings of fact which were mentioned in the statement of the case, if the statement of the case does not correctly summarise or interpret the finding recorded in the order of the Appellate Tribunal which had been made part of the case, the court was entitled to look at the order itself in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir authority and not for correcting mere errors. The same view was taken by the Supreme Court in Nagendra Nath Bora v. Commissioner of Hills Division, AIR 1958 SC 398, where it was held that under article 227, the power of interference is limited to seeing that the Tribunal functions within the limits of its authority. In Shaikh Md. Umarsaheb v. Kadalaskar, AIR 1970 SC 61, it was held that the High Court's power of superintendence under article 227 of the Constitution is confined to seeing that the trial court had not transgressed the limits imposed by the Act. In view of the scope of the power which may be exercised by this court under article 227 of the Constitution, we are of the opinion that it would not be a proper exercise of discretion to direct the WTO not to pass a fresh order of assessment when in pursuance of the order of remand passed by the AAC and affirmed by the Appellate Tribunal, he is under an obligation to pass such an order. Counsel for the assessee-applicant then placed reliance on ITO v. Mohammed Kunhi [1969] 71 ITR 815 (SC) and has urged that the Supreme Court has in this case approved the decision of the Andhra Pradesh High Court in Polisetti Narayan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above, we find it difficult to agree with this view. Lastly, reliance has been placed by counsel for the assessee-applicant on a decision of the Delhi High Court in Bansi Dhar Sons v. CIT [1978] 111 ITR 330. In that case, the Delhi High Court has simply followed the decision of the Andhra Pradesh High Court in the case of Polisetti Narayana Rao [1956] 29 ITR 222. For the same reason for which we have found it difficult to agree with the view taken by the Andhra Pradesh High Court in the case of Polisetti Narayana Rao, we are unable to agree with this decision either. The view which we take finds support from the decision of a Division Bench of the Calcutta High Court in Dwarka Prasad Bajaj. v. CIT [1980] 126 ITR 219 (Cal). In this case, it was held (p. 230) : " After due consideration of the submissions made on behalf of the parties as also those of Mr. Ginwalla as amicus curiae and the decisions on the issue, the law on the point appears to us to be as follows: (a) It is well settled that a court and in particular this court in exercising its jurisdiction as a " court " has certain inherent powers. (b) Such inherent powers are complementary to the powers which are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to that court ourselves. We are not able to accept this contention in the circumstances of this case. The application to the High Court for leave to appeal was filed on September 23, 1950, and leave was granted on July 18, 1952. The decree of the trial court after remand was passed, in between, on December 4, 1951. The decree must, in the circumstances, be taken to be subject to the result of this appeal. In our opinion, this case falls within the principle recognised by the Privy Council in Shama Purshad v. Hurro Purshad [1865] 10 MIA 203 (PC), and not that in Nanganna Naidu v. Venkatapayya, AIR 1923 PC 167." Even though it is true that the order of the Tribunal affirming the order of remand passed by the AAC is not in appeal before this court, it is settled law that if the answer to the questions referred to us by the Tribunal in the instant reference goes in favour of the assessee, the Income-tax Appellate Tribunal will have to decide the appeal before it in pursuance of and in the light of the answers given by this court. On the same principle as laid down by the Supreme Court in the case of Gurdwara Parbhandhak Committee, AIR 1955 SC 576, any decision by the WTO in pursu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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