- These are two income-tax matters arising on the application of the assessees, Mohan Lal Narain Das of Benares. The first is a reference by the Income Tax Commissioner, Miscellaneous Case No. 842 of 1931, and the second is an application, Miscellaneous Case No. 70 of 1932, by the assessees asking that the Commissioner should be required to make a further statement on certain points. In regard to this application we have heard learned Counsel, and we have come to the conclusion that there is no further statement of the case required from the Income Tax Commissioner. Argument was made on ground (c) of this application which was whether after the filing of a revised return the assessees can be deemed quality under Section 52, Income Tax Act. We consider that this is not a question which can be referred to this Court under Section 66, Income Tax Act. Section 66(1) lays down :
'If in the course of any assessment under this Act or any proceeding in connection therewith other than a proceeding under Chapter VIII, a question of law arises, the Commissioner may................ draw up a statement of the case and refer it with his own opinion thereon to the High Court,'
that is, the Commissioner is precluded from making a reference in connection with a proceeding under Chapter VIII and Section 52 comes in Chapter VIII. Learned Counsel argued that the assessee could require such a reference under Section 66(2). That sub-section states that
'within 60 days of the date on which he is served with notice of an order under Section 51 or Section 52............ the assessee may require the Commissioner to refer to the High Court any question of law arising out of such order.'
The question is, therefore, whether an order for the prosecution of an assessee under Section 52 can be considered an order under Section 31 or Section 32. We are here concerned with Section 21 which deals with the order in appeal passed by the Assistant Commissioner. That section does not deal with the proceedings of an Assistant Commissioner under Section 52, and therefore, we consider that no reference can be made to this Court of any question arising out of an order under Section 52, passed by an Assistant Commissioner whether the order is contained in the order in appeal, or whether (as in present case), it is a separate proceeding. The other questions which the assessees desire to raise appear to us to be sufficiently covered by the reference in Miscellaneous Case No. 842 of 1931, with which we now proceed to deal. The question referred by the Commissioner of Income Tax was as follows :
'In all the circumstances of the case, was the Income Tax Officers finding that the agreement Appendix C, dated 7th March 1931, was a fabrication for the purposes of income-tax and that the alleged investments in the assessees names were not the property of their sister Musammat Munni Bibi but the property of the assessees themselves founded on evidence ?'
The learned Counsel argued that the Income Tax Officer had acted upon statements which he had not recorded in evidence in the presence of the assessee, and he invited our attention to page 13 of the printed book where the Income Tax Officer stated that further inquiries had revealed investments made by the assessees and they were reported to be carrying on business of pawning ornaments. Certain sums of money were set forth which had been received by the assessees. Learned Counsel admits that the assessees were asked whether they had received these sums, and the assessees admitted that they had received the sums. We consider therefore that there was no necessity to record evidence on the point as to the receipt of these sums by the assessees, because that fact was admitted by the assessees Learned Counsel argued that it was not open to the Income-tax Officer to come to a finding that the agreement dated 7th March, 1931, was a fabrication or that the investments in the names of the assessees were not the property of Musammat Munni Bibi, their sister. His argument was that all the evidence was in favour of the assessees, and therefore, the Income-tax Officer had come to a finding which was not based on any evidence before him. We must consider the circumstances of the case and what presumptions arise from those circumstances. It was admitted by the assessees as interest from third parties. The assessees alleged that although these investments stood in their names, yet the money was the money of their sister and had been invested on her behalf. The Income-tax Officer had before him the proved fact that the money was invested in the names of the assessees and this fact was proved by the admission of the assessees. The assessees alleged that the money was invested on behalf of their sister.
The onus of proof of this allegation lay on the assessees. It was open to the Income-tax Office as a matter of law to hold that the evidence produced by the assessees was insufficient to discharge the onus of proof which lay on them. The agreement printed on page 10 of the paper book which was produced by the assessees and their sister was a document executed on 7th March, 1931, setting forth that at some previous period not specified, their sister had made various deposits through the assessees with third parties and that the deposits of loans had been repaid for the most part. A letter also produced by the assessees was of a date corresponding to 1925 and this showed that the transactions in question had begun six years before the agreement. It was open to the Income-tax Officer to find that this agreement or admission relating to past events was not sufficiently proved to be a genuine transaction and therefore he was not violating any rule of law in rejecting it. Learned Counsel for the assessees has not been able to show us that any question of law arose in this reference. We find that it is not shown that the Income-tax Officer or the Income-tax Commissioner acted in any illegal manner. Accordingly our reply to the question referred by the Income-tax Commissioner is in the affirmative, and we hold that no further question arises in this reference or in this application. We therefore dismiss the application of the assessees with costs, and we assess the fees of the learned Government Advocate at Rs. 100, and he will file the certificate within the period allowed. A copy of this judgment under the seal of the Court will be sent to the Commissioner of Income-tax for his information.