1. A firm by the name of Gokaldas Dayalji was assessed to tax as an unregistered firm and Gokaldas, the fourth respondent before us, appealed to the Appellate Assistant Commissioner contending that the assessment should have been on himself as an individual and not on the firm, the contention being based on his allegation that the firm was a proprietary firm and not a partnership firm. The appeal preferred by Gokaldas was dismissed. On the 3rd of March, `48, the property of the petitioner was attached, it appearing that the petitioner was shown as a partner along with Gokaldas and others in a partnership deed which constituted the firm, and , the Income-tax authorities were proceeding against the petitioner as a partner in that firm. The petitioner thereupon preferred an appeal to the Tribunal denying his ability to be assessed and contending that he was not a partner in the firm. The Tribunal considered the preliminary question whether the appeal of the petitioner was competent and held in his favour. On merits the Tribunal held that the petitioner was not a partner. The Commissioner then made an application for a reference to this Court and the question of law as suggested was whether there was any evidence before the Tribunal to hold that the petitioner was not a partner. That application of the Commissioner was rejected. Then Gokaldas, the fourth respondent, applied for a reference to the Tribunal to refer the question of law as to whether the appeal preferred by the petitioner was competent. The Tribunal granted that application, and the petitioner has come before us under articles 226 and 227 of the Constitution urging that it was not competent to the Tribunal in law to make this reference.
2. Now, the provision with regard to the making of the reference is contained in section 66 and sub-section (1) of that section provides that within sixty days of the date upon which he is served with notice of an order under sub-section (4) of section 33 the assessee or the Commissioner may, by application in the prescribed form, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and Mr. Palkhivala's argument is that the assessee contemplated by section 66(1) is the assessee who has preferred the appeal before the Tribunal and inasmuch as the fourth respondent preferred no appeal against the order of the Appellate Assistant Commissioner, it was not competent to him to apply for a reference under section 66(1). The only person who could have applied for a reference was the petitioner, he being the assessee within the meaning of section 66(1), and he alone having appealed against the order of the Appellate Assistant Commissioner. 'Assessee' is defined in the Act under section 2(2) as meaning a person by whom income-tax or any other sum of money is payable under this Act and includes every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the loss sustained by him or of the amount of refund due to him. Therefore, giving to the expression 'assessee' in section 66(1), the meaning ascribed to it by the Act itself, it is clear that any person by whom income-tax or any other sum of money is payable has the right to make an application for a reference.
3. Now, there can be no doubt that the fourth respondent as a partner or as the proprietor of the firm is liable to pay tax assessed upon the firm. What is more, the effect of the judgment of the Tribunal is that whereas by reason of the decision of the Appellate Assistant Commissioner income-tax was payable by all the partners of the firm, the finding of the Tribunal relieves the petitioner of his liability and to that extent increases the liability of the fourth respondent. It is difficult to understand how the contention can be put forward, as has been done, that because Gokaldas did not appeal to the Tribunal from the decision of the Assistant Commissioner he is debarred from applying for a reference under section 66(1). Gokaldas accepted the decision of the Appellate Assistant Commissioner that the firm was a partnership firm. It is only when the Tribunal gave a contrary decision that he felt aggrieved, and to suggest that although his rights were vitally affected and although he was liable to pay tax, he should not be given the right of applying for a reference under section 66(1) merely because he was not a party to the appeal is not only to ignore the definition of the expression 'assessee' but to deprive an aggrieved party of the important right of coming to this Court on a question of law. It is indeed curious that this argument should be put forward by the petitioner because if this argument were sound, then he is denying himself his own right to go to the Tribunal, because he did not appeal against the order of the assessment to the Appellate Assistant Commissioner. Only Gokaldas appealed and yet the petitioner did prefer an appeal to the Tribunal from the decision of the Appellate Assistant Commissioner precisely because he was an assessee in the sense of a person being liable to pay tax and, therefore, competent to prefer an appeal. In this petition he is trying to deny the right to the fourth respondent which he himself successfully exercised by preferring an appeal to the Tribunal against the decision of the Appellate Assistant Commissioner.
4. It will be noticed that in section 33 also the right of appeal against orders of the Appellate Assistant Commissioner is given to any assessee objecting to an order passed by the Appellate Assistant Commissioner. Therefore, the right of appeal to the Tribunal or the right to apply for a reference is not confined technically to the party who is a party to the appeal, but is a much wider right which can be exercised by any person who becomes liable to pay tax by any order against which the appeal is preferred.
5. Some difficulty was suggested by Mr. Palkhivala with regard to the proper procedure to be followed in cases like this. Undoubtedly this is rather an unusual matter. Ordinarily the application is made either by the Commissioner or by the party to the appeal and when the reference comes before us, the only parties are the Commissioner on the one side and the assessee on the other, in the sense of a person who was a party to the appeal before the Tribunal. But in this case complication is caused by the fact that the appellant before the Tribunal was the petitioner, and the fourth respondent has made an application for reference. In our opinion, the reference should be made at the instance of the fourth respondent who would be the applicant. The Commissioner as usual would be the respondent. The petitioner who would also have the right to be heard would be the second respondent and as we are told that there are other partners in the firm besides the petitioner and the fourth respondent, the proper thing would be to make the unregistered firm as a third respondent to the application.
6. The result is that the petition fails and is dismissed with costs.
7. The Income-tax Commissioner to bear his own costs.
8. Petition dismissed.