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J.J. Foams (P.) Ltd. Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Judge
Reported in(1983)5ITD416(Delhi)
AppellantJ.J. Foams (P.) Ltd.
RespondentCommissioner of Income-tax
Excerpt:
.....the facts of the case and the rival contentions regarding the reference of the additional question raised by the assessee. we find that there is a difference between the procedure for appeals and the procedure for reference to the high court and the tribunal has a right to condone any delay in the filing of the appeal if it is satisfied that it was due to a reasonable cause. it has only a limited power of condoning 30 days' delay in making the reference application. when several different matters are decided by the tribunal, it is open to a party to accept some decisions while raising questions of law relating to the other. where a party draws up a statement of facts on only one issue and raises only a question of law relating to that issue, it is clear that he wants to raise.....
Judgment:
1. The assessee J.J. Foams (P.) Ltd., filed a reference application under Section 256(1) of the Income-tax Act, 1961 ('the Act'), on 14-9-1982 and by this application, the Tribunal was required to refer one question of law which was stated to arise out of the order of the Tribunal in IT Appeal No. 2019 (Delhi) of 1981, relating to the assessment year 1976-77. The assessee has filed a statement of facts also as required under the rules. The question of law required to be referred was as under : Whether, on the facts and in the circumstances of the case, the Tribunal is right in not directing the ITO to recast the development rebate already computed by the Commissioner of Income-tax (Appeals) vide his order dated 19-9-1979 and to carry the same forward to subsequent years for actual deduction against profits of such subsequent year? The statement of the case also referred to the relevant facts relating to the above question.

2. When the matter came up for hearing before the Tribunal on 14-1-1983 the assessee submitted two questions of law, including the one which he had sought to be referred by his application. The additional question of law which he required the Tribunal to refer to the High Court was as under: Whether, on the facts and in the circumstances of the case, the Tribunal is justified in not directing the ITO to calculate the deduction permissible for the assessment years 1974-75 and 1975-76? 3. The departmental representative has objected to the reference of the question of law sought to be raised on 14-1-1983. It was submitted by him that the question now sought to be raised is an entirely different issue in respect of which the assessee had not raised any question of law in his application and no facts relevant to such question had been included in the statement of the facts. He pointed out that there was no rule in the Income-tax (Appellate Tribunal) Rules, 1963, like Rule 11 [of the said Rules] for the purpose of admission of additional grounds of appeal. It was further contended that the fresh question now sought to be raised will tantamount to a fresh reference application and such application will be barred by limitation as the question was being raised long after the communication of the Tribunal's order. He also pointed out that the Tribunal can condone delay only up to a period of 30 days in the filing of a reference application. He relied on the order of the Punjab High Court in the case of Punjab Distilling Industries Ltd. v. CIT [1952] 22 ITR 232. In this case, it was held that the assessee could not be permitted to raise additional questions of law if they had not been raised in the application made by the assessee. He, therefore, submitted that only the question of law relating to development rebate could be referred to the Hon'ble High Court.

4. The learned counsel for the assessee, on the other hand, submitted that the assessee was not making a fresh application under Section 256(1). Though he had raised only one question relating to his claim of development rebate at the time of making his application, he can certainly request the Tribunal to refer one more question of law, which arises out of the order of the Tribunal. In this connection, he strongly relied on the decision of the Supreme Court in the case of CIT v. V. Damodaran [1980] 121 ITR 572. In this case where the revenue applied for reference to the High Court, the assessee also requested the inclusion of a question and that question was also referred. The question arose was whether the Tribunal was right in referring the question at the instance of the respondent. The matter ultimately went to the Supreme Court and it was held that application under Section 256(1) can be made by either of the parties who may apply to the Tribunal for the purpose. The Supreme Court pointed out that the application has to be filed within a period of limitation. The Supreme Court held that the applicant party alone can raise a question of law unless the order made by the Tribunal operates entirely in favour of one party and in the course of making the order the Tribunal may have negatived some of the points of law raised by that party not being a party aggrieved by the result of the appeal, it is not open to that party to file a reference application. In such a case the non-applicant can ask for a reference to those questions which arise on its submissions negatived in the appeal by the Tribunal. Though the matter considered in the above decision was different, the learned counsel relied upon the observations wherein their Lordships observed : ...The form of reference application prescribed by Rule 48 of the Income-tax Rules, 1962, specifically requires the applicant to state the questions of law which he desires to be referred to the High Court....(p. 578) The Court further observed that the applicant 'may, in appropriate cases, be permitted by the Tribunal to raise further questions of law at the hearing of the reference application'. Deriving support from this contention it has been submitted that the assessee, who is an applicant, can raise further questions before reference is made and a statement is sent to the High Court. it was contended that if an applicant has missed to ask for a question of law in the original application, he can certainly ask for it at the time of hearing.

5. We have carefully considered the facts of the case and the rival contentions regarding the reference of the additional question raised by the assessee. We find that there is a difference between the procedure for appeals and the procedure for reference to the High Court and the Tribunal has a right to condone any delay in the filing of the appeal if it is satisfied that it was due to a reasonable cause. It has only a limited power of condoning 30 days' delay in making the reference application. When several different matters are decided by the Tribunal, it is open to a party to accept some decisions while raising questions of law relating to the other. Where a party draws up a statement of facts on only one issue and raises only a question of law relating to that issue, it is clear that he wants to raise question of law only relating to that particular point. If in connection with that issue itself he wants to raise one more question or wants to modify the question already suggested by him, it should be open to him to do so and the Tribunal should consider such questions for being referred to the High Court. However, the position regarding an entirely different issue and making a reference regarding that cannot be treated on the same basis. In other words, it appears to be a further application requiring the Tribunal to refer question on an issue which was not at all covered in the statement of facts originally filed. If the assessee was to file a reference application on the date when this question has been raised before the Tribunal, such reference application would be barred by limitation and the Tribunal will not have the power to condone such delay.

6. Coming to the facts of the present case, the statement of facts clearly point out to the dispute regarding the allowance of development rebate. After narrating all the relevant facts regarding this dispute the question of law relating to the development rebate was raised. The additional question now sought to be raised is relating to another issue which was considered by the Tribunal in para 5 of its order. The question regarding the development rebate was considered in para 6. In our opinion, an applicant has to make up his mind about the issue which he wants to take before the High Court within the time permitted under the law and he cannot be permitted to raise questions on fresh issues later on. We would have agreed with the learned counsel for the assessee if the additional question raised also related to an aspect of the claim for development rebate. In such circumstances, we are of the view that only one question of law can be referred to the Hon'ble High Court. The assessee's request for referring the other question is, therefore, rejected. We now proceed to draw up a statement of case regarding the question of law being referred.

7. to 9. [These paras are not reproduced here as they involve minor issues].


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