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Juggilal Kamlapat Vs. Commissioner of Income-tax, Uttar Pradesh and Vindhya Pradesh. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberI. T. Miscellaneous Cases Nos. 233, 234, 240, 241, 242 and 243 of 1953
Reported in[1961]41ITR257(All)
AppellantJuggilal Kamlapat
RespondentCommissioner of Income-tax, Uttar Pradesh and Vindhya Pradesh.
Excerpt:
- - the legislature, when it preferred to give the direction to the tribunal to state the case and refer it to the high court instead of directing the tribunal to refer to the high court a question or questions of law arising out of the appellate order, clearly did so with some purpose. for such cases, therefore, there is a clear remedy under section 66 (2) of the income-tax act, and, when that remedy is sought by an application before the high court under that provision of law, the high court has to satisfy itself about the correctness of the decision of the tribunal refusing to state the case and if it is not satisfied about the correctness of the refusal the high court can require the tribunal to state the case and refer it to the high court. any defective statement as to facts and.....bhargava, j. - applications nos. 233, 240 and 243 of 1953 purport to be applications under section 21 of the excess profits tax act. they relate to appellate orders passed by the income-tax appellate tribunal in appeals arising out of proceedings for assessment of excess profits tax for the three chargeable accounting periods ending on december 31, 1940, december 31, 1941, and december 31, 1942, respectively. the other three connected applications nos. 234, 241 and 242 of 1953 are applications under section 66 (2) of the income-tax act and they are directed against appellate orders of the tribunal passed in proceedings arising out of assessment of the applicant for the assessment years 1941-42, 1942-43 and 1943-44, the relevant previous years being concurrent with the chargeable.....
Judgment:

BHARGAVA, J. - Applications Nos. 233, 240 and 243 of 1953 purport to be applications under section 21 of the Excess Profits Tax Act. They relate to appellate orders passed by the Income-tax Appellate Tribunal in appeals arising out of proceedings for assessment of excess profits tax for the three chargeable accounting periods ending on December 31, 1940, December 31, 1941, and December 31, 1942, respectively. The other three connected Applications Nos. 234, 241 and 242 of 1953 are applications under section 66 (2) of the Income-tax Act and they are directed against appellate orders of the Tribunal passed in proceedings arising out of assessment of the applicant for the assessment years 1941-42, 1942-43 and 1943-44, the relevant previous years being concurrent with the chargeable accounting periods mentioned above. After the decision of all the six appeal which came up before the Income-tax Appellate Tribunal applications were moved before the Tribunal under section 66 (1) of the Income-tax Act or section 21 of the Excess Profits Tax Act to refer certain question of law to this court. The Income-tax Appellate Tribunal in all six cases prepared statements of the cases and referred them to this High Court. In these statements of the cases only some of the questions, which according to the applicant arose out of the appellate order of the Tribunal, were referred to this court whereas some other questions were not referred. Thereupon, the applicant moved these applications praying to this court to ask for statements of the cases from the Income-tax Appellate Tribunal in respects of those question which were not included in the statements of the case already referred to this court by the Tribunal. When these applications came up for hearing a preliminary question arose whether these applications could appropriately be presented under section 66 (2) of the Income-tax Act or whether the appropriate provision of law under which such applications could be entertained by the court would be section 66 (4) of the Income-tax Act. We, consequently, heard learned counsel for the parties on this preliminary question. It may be mentioned that though the applicants had themselves moved these applications purporting to be under section 66 (2) of the Income-tax Act, Mr. R. S. Pathak, learned counsel appearing for them, urged before us that the applications could appropriately be moved under section 66 (4) of the Income-tax Act and prayed that these applications be treated as such.

The preliminary question that thus falls for our decision is whether in cases where an assessee makes an application under section 66 (1) of the Income-tax Act to the Tribunal to refer more than one question of law arising out of the appellate order of the Tribunal and the Tribunal only draws up a statement of the case in respect of some of the questions of law and refers it to the High Court while refuses to frame other questions of law or to draw up a statement of the case in respect of them, the appropriate provisions of law under which the aggrieved assessee can move this court is section 66 (2) of the Income-tax Act or section 66 (4) of the Income-tax Act. It appears that for the purposes of deciding this question it is necessary to make a close scrutiny of the language of the various sub-sections of section 66 so as to be able to find out which of the two provisions of the law is more appropriately applicable.

We may first take up the language of section 66 (1) of the Income-tax Act. Under that provision, the assessee or the Commissioner is permitted to make an application before the Appellate Tribunal to refer to the High Court 'any question of law arising out of such order' and then there is direction in this provision that the Appellate Tribunal shall draw up a statement of the case and refer it to the High Court. It is to be noted that, before the duty which the Tribunal is required to carry out by the law is put down, the language used does not follow the language in which is to be mentioned the prayer of the assessee or the Commissioner. The prayer of the assessee or the Commissioner in the application has to be one requiring the Appellate Tribunal to refer any question of law arising out of the appellate order which expression will include one question of law arising out of that order. When the Tribunals duty is laid down the Tribunal is directed to draw up a statement of the case and refer it to the High Court. This direction to the Tribunal as contained in this language thus does not follow the requirements to be mentioned in the application made by the assessee or the Commissioner. In case it had been desired that the act to be done by the Tribunal in carrying out the direction was to comply with the requirements of the assessee or the Commissioner in the application, this direction should have been in the language that the Tribunal shall refer the question or questions of law arising out of the appellate order to the High Court. The Legislature, when it preferred to give the direction to the Tribunal to state the case and refer it to the High Court instead of directing the Tribunal to refer to the High Court a question or questions of law arising out of the appellate order, clearly did so with some purpose. The purpose was that the reference to the High Court was to be not confined to a question or questions of law only but was to comprise within it the whole case. The case, in these circumstances, would consist of all questions if law arising out of the appellate order of the Tribunal on the facts and circumstances found by the Tribunal and the Tribunal is required to draw up a statement of such a case. The statement drawn up by the Tribunal would, therefore, consist of (1) questions of law arising out of the appellate order of the Tribunal and (2) facts and circumstances relevant and necessary for the determination of those questions of law. This languages also indicates what is the scope of the word 'case' as used in section 66 (1) of the Income-tax Act. The word 'case', as we have just indicated, must be held to comprise within it all questions of law arising out of the appellate order on the facts and circumstances which have been found to exist. There being such a case in existence, and at the same time an assessee or a Commissioner having applied to the Tribunal to refer some questions of law to the High Court as arising out of the appellate order of the Tribunal, the Tribunal has to prepare a statement of that case. Consequently, when preparing the statement of the case, the Tribunal would to have to frame the actual questions and also to include within the statement of that case statements of relevant facts and circumstances. In some cases, the Tribunal may refuse to prepare a statement of the case altogether after holding that no question of law arises out of the appellate order of the Tribunal. In other cases, the Tribunal may frame all questions of law actually arising out of the appellate order and then there may be a third class of cases where the Tribunal may prepare a statement of the case in respect of some of the questions of law arising out of the appellate order while refusing to do so in respect of other questions of law which may actually arise out of the appellate order but which, in the opinion of the Tribunal, do not arise. Since these three contingencies can arise out of the action of the Tribunal under section 66 (1) of the Income-tax Act, we have to look to the other provisions of the Act to see what further proceedings have to be taken in each of those circumstances so as to provide adequate relief to the parties concerned.

In the first instance, we may take the circumstances where the Tribunal has refused to frame any question of law at all on its opinion that no such question of law arises. The remedy for the aggrieved person in such a case is provided in section 66 (2) of the Income-tax Act which applies 'whenever the Appellate Tribunal refuses to state the case on the ground that no question of law arises.' Section 66 (2) of the Income-tax Act thus gives a full remedy to any aggrieved person if the refusal of the Tribunal to state a case is based on the ground that no question of law arises. This provision of law on its language thus applies to case where there is a total refusal by the Tribunal to state the case and refer it to the High Court as the Tribunal was directed to do under section 66 (1) of the Income-tax Act. For such cases, therefore, there is a clear remedy under section 66 (2) of the Income-tax Act, and, when that remedy is sought by an application before the High Court under that provision of law, the High Court has to satisfy itself about the correctness of the decision of the Tribunal refusing to state the case and if it is not satisfied about the correctness of the refusal the High Court can require the Tribunal to state the case and refer it to the High Court. It is again to be noted that even under section 66 (2) of the Income-tax Act, the direction to the Tribunal is to state the case and to refer it to the High Court so that what the Tribunal has to refer to the High Court is a case which it is required to state and not merely a question of law. Under this power, therefore, the High Court can grant adequate relief to a person aggrieved by a refusal of the Tribunal to state altogether a case and to refer it to the High Court when its powers are invoked under section 66 (1) of the Act.

In the second case, where the statement of the case which is referred by the Tribunal to the High Court under section 66 (1) of the Income-tax Act includes within it all the questions of law which the assessee desired the Tribunal to refer to the High Court, no question would arise of the assessee making a grievance against the order of the Tribunal except that in some cases it may be found that, though the statement of the case is complete as including all questions of law arising out of the appellate order of the Tribunal, it may still be defective to the extent that it may not contain complete statements of facts and circumstances relevant for the decision of those questions. In such circumstances, the aggrieved party can invoke the powers of the High Court under section 66 (4) of the Income-tax Act. Apart from the right of a party to invoke the powers of the High Court, the High Court also possesses power suo motu to have the defect rectified by calling upon the Tribunal to make additions to or alterations in the statements which may have been made by the Tribunal in the case when referring the case to the High Court. This remedy under section 66 (4) in respect of the defect in the statement of a case referred is available in both cases where the statement of the case is submitted to the High Court by the Tribunal under section 66 (1) of the Income-tax Act or where the statement of the case is submitted under section 66 (2) of the Income-tax Act. Any defective statement as to facts and circumstances in the statement of the case prepared by the Tribunal either under section 66 (1) or 66 (2) of the Act can thus be clearly rectified if the High Court exercises its power under section 66 (4) of the Income-tax Act.

There finally remains a case where the Tribunal may have prepared the statement of the case in respect of some questions of law arising out of the appellate order while refusing to state the case in respect of other questions which may actually arise out of the appellate order but which according to the Tribunal did not arise from it. It appears that, in such a case also, the appropriate provisions of law under which relief can be granted to the aggrieved party by the High Court is section 66 (4) of the Income-tax Act. We have already indicated earlier, that both under section 66 (1) and 66 (2) of the Income-tax Act the requirements laid down by the law are that the Tribunal is to draw up a statement of the case and refer it to the High Court or state the case and refer it to the High Court. The Tribunal is required to refer the case to the High Court and not merely a question or questions of law which, in the opinion of the Tribunal, arise out of the appellate order. The case that has to be referred both under section 66 (1) and 66 (2) must be comprised of all the questions which in fact do arise out of the appellate order and the facts and circumstances which are relevant and necessary for the determination of those questions. The statement of the case prepared by the Tribunal is, therefore, required to include all these ingredients of 'case'. The statement would be incomplete if it did not include all questions of law arising out of the appellate order as well as facts and circumstances relevant to those questions. Similarly, when stating the case under section 66 (2) of the Income-tax Act, the Tribunal must state all the questions of law arising out of the appellate order and all the facts and circumstances relevant to them. If, when a case is referred, there is anything incomplete in the statement drawn up by the Tribunal, it must be held that the Tribunal has not properly discharged its duty which it was called upon to do under section 66 (1) and section 66 (2) of the Income-tax Act. Thereupon, the provisions of section 66 (4) of the Income-tax Act become applicable. Under this provisions of law, there is before the High Court a case referred by the Tribunal to it under section 66 (1) or section 66 (2) of the Act. The case referred appears before the High Court in the form of the statement of the case. This statement of the case will consist of questions of law and statements of facts which will complete the full statement of the case. Under section 66 (4) of the Income-tax Act, the High Court has to be satisfied that these various statements which comprise the statement of the case are sufficient to enable it to determine the question raised by the case. In case the High Court is not satisfied that it is so, the court is empowered to refer the case back to the Tribunal to make such additions to or alterations therein as the court may direct in that behalf. The High Court is empowered to refer the case back to the Tribunal for making additions to or alterations in the statement of the case whenever the High Court is not satisfied that the questions raised by the case can be appropriately determined by the statements contained in the statement of the case. The questions raised by the case would consist of not only questions which have been actually framed by the Tribunal when drawing up the case but of the appellate order of the Tribunal. The point as to which questions of law actually arise out of the Tribunals appellate order would at the initial stage be decided by the Tribunal under section 66 (1) of the Income-tax Act. If the Tribunal holds that no question of law at all arises, the Tribunal may refuse to state the case altogether whereupon the correctness of the decision of the Tribunal on the point whether any question of law does or does not arise can be scrutinized by the High Court under section 66 (2) of the Income-tax Act. In other case, where the Tribunal forms a correct opinion as to some questions of law arising out of the appellate order and draws up a statement of the case in respect of them and refers it to the High Court, whereas it forms a wrong opinion about other questions of law and refuses to state the case in respect of those questions and to refer it to the High Court, the occasion for the High Court to consider the opinion of the Tribunal would arise when the statement in the case which has already been referred to the High Court comes up for scrutiny before the High Court under section 66 (4) of the Income-tax Act, when the High Court can either act suo motu or on the move of any of the parties aggrieved. The statements contained in the statement of the case would at that stage be open to examination by the High Court and these statements which would be scrutinised by the High Court would include questions of law already framed, questions of law not framed but which are raised by the case, and facts relevant and necessary for determining all such questions of law. In case the High Court finds that the statements contained in the statement of the case are defective in any respect, the High Court can for the removal of that defect refer the case back to the Tribunal under section 66 (4) of the Income-tax Act. It is significant to note that though at the earliest stage in sub-section (1) of section 66 the Legislature used the expression 'question of law arising out of the appellate order' and permitted an aggrieved person to require the Tribunal to refer the question to the High Court, under subsequent provisions where the powers of the High Court are enumerated, the Legislature has always used the words 'case and question of law raised by the case' instead of using the expression 'question of law or questions of law.' Thus under section 66 (4) of the Income-tax Act what the High Court is to satisfy itself about if whether the statements in the case referred to it already by the Tribunal are sufficient to enable it to determine the questions raised by the case and not merely the questions of law which the Tribunal may have actually referred to the High Court. Under section 66 (5) again, the High Court, upon hearing of such a case, is directed to decide the questions of law raised by the case and not merely questions of law which may have been referred by the Tribunal to it.

When these provisions of law were being examined by us, it was at one time suggested that the words 'thereof' used in section 66 (4) of the Income-tax Act should be read as referring to the statement of the case so that this provision of law should be interpreted as laying down that the High Court should only see whether the statement of the case is complete in all respects to enable it to determine the questions actually framed in the statement of the case drawn up by the Tribunal. It appears that the language used in section 66 (4) of the Act does not justify this interpretation. As we have indicated earlier, under section 66 (1), the Tribunal has been directed to draw up a statement of the case and refer it to the High Court and the word 'it' in the latter part clearly stands for the word 'case' used in the earlier part. Similarly, in section 66 (2) of the Act the High Court requires the Tribunal to state the case and refer it. Once the case has been referred to the High Court under section 66 (1) or 66 (2) of the Act, section 66 (4) becomes applicable if the statements in the case are not sufficient to enable the High Court to determine the questions raised by that case. The word 'thereof' here in this context can only stand for the word 'case' as used earlier in this very sub-section so that the High Court when acting under section 66 (4) of the Income-tax Act is not to confine its attention to questions already framed by the Tribunal and included in the statement of the case referred to the High Court but is to examine the statements made in the case by the Tribunal for the purposes of deciding whether the High Court can adequately determine all the questions of law raised by the case itself. In sub-section (5) of section 66, following the same principle, the Legislature directed the High Court to decide the questions of law raised by the case and not merely the questions of law which may have been included in the statements of the case by the Income-tax Appellate Tribunal at the initial stage when submitting the statement of the case to the High Court. We are, therefore, of the opinion that the language of section 66 (4) of the Income-tax Act envisages that the High Court shall exercise this power of calling for a further statement of the case in respect of questions not included in the statement of the case by the Tribunal when a statement of the case is, in fact, already submitted by the Tribunal to the High Court, whereas, in cases where no statement of the case has at all been submitted by the Tribunal to the High Court on the ground that no question of law arises, the power that is to be invoked by the High Court is that conferred by section 66 (2) of the Income-tax Act.

We may also indicate one other line of reasoning which, in our opinion, supports our view that section 66 (4) of the Income-tax Act is the appropriate provision of law to be resorted to when the Tribunal has prepared a statement of the case and has submitted it to the High Court and has not included in that statement of the case all questions of law arising out of its appellate order. Supposing there is a case where the Tribunal, when moved under section 66 (1) of the Income-tax Act refuses to state the case altogether, thereupon the assessee who moved the Tribunal can come to the High Court and invoke its powers under section 66 (2) of the Income-tax Act. The High Court may grant that application and may require the Tribunal to state the case and refer it to the High Court. When complying with this order of the High Court, the Tribunal may either deliberately or accidentally omit to frame certain questions of law which may really arise and which the High Court under section 66 (2) may have held to arise. What would be the provisions of law under which, in such a case, the aggrieved person can have his grievance rectified It appears to us that the only provisions of law would be section 66 (4) of the Act. On receiving the statement of the case ordered under section 66 (2) of the Act, the High Court will scrutinise that statement of the case to see if all questions of law arising out of the appellate order have or have not been included in the case and, if some have not been included, the High Court can then direct the Tribunal to include within the statement of the case those questions and facts relevant to those questions or to submit a supplementary statement of the case which would serve the same purpose. Clearly, in such a case, an application under section 66 (2) of the Income-tax Act before the High Court would not lie. It would thus appear that in cases where the Tribunal has failed to include within the statement of the case under section 66 (2) of the Income-tax Act certain questions of law actually arising out of the appellate order the appropriate power which the High Court can exercise to rectify the defect would be the power conferred on it by section 66 (4) of the Income-tax Act. This example makes it clear that the power under section 66 (4) of the Income-tax Act conferred on the High Court to direct the Tribunal to make additions to or alterations in a statement of the case will include within it the power to ask the Tribunal to frame questions of law not included within the statement of the case. If such a power can be exercised by the High Court in cases where the statement of the case had been submitted under section 66 (2) of the Act, we can see no reason why a similar power should not be exercised by the High Court under the same provision of law when the statement of the case submitted under section 66 (1) of the Act is defective, in the same respect in which the statement submitted under section 66 (2) may have been defective. This is another line of reasoning which would show that it is properly within the scope of the power conferred by section 66 (4) on the High Court that the High Court can direct the Tribunal to include within a statement of the case by way of an addition thereto or alteration therein for the purpose of having before it for decision questions of law actually arising out of the appellate order of the Appellate Tribunal which the Tribunal may have omitted to include in the statement of a case either referred to under section 66 (1) or section 66 (2) of the Act. This is also the view which was taken by this court in Mahabir Prasad Niranjan Lal v. Commissioner by Income-tax.

We may also mention that our attention has been drawn to a few decisions of the other High Courts where a contrary view has been taken and it has been held that in cases of the type mentioned above section 66 (4) of the Income-tax Act applied. The earliest case to which our attention has been drawn is a decision of the Madras High Court in Anglo French Textile Co. v. Income-tax Appellate Tribunal. That was a case in which the powers of the High Court under section 45 of the Specific Relief Act were sought to be invoked in a case where the Income-tax Appeal later Tribunal had referred certain questions of law to the High Court for decision but it refused to refer other questions of law. The question that arose before the High Court was whether the power of the High Court under section 45 of the Specific Relief Act was really invoked. The learned judges held that section 66 of the Income-tax Act was self-contained with regard to the procedure to be adopted when an assessee or Commissioner is dissatisfied with an order of reference and that it does provide for the contingency when the statement of the case is incomplete, as well as for that when no reference has been made at all and on this view the learned judges refused to exercise their powers under section 45 of the Specific Relief Act. While deciding this question, it was incidentally remarked by the learned judges that where some questions of law have been referred whereas there is refusal to refer other questions of law, the remedy available was under section 66 (2) of the Income-tax Act. This view was expressed by the learned judges relying on an earlier decision in a Bombay case in Khandvala & Co. v. Commissioner of Income-tax. So far as that case of the Bombay High Court is concerned, it was referred to by this court in the case of Mahabir Prasad Niranjan Lal cited above where it was explained that case did not lay down that the appropriate remedy when some questions have been referred by the Tribunal and some have not been referred is contained in section 66 (2) of the Act. On the other land, it was indicated by this court that that decision could support the view that the appropriate remedy in such cases is that laid down under section 66 (4) of the Act. The learned judges of the Madras High Court, apart from relying on that earlier Bombay decision, gave no reasoning of their own for the view that section 66 (2) of the Income-tax Act was the appropriate provision of law applicable to such cases. Consequently, we are unable to derive any assistance from the decision of the Madras High Court.

The next case is a decision of the Calcutta High Court in Khetsidas Ratanlal v. Commissioner of Income-tax. That was a case where a statement of the case with reference to certain questions of law was referred by the Income-tax Appellate Tribunal to the High Court. That reference was heard by the High Court and answer to the questions referred was returned. Subsequently, the Tribunal made another reference of another question arising out of the same appellate order and the Calcutta High Court had to consider whether such a reference was competent. The High Court pointed out that, when the first reference was disposed of the court did not make any order under section 66 (4) of the Act and did not call for a further statement of the case. The court simply held that the question did not arise out of the appellate order and that, therefore, there was nothing to answer. As a result the reference which had earlier been made was disposed of and all possibilities of an application made by the assessee firm for a reference to the High Court were exhausted. It was then held that the Income-tax Act did not provide that, even after the Tribunal had referred to the High Court certain question of law supposed to arise out of their order and even after the High Court had held that those questions do not arise, the application for a reference still survives as a potent application and on the basis of that application, another and, in fact, any number of references may successively be made till at last the questions really arising out of the order, if there be any, are discovered and hit upon. The court further proceeded to hold that a supplementary statement can be submitted only when the High Court has called for such a statement under sub-section (4) of section 66. In spite of these circumstances learned counsel who had appeared before the High Court for the assessee contended that the assessee had made an application for a reference and, if a question of law did arise but the Tribunal had failed to refer the proper question, the assessee should not suffer. This contention was repelled by the High Court on the answer that the Income-tax Act has not consigned a party, desiring a reference to the High Court, to the absolute mercy of the Tribunal or to a helpless condition and if a party fins that although the Tribunal was making a reference it was not referring the proper question, it was always open to him to come to the High Court and move it under section 66 (2) of the Act for a direction. It is the last comment by the Calcutta High Court that indicates a position contrary to the view that we have taken above. It may, however, be noticed that in that case the Calcutta High Court not only considered the possibility of a reference being called for under section 66 (2) of the Income-tax Act in respect of questions not included in the first reference but also made comments indicating that possibly in such a situation, the provisions of section 66 (4) of the Income-tax Act may also have been invoked. At the earlier stage, they specifically mentioned the fact, that, at the time of disposing of the first reference, the High Court had made no order under section 66 (4) of the Act and then the principal argument which was submitted by the learned counsel for the assessee was met by making a reference to section 66 (2) of the Act. That court was really concerned only with the question of competence of the second reference and was not called upon to decide whether the appropriate remedy which the assessee should have sought was by an application under section 66 (4) in the reference or by a separate application under section 66 (2) of the Act. That also language of these two provisions of law to see which of the two was properly applicable and consequently this decision can hardly be said to be an authority on this question.

The third case is a decision of the Bombay High Court in Pannalal Nandlal Bhandari v. Commissioner of Income-tax. In that case, the question that is now before us arose in exactly this form. The learned Chief Justice of the Bombay High Court delivered the judgment of the court and referred to the decision of this court in Mahabir Prasad Niranjan Lal cited above and expressed his disagreement with the view taken by this court. In coming to that decision, the learned Chief Justice considered the language of sub-section (4) of section 66 and held that when an assessee wants to raise an additional questions of law it is difficult to understand how the court is concerned with that question under sub-section (4) of section 66. It appears that the attention of the learned Chief Justice was not specifically drawn to the scope of the provisions contained in section 66 (4) of the Income-tax Act under which, as we have indicated earlier, the High Court can direct additions to or alterations in a statement of the case and that this power is to be exercised for the purposes of enabling the High Court to answer properly all questions of law arising out of the appellate order of the Tribunal in that case. The learned Chief Justice on his view that sub-section (4) of section 66 of the Income-tax Act could not apply proceeded to infer that the only proper sub-section under which the assessee can make such a application is section 66 (2) and at this stage no detailed examination was made of the language of section 66 (2) to see whether it permitted the High Court to pass orders asking for a statement of the case in such circumstances. We have already mentioned above, that the opening clauses of section 66 (2) themselves narrow down the scope of that sub-section where, as a condition precedent to the exercise of the power of the High Court under that sub-section, it is laid down that it must be case where the Income-tax Appellate Tribunal has refused to state a case on the ground that no question of law arises. In a case where even one question of law does arise in the opinion of the Tribunal and a statement of the case is submitted, it appears to us to be even more difficult to say that it is still a case where the Tribunal has refused to state the case on the ground that no question of law arises so that the language of sub-section (2) of section 66 of the Income-tax Act goes to a much greater length in excluding cases of the type before us from the scope of this sub-section rather than the language of section 66 (4) of the Act. In these circumstances, we are constrained to say that with all respect we are unable to agree with the opinion expressed by the Bombay High Court in that case.

The last case directly on the point brought to our notice is a decision of the Punjab High Court in Balbhadhar Mal Kuthiala v. Commissioner of Income-tax. That court, when dealing with a similar case, stated, as its opinion, that section 66 (4) has no application to a case where the Appellate Tribunal states a case with regard to certain questions of law but refuses to state a case with regard to some other questions which the assessee or the Commissioner, as the case may be, wants to raise and that, for this purpose, the assessee or the Commissioner can only make an application to the High Court under sub-section (2) of section 66. This opinion was expressed by that court without giving any reasons and without a full discussion of the language and scope of sub-sections (2) and (4) of section 66 of the Income-tax Act. Consequently, this is another case from which we are unable to derive any assistance at all.

We may also mention that Mr. Gopal Behari, learned counsel for the Department, drew our attention to certain remarks of the Supreme Court in New Jehangir Vakil Mills Ltd. v. Commissioner of Income-tax. In that case the point which came up for decision of the Supreme Court was quite different. A statement of the case has been referred to the High Court by the Tribunal in respect of certain questions of law and those questions were answered. During the pendency of that reference an application had been made before the High Court to call for a supplemental statement of the case under section 66 (4) of the Income-tax Act. By that application what the assessee sought was a direction from the High Court to refer the case back to the Tribunal to find new facts and embark upon a new line of enquiry which would have enabled the assessee to make out a case which had never been made during the course of the proceedings before the income-tax authorities or the Tribunal up to the time of the appeal. Their Lordships of the Supreme Court held that the scope of section 66 (4) of the Income-tax Act was not wide enough to permit the High Court to adopt such a course. Their Lordships were not in that case directly concerned with the question whether, if some questions are referred by the Income-tax Appellate Tribunal and other questions which do actually arise from the order of the Appellate Tribunal are not included in the statement of the case referred to the High Court, the appropriate provisions under which the High Court can act is section 66 (2) or section 66 (4) of the Income-tax Act. No doubt in the discussion of the point which was before their Lordships, there are a few sentences which bereft of the context might be considered as indicating that the Supreme Court was of the opinion that the appropriate provision of law to be resorted to under such circumstances is section 66 (2) of the Income-tax Act and not section 66 (4) of the Income-tax Act. We do not, however, consider that such comments made in the course of an examination of a different point could be intended by their Lordships to be a pronouncement on the question that the section which appropriately applied to such cases as the one before us will be section 66 (2) of the Income-tax Act and not section 66 (4) of the Income-tax Act. We infer this further from the circumstances that their Lordships did not specifically examine the language of either section 66 (2) or 66 (4) of the Act for such a purpose. In the circumstances, we consider that the decision of the Supreme Court is distinguishable and that in the present case we are entitled to hold for the reason indicated by us that these applications should appropriately be dealt with under section 66 (4) of the Income-tax Act and not under section 66 (2).

As Mr. R. S. Pathak, learned counsel for the assessee, has made a prayer already verbally that these applications may be treated as applications under section 66 (4) or section 21 of the Excess Profits Tax Act read with section 66 (4) of the Income-tax Act, as the case may be, we accept this prayer and direct accordingly. Now these applications are to be treated as applications in pending reference made under section 66 (4) of the Income-tax Act. These applications should be listed for orders with the references.

Order accordingly.


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