Yahya Ali, J.
1. This is a reference made by the Income-tax Appellate Tribunal in pursuance of the order of this Court in C. M. P. No. 4484 of 1946. We shall set out the question at a later stage. The reference arises out of the assessment for 1942-43 relating to the accounting period commencing from 10th October, 1940, and ending on 29th September, 1941. During that period, two items of cash receipts were brought into the account, namely, a sum of Rs. 10,000 on 26th March, 1941, and a sum of Rs. 5,000 on 2nd April, 1941. The two cash credits were discovered in the personal account designated as the ' cash chest account.' The Income-tax Officer assessed the aggregate sum of Rs. 15,000, as part of the total income of the assessee earned during the accounting year. On appeal before the Appellate Assistant Commissioner, it was argued on behalf of the assessee that the 'cash chest account' had been in existence since 1931, the previous credits had gone to make up the opening balance of Rs. 35,000 disclosed in the account, and that this account and the respective entries therein were noticed by the Income-tax Officer on previous occasions, when they were not questioned. The Appellate Assistant Commissioner called upon the assessee's advocate to furnish particulars as to the name of the ancestor, the date of bequest, the nature of the trust whose income was supposed to have been brought into the 'cash chest account,' the amount left originally, and the amount then in hand. The advocate expressed his inability to furnish those details, virtually refusing to supply any information regarding the source and nature of the two amounts in question. The Appellate Assistant Commissioner thereupon dismissed the appeal. An appeal was brought before the Tribunal, and there also the assessee was questioned about certain entries appearing in the ' cash chest account ' statement from 1933 onwards. But he was unable to show how such a large sum of cash happened to be in the cash chest in charge of the assessee. The appeal before the Tribunal was also dismissed. An application was made under Section 66 (1) by the assessee formulating for reference to this Court as many as seven questions. The application was resisted by the Commissioner who, however, suggested in his reply that if at all any questions were to be referred relating to the unexplained cash credits, they were the two following questions:
1. Whether on the assessee's failure to prove positively the source and nature of amounts of cash received during the year the Income-tax Officer is entitled to draw the inference that the receipts are of an income nature.
2. Whether the burden of proving that such receipts are of an income nature would be on the Income-tax Officer, if the Income-tax Officer failed to notice similar unexplained cash receipts in the accounts of earlier years in the course of the assessment proceedings of those years.
This application was dismissed by the Tribunal as they were not satisfied with the explanation sought to be given on behalf of the applicant with regard to the cash credits of Rs. 15,000 in the relevant accounting year, and they were of the opinion that the said sum was rightly treated as the income of the appellant by Income-tax authorities. On an application made to this Court under Section 66 (2) of the Act, it was brought to notice that the assessee was given to understand that the questions would be referred and was not called upon to state his arguments, that the Tribunal reserved its order and when a copy was served upon the petitioner he found that his application was dismissed on the ground that the questions of law raised by him were covered by a reported decision of the Calcutta High Court. In his application to this Court, the assessee prayed that the Tribunal be directed to state a case on the two questions (extracted above) which had been suggested by the Commissioner in his reply statement in proceedings under Section 66(1) before the Tribunal. He also wanted a further question to be raised with reference to Order 47, Rule 1 of the Civil Procedure Code, but subsequently the assessee's learned Counsel gave it up, and was content with a reference on these two questions. It is thus clear that these two questions have been submitted to us by the Tribunal at the instance of the assessee.
2. The history of the matter had to be set out in order to show that the assessee can have no complaint whatever as regards the frame of the questions. As the questions are framed, it seems to us clear that they can be answered only in one way. The first question postulates that the assessee has failed to prove positively the source and nature of the amounts of cash received during the year, and upon that foundation of fact the question raised is whether the Income-tax Officer is in such a position entitled to draw the inference that the receipts are of an income nature. There cannot be the slightest conceivable doubt that when both the source and the nature of the cash receipts shown in the accounting year have not been proved, the Income-tax Officer cannot draw any other inference except that those two amounts are income receipts. He cannot come to the conclusion that they are capital receipts. If it were held that he should, the result would be that every assessee will be entitled to enter cash credits in his account and refuse to furnish the requisite particulars about its source and nature and insist that those entries should be automatically treated as capital receipts and not as income receipts. The answer to the first question has therefore necessarily to be in the affirmative.
3. It is significant with regard to the second question that it starts with referring to ' such receipts,' which can only mean the receipts adverted to in the first question, to wit, receipts whose source and nature the assessee has failed to prove positively. The second condition pre-supposed in the question is that the Income-tax Officer has failed to notice similar unexplained cash receipts in the accounts of earlier years in the course of the assessment proceedings of those years. The effect of the question, however, is that merely because the Income-tax Officer has failed to observe certain entries in previous years in spite of the assessee having failed to prove the source and nature of those amounts, the burden is upon the Income-tax Officer to prove that such receipts are of an income nature. Put in that form, the only possible answer can be that the burden in those circumstances is not upon the Income-tax Officer. Mr. K. Krishnaswami Aiyangar referred us to Sankaralinga Nadar v. The Commissioner of Income-tax, Madras (1929) 58 M.L.J. 260 : I.L.R. 53 Mad. 420 and contended that there was some sort of estoppel arising against the Income-tax Officer in such circumstances. But the question as framed is that the Income-tax Officer has failed to notice similar cash receipts and not that he went into the matter and came to any definite conclusion with regard to them. The other cases cited by him have no bearing whatever upon the matter under consideration.
4. We must, therefore, as indicated already, answer the first question in the affirmative and the second in the negative. The applicant should pay the costs of the reference, Rs. 250 to the respondent Commissioner.