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TMI Blog1975 (9) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... things, that the view of the Appellate Assistant Commissioner in relation to the deduction of the self-assessment tax was right. The department failed to persuade the Tribunal to refer the three following questions to this court: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that by the levy of interest under section 139 of the Income-tax-Act, 1961, the Income-tax Officer must be deemed to have granted time up to the date of filing the return of income ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that even if the return was treated as filed under section 139(4) penalty was not leviable ? 3. Whether, on the facts and in the circumstances of the case, the penalty leviable within the meaning of section 271(1)(a) shall be with reference to the net tax remaining due and payable at the date of final assessment after deduction of the tax paid under section 140A/141?" Hence, this case at the instance of the revenue. The facts are clear. The order of the Tribunal in appeal was passed on January 22, 1973. It rejected the application of the revenue un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplitude of a reference contemplated under section 256. Sub-section (1) enables the assessee or the Commissioner to seek before the Tribunal to refer to the High Court any question of law arising out of its order. It is thus clear that the question of law which could be referred to the High Court under section 256(1) is a question arising out of the Tribunal's order and not one which may otherwise arise. The questions of law referred to in sub-section (2) are co-extensive with the questions of law contemplated under sub-section (1). The first portion of sub-section (2) makes this clear. If the Tribunal refuses to state the case on the ground that no question of law arises, then liberty is given to the assessee or to the Commissioner to approach the High Court to require the Tribunal to refer the questions to it. The expression "question of law" used in sub-section (2) can only be identical with the "question of law" postulated under sub-section (1). If questions other than those sought to be referred under sub-section (1) are also postulated by sub-section (2), the first part of sub-section (2) would become meaningless. That sub-section comes into play only when the Tribunal refuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the year. The contention of the department was that for the purpose of assessment the rates applicable to the fictional turnover for the assessment year were those in force in the year 1948-49. The assessee took the stand that since he had opted for the turnover of the previous year, the rates applicable to the turnover would be crystallised on the first day of the year of assessment and any modification since the commencement of the year in the rates would be inapplicable. Following its earlier decision in Modi Food Products Ltd. v. Commissioner of Sales Tax [1955] 6 STC 287 (All), which was upheld by the Supreme Court in Commissioner of Sales Tax v. Modi Sugar Mills Ltd. [1961] 12 STC 182 (SC), the Judge (Revisions) Sales Tax upheld the contention of the assessee. The Sales Tax Commissioner carried the matter in appeal to the Supreme Court. The Supreme Court held that but for the amendment the question would have to be answered as it was answered by the High Court. The legislature, however, amended the Act with retrospective effect which took in the assessment year as well, though the actual amendment was in the year 1963. Since the question had to be answered by the court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion." Shah J. (as he then was) pointed out that in Chatturam Horilram Ltd.'s case [1955] 27 ITR 709 (SC) it was argued that when the High Court answered the earlier reference which negatived the claim of the revenue to assess the assessee, Bihar Regulation IV of 1942 had in fact been enacted and if the High Court had applied that Regulation, the result would have been different and in meeting that argument the court observed that it was doubtful if the High Court had jurisdiction to take into consideration the subsequent legislation for answering a question other than the one which was actually raised. Having pointed this out, Shah J. (as he then was), proceeded to state-See [1964] 15 STC 656, 663 (SC): " The doubt expressed was therefore in respect of the power of the court to decide a question other than the question which was actually referred and not in respect of the power and indeed the duty of the High Court to apply to the question referred the law enacted with retroactive operation." We would like to emphasise the words "the duty of the High Court to apply to the question referred". It is, therefore, patent that what the Supreme Court decided in Commissioner of Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it should have had an occasion to consider them, so that it may decide whether is should refer it for the decision of the High Court. The Supreme Court further held in the same case that under section 66(2) of the 1922 Act (corresponding to section 256(2) of the present Act) the court cannot direct the Tribunal to refer a question uness it is one which arises out of the order of the Tribunal and was specified by the applicant in his application under section 66(1). When a question of law is neither raised before the 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. This last observation is quite apposite. The question of law based on the amendment was neither raised before the Tribunal nor considered by it nor was it raised in an application under section 256(1), nor in the case filed before the High Court under section 256(2). This is developed only at the time of the arguments of the case. For this reason also, we cannot require the Tribunal to refer the questions. From the foregoing discussion it emerges that the Tribunal cannot be directed to state a case and frame a question in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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