1. A notice of motion has been taken out by the assessee in this reference for directing the Tribunal to raise an additional question of law. and a preliminary objection is taken by Mr. Joshi on behalf of the Commissioner that the notice of motion is barred by limitation.
2. The order in respect of which the additional question of law is sought was passed on 22-12-1954 and the order was served upon the assessee on 11-1-1955, and the notice of motion is taken out on 25-7-1955. Clearly the notice of motion has been taken out more than six months after the service of the order and Mr. Joshi's contention is that the period of limitation is laid down in Section 66(2) and by reason of that period of limitation the notice of motion is barred.
3. Section 66C2) deals with a case where the Appellate Tribunal refuses to state a case on the ground that no question of law arises, and it gives a right to the assessee or the Commissioner, as the case may be, to apply to the High Court, and if the High Court is not satisfied as to the correctness of the decision of the Appellate Tribunal the High Court may require the Appellate Tribunal to state the case and refer it; and this power can only be exercised within six months from the date on which he, i.e., either the assessee or the Commissioner, is served with the notice of the refusal.
4. The contention of Mr. Palkhiwalla is that Section 66(2) only applies where the Appellate Tribunal refuses to state a case in the first instance, but if the Appellate Tribunal states a case and refuses to state a case with regard to some additional question of law then Section 66(2) has no application. It is difficult to understand why that interpretation should be put upon Section 60(2).
Section 66(1) deals with a statement of case; by the Appellate Tribunal and Section 66. (2) deals with a case where the Tribunal refuses to state a case. It may state a case with regard to one question of law, it may refuse to state a case with regard to another question of law suggested by the assessee on the ground that no question of law arises, and the power of the High Court is to correct the Tribunal when it wrongly comes to the conclusion! that no question of law arises and that power of correction is the same whether the Tribunal refuses to si-ate a case altogether or having stated a case refers only one question of law and not another which is suggested by the assessee.
Both Sub-section (l) of Section 66 and Sub-section (2) of Section 66 are comprehensive and they deal with two different sets of circumstances. To suggest that Section 66(2) has no application because a case has been stated and the Tribunal refuses to refer an additional question of law suggested by the assessee is to ask us to come to the conclusion that it is open to the assessee, once a case has been stated, at any time to apply to the High Court to direct the Tribunal to raise an additional question of law.
In other words, the Legislature deliberately and advisedly fixed no period of limitation with regard to an application to be made by an assessee in a case where a case has been stated by the Appellate Tribunal. In our opinion there is no war-rant whatever for reading Section 66(2) in that restricted fashion.
5. it may be pointed that it has been a settled practice of this Court, which practice is not disputed by Mr. Palkhiwalla that a notice of motion, whether taken out by the Commissioner or an assessee, if taken out six months after the date on which the order was served upon either party, is dismissed on the ground of limitation, and there has never been any suggestion that that practice was not a proper practice or was not justified by the provisions of Section 66(2).
Mr. Palkhivala now relies on a recent decisionof the Allahabad High Court which is reported inMalmbir Prasad Niranjanlal v. Commr. of Income-tax, U. P. : 20ITR472(All) (A). In thatcase an application was made by the assessee forreferring certain other question which arose outof the order of the E. P. T. Appellate Tribunalwhich had not been referred by the Tribunal, andthe view taken by the Allahabad High Court wasthat such an application fell not under Section 66(2)but under Section 66(4).
With very great respect, it is difficult to understand how Section 66(4) can possibly apply to a case where an assessee is aggrieved by the decision of the Tribunal to refuse to refer additional question of law arising out of its order. Sub-section (4) of Section 66 undoubtedly confers very wide powers uponthe High Court, but those powers are exercised by the High Court suo motu and they are exercised when the High Court is not satisfied that the statements in a case referred under Section 66 are sufficient to enable it to determine the question submitted to it.
Therefore, the High Court itself must feel that the statement submitted is not a proper statement, and it is perfectly true that for that purpose the High Court may frame a proper question and modify or vary a question raised by the Tribunal and ask the Tribunal to submit a proper statement, but there must be a connection between the question raised by the Tribunal and the further statement called for by the High Court under this section, because the operative words of Sub-section (4) are that the High Court must not be in a position to determine the question raised by the Tribunal.
Now, when an assessee wants to raise an additional question of law it is difficult to understand how the Court is concerned with those questions under Sub-section (4) of Section 66. Therefore the only pro-per Sub-section under which the assessee can make such an application is under Section 66(2). Undoubtedly if the present case fell under Section 66(4), there is no period of limitation, and advisedly the Legislature did not impose any limitation upon the powers of the High Court to call for a further or additional statement from the Tribunal.
But a period of limitation was laid down when an application had to be made by the party himself. Therefore we are unable to agree, with respect, with the Allahabad High Court that an application by an assessee to the High Court for a direction upon the Tribunal to raise additional questions of law is an application that falls under Section 66(4).
6. The Allahabad High Court inb its judgment has referred tion the case of Khandvala & Co. v. Commr. of Income Tax AIR 1947 Bom 89 (B) and the learned Judges have taken the view that the point that arose before them and which they decided about limitation is covered. by this decision.
When we turn to that judgment, it lays down the practice that must be followed when an assessee wishes the Tribunal to raise additional questions of law, and the practice that was laid down by Sir Leonard Stone and Justice Kama, as he then was, was that a notice of motion must be taken out by the aggrieved party and the proper time for the aggrieved party to bring to the notice of the Court that certain further and other facts were necessary to be stated or certain further or other questions of law be raised and brought up for decision by the Court is the time when the reference comes up before the Court, and that this notice of motion should be heard along with the reference.
But the learned Judges did not consider at all what was the period of limitation within which the assessee should take out such a notice of motion or should ask the Court to direct the Tribunal to raise additional question of law. There is no discussion whatever with regard to the question of limitation and very likely it is for very good reason, because even in 1S46 the practice was well settled that such a notice of motion taken out by the assessee must be brought within six months from the date of the service of the order upon him.
Therefore, again with respect to the Allahabad High Court, we do not understand how the judgment in Khandvala's case (B), can be looked upon as an authority for the proposition that there is no period of limitation laid down for making an application for directing the Tribunal to raise additional questions of law. In our opinion, therefore. the present notice of motion is an application which falls under Section 66(2) and the period of limitation is six months from the service of the order and the notice of motion is therefore barred by limitation,
7. Mr. Palkhiwalla then applies that the delay should be condoned. It is significant that in the affidavit in support of the notice of motion no application is made for condonation of delay. Mr. Palkhiwalla says that the assessee is a man from Indore, he may not have known the practice of this Court.
But the notice of motion is taken out by an Advocate of this Court who is very familiar with income-tax practice and if the practice is well settled as Mr. Palkhiwalla concedes it is, it is impossible to understand why, knowing that prima facie the notice was barred by limitation, no case was made out for condonation of delay and no sufficient cause was shown. It is only when the Commissioner in his affidavit in reply raised the question of limitation that an affidavit in rejoinder a rather halting attempt is made to plead sufficient cause, and the sufficient cause pleaded is a very curious cause.
It is stated by the assessee that in view of the judgment in Khandwala's case (B), wherein the Court laid down that the notice of motion for stating additional facts or raising additional question should be heard along with the case stated by the Tribunal for the Court's opinion the assessee was under an honest belief that the notice of motion could be taken out at any time before the hearing of the reference under Section 66(1).
We are not told how this honest belief was induced in the assessee. He does not tell us that he was so advised by any lawyer. He could not possibly have been advised to that effect by any lawyer in Bombay knowing income-tax law. May be that he was advised by some Indore lawyer who may not have been familiar with the practice of this Court. But he does not say that he took advice from any lawyer from Indore.
If the assessee read the judgment himself and showed sufficient interest in income-tax law, it is difficult to understand, reading the Khandwala's case (B), how he came to the conclusion that that case lays down that the notice of motion could be taken out at any time so long as it could be heard along with the reference. It may be that incorrect advice given by a lawyer may constitute sufficient cause under certain circumstances.
We express no opinion on ifc, but at least there must be a plea that incorrect advice was given by some lawyer. It may also be that where the procedure is not well settled or it is doubtful a litigant, acting on an advice which may take one view of the proper procedure, may be excused for the delay. But even with regard to that, as we have pointed out, there is no averment in the affidavit that any lawyer advised the petitioner that according to his view of the practice of this Court the notice of motion could be taken out at any time so long as it was heard along with the reference. In our opinion no sufficient cause has been shown for condonation of delay.
8. The result is that the notice of motion mustbe dismissed on the ground that it was barred bylimitation. It is therefore dismissed with costs.
9. Notice of motion dismissed.