1. On a requisition made by this court the Income-tax Appellate Tribunal has drawn up a statement of case and referred a question of law to this court under sub-section (2) of section 66 of the Income-tax Act (hereinafter referred to as the Act). We are here concerned with the assessment year 1945-46, the relevant accounting year being April 1, 1944, to March 31, 1945. It appears that in May, 1944, the assessee had purchased 425 shares of Messrs. Suren & Co. Ltd. of Jamnagar, in his own name. Similarly, 425 shares were also purchased by the assessee's wife, Mrs. Manhar Motilal. This fact, however, came to the knowledge of the Income-tax Officer long after the assessment for the year 1945-46 had been completed. By a letter dated 19th January, 1954, the Income-tax Officer made certain enquiries from the assessee and the assessee informed him that the shares were purchased about the month of April or May, 1944. It appears that the Income-tax Officer made further enquiries as to the source of the funds with which these shares had been purchased. Certain explanations were given by the assessee but not to the satisfaction of the Income-tax Officer. The Income-tax Officer, therefore, after obtaining the approval of the Commissioner of Income-tax, issued notice under section 34 of the Act for reopening the assessment of the assessment year 1945-46. During the assessment proceedings it was disclosed that the assessee had made four deposits, three in the month of March, 1944, and the fourth in the month of August, 1944, in his account in the books of Messrs. Suren & Co., totalling to Rs. 42,500. An account also was opened in the name of the assessee's wife and in that account an amount of Rs. 42,500 was deposited on 17th March, 1944. Almost all the shares of Messrs. Suren & Co. Ltd. were held either in the name of the assessee or his wife. As regards the source of Rs. 42,500 standing in the name of the assessee's wife, the explanation of the assessee was that it partly came from the sale proceeds of ornaments of the assessee's wife and partly from her savings in the past. As regards the amount of Rs. 42,500 standing to the credit of the assessee himself, the assessee explained that this amount represented the withdrawals made by him from his own business during the Samvat Years 1996, 1999 and 2000. This explanation of the assessee in respect of these two deposits was not accepted by the Income-tax Officer and the entire amount of Rs. 84,900 was brought to tax by the Income-tax Officer as income from undisclosed source. As already stated, the assessment was reopened in respect of the assessment year 1945-46. The assessee took an appeal to the Appellate Assistant Commissioner but to no avail. He took a further appeal to the Income-tax Appellate Tribunal. Before the Tribunal it was contended by the assessee that the assessee had satisfactorily explained the source from which those deposits were made and his explanation should have been accepted. It was further contended that even if the said sum of Rs. 84,900 was found liable to be taxed, then the appropriate assessment year was not the assessment year 1945-46 but the assessment year 1944-45 as all the amounts except Rs. 300 were already deposited in the financial year 1943-44. The Tribunal held that the assessee's wife was merely a benamidar, and the income-tax authorities were justified in holding that the source of Rs. 42,500 was not satisfactorily explained by any satisfactory material on record. The Tribunal also agreed with the departmental authorities that the assessee had failed to explain the source of the amount in deposit in his own name and that the income-tax authorities were justified in rejecting the explanation offered by the assessee in that respect. It also agreed with the view of the income-tax authorities that the assessee's wife was merely a benamidar of the assessee. The Tribunal, however, accepted the appeal of the assessee on taking the following view :
'We are of the opinion that while we agree with the income-tax authorities that the assessee had failed to account for the source of Rs. 84,900, that sum cannot be brought to tax as income of the 'previous year' 1944-45 ended March 31, 1945, but must be brought to tax as the income of the account year 1943-44, except for a small sum of Rs. 300. The sum of Rs. 300 is too small to require any specific explanation from the assessee. We would, therefore, hold that the Income-tax Officer was not justified in including the sum of Rs. 84,600 (Rs. 84,900 minus Rs.300) as income of the account year 1944-45 relevant for the assessment year 1945-46. If so advised, the Income-tax Officer may take suitable action for the assessment year 1944-45.'
2. The assessee made an application to the Tribunal under sub-section (1) of section 66 of the Act urging that a question of law arose out of the aforesaid observations of the Tribunal and prayed that that question be referred to the court. His application, however, was rejected by the Tribunal. The assessee then moved this court under sub-section (2) of section 66 of the Act and on a requisition made by this court, the Tribunal has referred the following question of law to this court :
'Whether in law and in the circumstances of the case the Tribunal was justified in finding that the assessee has failed to account for the source of Rs. 84,600 and observing that the said amount must be brought to tax as income of the accounting year 1943-44 ?'
3. Before we proceed to deal with the contentions, it may be stated that during the pendency of this reference, the assessee died and his legal heirs have been brought on record.
4. Mr. Pandit appearing for the assessee did not advance any argument before us on the first part of the question, i.e., whether in law and in the circumstances of the case, the Tribunal was justified in finding that the assessee had failed to account for the source of Rs. 84,600. The arguments advanced were confined to the other part of the question, i.e., whether in law and in the circumstances of the case, the Tribunal was justified in observing that the said amount must be brought to tax as income of the accounting year 1943-44, and it is only this part of the question which we are now called upon to answer.
5. In the first instance Mr. Pandit contends that the Tribunal, having held that the said amount of Rs. 84,600 was not the income of the previous year relevant to the assessment year 1945-46, should have decided the whole appeal and it was not necessary for the Tribunal to proceed to decide the other questions.
6. We are unable to agree with this contention of Mr. Pandit. It is true that some courts do follow the practice of deciding an issue, which, according to them, is sufficient for the disposal of the case and do not proceed to decide the other issues. But if a court or a tribunal chooses to decide all issues arising in the case, even though the decision on one issue is sufficient to dispose of the case, it cannot be said that the court was not justified in deciding all the issues. Nor can it be said that in deciding all the issues the court had acted without jurisdiction. Sub-section (4) of section 33 which relates to the powers of the Appellate Tribunal is in the following terms :
'The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner.'
7. Subject to the condition that an opportunity of being heard should be given to both the parties, the powers of the Appellate Tribunal are very wide to pass such orders as it deems fit on the appeal. Of course, it would not be open to the Tribunal to decide an issue which has not been raised before it and if the Tribunal does so it would be acting without jurisdiction and without justification. It has, therefore, to be seen whether in making the observations to which the assessee has objected, the Tribunal was dealing with any of the contentions not raised before it.
8. Now, to ascertain what contentions were raised before an appellate court, the grounds of appeal as well as the contentions summarised in the appellate order would be relevant. Turning to the appellate order in paragraph 3 thereof the Tribunal has summarised the contentions raised before it. The first contention relates to the validity of the notice under section 34. The second ground urged was that the explanation offered by the assessee in respect of the sum of Rs. 84,900 should have been accepted. In the third contention it was urged that even if it was assumed as an income from undisclosed sources, it could not be included in the total income for tax purposes inasmuch as the investment, i.e., purchase of shares, was made at Jamnagar, a place in the then native State, and was not liable to be taxed. The fourth contention related to the acceptance of the assessee's explanation relating to the deposits in the name of his wife, and the fifth contention is summarised by the Tribunal in the following terms :
'That if the said sum of Rs. 84,900 is found liable to be taxed, then the appropriate assessment year is not the assessment year 1945-46 (the one to which this appeal relates) but the assessment year 1944-45 as all the funds except Rs. 300 were already deposited in the financial year 1943-44.'
9. Now, the assessee had in terms raised a contention before the Tribunal that if the sum of Rs. 84,900 was found liable to be taxed, then it was the income of the assessment year 1944-45 and not of the assessment year 1945-46 and, therefore, the assessment made against him should be cancelled. That being the contention raised before the Tribunal, we find it difficult to sustain the contention that the Tribunal was not justified in proceeding to deal with the contention of the assessee in respect of the year to which the said income belonged. In our opinion, therefore, it is not possible to hold that the Tribunal was not justified in making the observations which we have already reproduced above. We find support in the view taken by us in the decision of the Madras High Court in K. Simrathmull v. Additional Income-tax Officer, Ootacamund and the decision of a Division Bench of this court in General Construction and Supply Co. v. Income-tax Officer, (8th) C-Ward, Bombay. At page 21 of the report the learned Chief Justice has observed :
'The appellants contended that this amount should have been assessed in the assessment year 1946-47 and not in 1947-48. In order to decide this question, it was necessary for the Assistant Commissioner to determine in which particular assessment year the above income should have been assessed. The appellate authority found that the amount of Rs. 85,000 should have been included in the income for 1946-47 and not for 1947-48. This was a finding, which it was necessary for him to record, in order to decide the question, which has been raised by the appellants themselves. The finding recorded by him cannot, therefore, be said to be a finding without jurisdiction.'
10. Mr. Pandit, however, contends that the assessee's contention as summarised by the Tribunal does not correctly represent the contention raised before it. According to Mr. Pandit, the only contention raised before the Tribunal was that if the said sum of Rs. 84,900 was found liable to tax, then the year 1945-46 was not the appropriate assessment year. According to Mr. Pandit, no alternate year was suggested by the assessee before the Tribunal. Mr. Pandit further urged that if the grounds of appeal are looked into, the position would be clear that the assessee at no time had suggested that if the sum of Rs. 84,900 was income from undisclosed sources, then it was the income of the assessment year 1944-45. Pointing us to paragraph 10 of the statement of case, he urged that he had also raised an objection in this respect at the time the statement of the case was drawn up. We, however, find that the Tribunal has not accepted the contention of the assessee to be correct. On the other hand, the Tribunal has stated that the contentions urged before it had been correctly stated by it in its appellate order. There is not even an affidavit filed on behalf of the assessee to the contrary. That being the position, the statement of the case must be accepted in this respect. It may be true that the contention had not been raised in the grounds of appeal in the form it was raised before the Tribunal but that fact, by itself, in our opinion, would not debar the Tribunal from proceeding to deal with the contentions raised before it.
11. It is next urged by Mr. Pandit that in exercise of its appellate powers, the Tribunal has no jurisdiction to enhance the assessment. Since by the aforesaid order the Tribunal has enhanced the assessment in respect of the assessment year 1944-45, the order is bad.
12. We are unable to agree with Mr. Pandit that the order of the Tribunal has in any manner enhanced the assessment in respect of the assessment year 1944-45. If the aforesaid observations do amount to a finding in law that may enable the Income-tax Officer to claim reopening of the assessment in respect of the assessment year 1944-45 and in that event the assessment may possibly be enhanced, but all that is in the realm of conjecture. It cannot be said that the enhancement of the assessment for the year 1944-45 is the direct effect of the order made by the Tribunal in the appeal. This contention, therefore, in our opinion, has to be rejected.
13. Lastly, it is contended by Mr. Pandit that the Tribunal has not applied its mind in observing that for the assessment of the said amount of Rs. 84,900 the relevant assessment year is 1944-45. According to him, the Tribunal has not applied its mind and has not decided as to whether the said amount is the income of the assessee. We are also unable to agree with this contention of the assessee. On the other hand, reading the order as a whole, it is clear that the Tribunal has affirmed the finding of the income-tax authorities that the said amount of Rs. 84,900 represents income of the assessee from an undisclosed source. It is well-settled that the financial year is the previous year of income from an undisclosed source when the source of income is other than the regular business of the assessee : Commissioner of Income-tax v. Meghu Sao Jhandhu Sao . In our opinion, therefore, the last contention also cannot be accepted.
14. For reasons stated above, our answer to the question which we have proceeded to decide is in the affirmative.
15. Before parting with the case it is necessary to state that Mr. Pandit had contended before us that even assuming that the aforesaid observations amount to a finding, they are only obiter and, therefore, is not a finding within the meaning of the second proviso to sub-section (3) to section 34 enabling the income-tax authorities to reopen the assessment of the assessee for the assessment year 1944-45. In our view the question raised by Mr. Pandit does not fall within the ambit of this reference. If and when the reassessment is sought to be made for the assessment year 1944-45 such a question may become relevant in those proceedings. We, therefore, do not consider it proper to express any opinion on the contention raised so as to avoid any possible prejudice being caused to either side.
16. Reference is answered accordingly. Assessee shall pay the costs of the department. No separate costs in the notice of motion.