1. The assessee, a registered firm, derives income from property, manufacture and sale of woollen yarn, shawls and woollen fabrics, etc. The head office of the firm is styled as 'M/s. Saligram Prem Nath'and one of its branches is styled as ' Supreme Woollen Mills '. Separate accounts are maintained for the head office and the branch office. For the accounting year ended March 31, 1969, relevant to the assessment year 1969-70, the assessee declared income of Rs. 3,27,966. An audited copy of the profit and loss account for the period under consideration and balance-sheet as on March 31, 1969, were filed. The ITO found fault with the figures mentioned in the return and for a number of reasons given in his order estimated the sales at rupees seventy lakhs and by applying the gross profit rate of 25% he worked out the total gross profit, which the assessee should have shown, at Rs. 17,50,000. He thus made an addition of Rs. 7,72,953 (Rs. 17,50,000--Rs. 9,77,047). Loss on exports claimed at Rs. 83,766 was disallowed without any discussion in the assessment order. The assessee filed an appeal before the AAC who upheld the addition of Rs. 7,72,953. The assessee filed a second appeal before the Tribunal. It was pleaded on behalf of the assessee that neither the proviso to Section 145(1) nor to Section 145(2) of the I.T. Act, 1961 (hereinafter referred to as 'the Act'), was applicable to the facts of the case. A number of arguments were raised in support of this contention. It was claimed on behalf of the assessee that the addition made by the ITO and upheld by the AAC could not be sustained in view of the material on the record. On the other hand, it was argued on behalf of the Revenue that the wastage at 14'50% was excessive. In support of his contention, that the shortage in this year was excessive, the learned departmental representative relied upon the following documents:
'(i) Letter dated March 23, 1972, from the Assistant Director, Ministry of Commerce, Bombay, addressed to the Commissioner of Income-tax, New Delhi.
(ii) Letter dated August 25, 1969, from M/s. G. M. Worstted Spinning Mills, Faridabad, addressed to M/s. Bharat Hosiery Manufacturers Association, Ludhiana.
(iii) Letter No. 14298, dated August 22, 1969, from M/s, Oriental Carpet . to the President, Hosiery Industry Federation, Ludhiana.
(iv) Letter dated May 22, 1969, from Oriental Carpet . to the President, Cottage Hosiery Manufacturers Union, Ludhiana, and President, Ludhiana Hosiery Small Scale Union, Ludhiana.
(v) A statement showing wastage in the cases of (a) Nagpal Woollen Mills, Bombay, (b) Panipat Woollen & General Mills Co. Ltd., Kharar, (c) Mohan Woollen Mills, Amritsar, (d) Swastika Knitting & Spinning Mills, Ludhiana, and (e) Adarsh Spinning Mills, Ludhiana. '
2. The Tribunal did not permit the Revenue to rely on these documents as according to the Tribunal no opportunity was allowed to the assessee to ,rebut the material contained in these documents. Similarly, it was pleaded on behalf of the Revenue that imported wool tops and yarn spun out of such wool tops were being sold at premium and, therefore, it should be held that the assessee also charged premium on sale of imported wool tops and yarn prepared out of such tops. With a view to support this contention, the Revenue sought to rely on the following documents:
'(i) A voluntary disclosure petition dated March 29, 1971, under Section 271(4A) of M/s. York Hosiery Mills, Ludhiana, admitting that they had earned extra profit on sale of imported wool tops.
(ii) List showing the value of yarn sold by the assessee calculated on the basis of rates published in D. S. Kumaria's daily reports. According to this statement on sales of 40,522.189 kg. of yarn, the assessee could have earned extra profit of Rs. 3,83,089. On the balance 9,745 kg. (total sales 50,267 kg.--40,522 kg.), similarly, the assessee could have charged about Rs. 1 lakh. The assessee could thus charge extra profit of Rs. 4,83,089 only in yarn. The profit in wool tops and fibre would be extra.
(iii) A list of rates for different counts of yarn published by D. S. Kumaria on nine different dates in the months of April, May, July, August, September, October, November and December, 1968.
(iv) A statement of D. S. Kumaria recorded on February 19, 1970, by the Appellate Assistant Commissioner in the case of M/s. Fatehchand & Sons, Ludhiana. '
3. This evidence was also not allowed to be relied upon by the Tribunal on the ground that the assessee had not been given an opportunity to rebut the material contained in these documents. The Tribunal gave a number of reasons and partly accepted the appeal filed on behalf of the assessee. The Revenue approached the Tribunal with the prayer that the following questions, which according to the Revenue, are questions of law be referred to this court for its opinion, which application has been dismissed by the Tribunal:
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that neither proviso to Section 145(1) nor Section 145(2) is applicable ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Income-tax Officer had erred in adding Rs. 4,23,038 to the income of the assessee after rejecting his account version ?'
4. The Revenue has approached this court under Section 256(2) of the Act with the prayer that the following two questions be got referred to this court for its opinion ;
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the proviso to Section 145(1) of the Income-tax Act, 1961, was not attracted ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the addition of Rs. 7,72,953 in gross profits of the assessee without making a proper investigation of various facts placed by the Revenue before it ?'
5. After hearing the learned counsel for the parties, we are of the opinion, that this petition must succeed. As has been observed in the earlier part of the order, the Revenue placed implicit reliance on the documents mentioned in the earlier part of the order with a view to sustain the order of the authorities below. It is no doubt true that the said material could not be used against the assessee without the assessee having been given an opportunity to rebut the same but, at the same time, it is not disputed before us by the learned counsel for the parties that the ITO and the AAC did rely on the material before the Tribunal on behalf of the Revenue. That being the position, the Tribunal was duly bound to give an opportunity to the assessee to rebut the material and for that purpose the Tribunal could itself give the opportunity or remand the case so as to do complete justice between the parties. Instead of applying its mind on this aspect of the matter, the Tribunal simply observed that the material sought to be relied upon by the Revenue could not be allowed to be referred to as the assessee had not been given an opportunity to rebut the material. The misdirection of the Tribunal on this aspect, according to Shri Awasthy, the learned counsel for the Revenue, certainly raises a question of law in view of the facts and circumstances of this case.
6. Shri Bhagirath Dass, the learned counsel for the assessee, has vehemently argued that no plea was raised by the Revenue before the Tribunal that the assessee be given an opportunity to rebut the material which was sought to be relied upon by the Revenue and that the same material be taken into consideration and, therefore, this question will not arise out of the order of the Tribunal, we are unable to agree with this contention. The whole matter before the Tribunal was whether the Revenue should be allowed to rely on the material with which the assessee was not confronted by the ITO and the AAC The Tribunal instead of applying its mind as to whether the opportunity should be granted to the assessee by the Tribunal or the case be remanded to the authority below, simply observed that the material could not be allowed to be relied upon as the assessee had not been given an opportunity to rebut the same. It is no doubt true that in so many words the argument that the material should have been allowed to be taken into consideration after giving an opportunity to the assessee to rebut the same does not find mention in the order of the Tribunal ; but it is well-settled that if a number of arguments arise for sustaining or setting aside an order and if one facet of the argument is not noticed, it cannot be successfully contended that the question does not arise out of the order of the Tribunal. Reference in this connection may be made to the decision of their Lordships of the Supreme Court in CIT v. Scindia Steam Navigation Co. Ltd. : 42ITR589(SC) . Their Lordships, to repel a similar contention as has been raised in this case, observed as follows (at p. 612):
' But the appellant contends that while before the income-tax authorities the respondents disputed their liability on the ground that the amount in question had been received in the year previous to the year of account, the contention urged by them before the court was that even on the footing that the income had been received in the year of account, the proviso to Section 10(2)(vii) had no application, and that it was a new question which they were not entitled to raise. We do not agree with this contention. Section 66(1) speaks of a question of law that arises out of the order of the Tribunal. Now a question of law might be a simple one, having its impact at one point, or it may be a complex one, trenching over an area with approaches leading to different points therein. Such a question might involve more than one aspect, requiring to be tackled from different standpoints. All that section 66(1) requires is that the question of law which is referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It will be an over-refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of Section 66(1) of the Act. That was the view taken by this court in Commissioner oj Income-tax v. Ogale Glass Works Ltd. : 25ITR529(SC) and in Zoraster and Co. v. Commissioner of Income-tax : 40ITR552(SC) , and we agree with it. As the question on which the parties were at issue, which was referred to the court under section 66(1) and decided by it under section 66(5), is whether the sum of Rs. 9,26,532 is liable to be included in the taxable income of the respondents, the ground on which the respondents contested their liability before the High Court was one which was within the scope of the question, and the High Court rightly entertained it.'
7. It would thus be seen that there is no merit in the submission of Shri Bhagirath Dass, the learned counsel for the assessee, that the question does not arise out of the order of the Tribunal.
8. As regards question No. I, it cannot be disputed that the admission of the additional material which was disallowed by the Tribunal would certainly change the complex of the findings arrived at by the Tribunal, because if the said material is allowed to be placed on the record after giving an opportunity to the assessee to rebut the same, the documentary evidence, which should have been looked into and relied upon, had been ignored. In that situation, questions Nos. 1 and 2, referred to in the earlier part of the order, would certainly be question of law and are not questions of fact.
9. For the reasons recorded above, we allow this case and direct the Tribunal to render the two questions, referred to in the earlier part of the judgment, to this court, for its opinion. We order accordingly. There will, however, be no order as to costs.