GENTLE, C.J. - This reference is made by the Income-tax Appellate Tribunal under Section 66 (1) of the Income-tax Act, at the instance of the Commissioner of Income-tax Madras. The question referred to the Court is the following :-
'Whether in the circumstances of the case where it has been held that the liability of a Hindu undivided family after disruption has been imposed upon the members thereof the order of the Tribunal that the appeal is allowed could be sustained.'
At the outset, learned counsel on behalf of the respondent assessee, raised a preliminary objection that this reference is incompetent and should not have been made by the Tribunal since the application by the Commissioner for a case to be stated, pursuant to Section 66 (1) of the Act, was made after the expiration of sixty days following the passing of the order by the Tribunal. In considering this objection reference is necessary to some material facts.
Prior to 1938, the assessee was the karta of a Hindu undivided family. In that year there was a disruption and partition. Subsequent to that event, the Income-tax Officer, acting pursuant to the provisions of Section 34 of the Act, sought to assess the previous undivided family in respect of income which had been subjected to tax. The assessment was effected on the assessee as karta of the Hindu undivided family. The assessment was upheld by the Appellate Assistant Commissioner. The assessee appealed to the Appellate Tribunal and the appeal was allowed. The order allowing the appeal was made on July 11, 1944. In the statement, expressing the reasons for the order allowing the appeal, it is said 'after the disruption the liability, if any, of the family had been imposed on a firm composed of the members of the divided family; there is no provisions in law for such imposition; the assessment is illegal and, therefore, cancelled.' The Tribunal further observes that the merits had not been considered in light of the view expressed. The order, to which reference has just been made, is clearly one coming within the provisions of Section 33 (4) of the Act.
Section 66 (1) of the Act provides that within 60 days of the date upon which service of an order under Section 33 (4) is made, the assessee or the Commissioner may, by an application in the prescribed form, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order. The exact date upon which the Commissioner was served with the order made by the Tribunal on July 11, 1944, has not emerged, but it was not long after the date of the disposal of the matter by the Tribunal. On October 5, 1944, an application was made to the Tribunal by the Income-tax Officer to correct a statement contained in the statement of facts in the order; the mistake being, that the assessment had been made upon a firm, whereas, in fact, it had been made upon the karta of the late joint family. That application was pursuant to Section 35 (1) and (2) of the Act. Sub-section (1) enables the Commissioner or the Appellate Assistant Commissioner to rectify any mistake, apparent from the record, in an order passed by him. Such rectification can be made within four years from the date of the order. Sub-section (2) makes the provisions of sub-section (1) applicable to rectification of mistakes by the Appellate Tribunal. The application for rectification received disposal by the Tribunal on January 17, 1945, when it directed that in the place of the words 'After the disruption the liability, if any, of the family has now been imposed on a firm composed of the members of the divided family' the following words be substituted : 'The liability, if any, of the family has now been imposed on the disrupted members of the family, by a notice served on a member, who was before the disruption a karta of the family, on behalf of the Hindu undivided family.' Although that rectification was made, there was no alteration in the order of July 11, 1944, allowing the assessees appeal. An application, made by the Commissioner at the same time praying the Tribunal to review or revise its order, was rejected, and properly so.
The effect of the rectification, by substitution of other words in the place of those which had formerly appeared, is, it will be assumed, to make the order of the Tribunal, allowing the appeal, an incorrect order, since a different conclusion would follow from the substituted words what follows from the words which they replaced. The question, which is referred in this case, would have, of necessity, to be answered in favour of the Commissioner. That would be in the absence of the Tribunal having considered the merits. On 7th October, the Commissioner made an application under Section 66 (1) of the Act requiring the Tribunal to refer to this Court the question as to the correctness of its decision in the order of July 11, 1944. That application received disposal on the same day as the application for rectification, namely, January 17, 1945, when the application under Section 66 (1) was withdrawn by the Commissioner and was dismissed. The application to the Tribunal for a case to be stated, in respect of which this reference has been made, was preferred on March 29, 1945. Whilst the application, which was preferred on October 7, 1944, for a case to be stated, was made within the time prescribed by the sub-section, the other application preferred on March 29, 1945, was made after the limitation time of 60 days, provided in Section 66 (1) of the Act, had expired after notice of the order of July 11, 1944, served upon the Commissioner. But it was in time, if the order on the application for rectification made on January 17, 1945, was an order within the contemplation of Section 33 (4) and Section 66 (1).
Learned counsel for the assessee contended that this reference is incompetent sine the application made on March 29, 1945, was not of time and, also, that the rectification directed on January 17, 1945, is not an order in respect of which a case can be stated.
Section 35 has limited application. It enables rectification to be made of any mistake, apparent from the record, either on his own motion by the Commissioner or the Appellate Assistant Commissioner or by the Appellate Tribunal on their own motion, or when such a mistake is brought to their notice by an assessee. Clearly that section does not enable an order to be reversed by revision or by review but permits only some error, which is apparent on the face of the record, to be corrected.
If the contention on behalf of the Commissioner is correct, that when an order for rectification is made there is a fresh order by the Tribunal, then the consequences are somewhat starling. Section 66 (1) enacts that an application to the Tribunal to refer a question of law to this Court shall be made within sixty days of service of notice of the order upon the Commissioner or the assessee, as the case may be; if the application is not made within the specified period of time, then that right has gone and, it follows, the Tribunal has no jurisdiction or authority thereafter to refer any question of law, arising out of its order, to the Court. Rectification pursuant to Section 35 can be made within four years from the date of the order. If the Commissioners contention be correct, then if, after the expiration of the sixty days prescribed in Section 66 (1), some rectification is made to an order, even three or four years later, the right given under Section 66 (1), which has been lost by the expiration of the period prescribed, is revised and either the Commissioner or the assessee, as the case may be, years after the order has been made by the Tribunal, can make an application for a case to be referred to the High Court. That clearly was never the intention of the Legislature. In the present instance, the Commissioner realised the period during which the application was required to be made for a case to be stated, inasmuch as his application was preferred on October 7, 1944, which was well within the period prescribed by section 66 (1) in respect of the other order passed by the Tribunal on July 11, 1944; but that application was withdrawn and dismissed. Now it is sought to obtain, in another way, what was lost when the earlier application was withdrawn. I am unable to accept the argument that the rectification of an error is the passing of a new order, which gives a right to either party to apply to the Tribunal requiring a case to be stated referring a question or questions for the opinion of the High Court arising out of the order in which correction is made. Were it so, even a minor rectification in an order, e.g., of a sum of money or of a date, made after the limitation period in sub-section (1) of Section 66 has expired, would enable an application to be made for a case to be stated in respect of the order, up to four years from the date of its having been made. Further, in the present instances, the rectification was not made by the Tribunal upon its own motion nor at the instance of the assessee, as sub-section (1) of Section 35 requires; but it was made upon an application by the Income-tax authorities.
In my opinion, the time during which an application could have been made to the Tribunal, for a case to be stated to this Court, commenced from the date of service of the notice of the order of July 11, 1944, upon the parties and expired 60 days thereafter. The granting of the application for rectification and correcting the error in the order of January 17, 1945, was not an order within Section 33 (4) of the Act or one in respect of which Section 66 (1) enables a case to be stated. It follows that the application made on March 29, 1945, for the present case to be stated, was out of time and the Tribunal should not have referred this case, with the question in it, to this Court.
Mr. Rama Rao Saheb, on behalf of the Commissioner, contended that, when a case has been stated by the Tribunal to this Court, containing a question, this Court has no province other than to express its opinion and to give its answer to the question; it cannot consider the correctness or otherwise of the reference by the Appellate Tribunal. If that argument is correct, then assuming that the Appellate Tribunal deliberately ignored the provisions of Section 66 (1) and entertained an application for a case to be stated long after the expiration of the limitation period, even when this Court is appraised of that circumstances, it can do nothing save, in effect, abide by the direction of the Appellate Tribunal. That is a position to which I certainly refuse to subscribe.
In support of that contention, reference was made to the observations by their Lordships of the Judicial Committee in Sir Rajendra Narayan v. Commissioner of Income-tax that the function of the High Court in cases under Section 66 of the Act is advisory only and is confined to considering and answering the actual question referred to it. In my view these observations were not made with respect to the right of the High Court to consider the competency of a case referred to it. If the Tribunal improperly or incorrectly makes a reference in violation of the provisions of the statute, this Court is capable of entertaining an objection to the statement of the case and, if it comes to the conclusions that it never should have been stated, this Court is not compelled to express an opinion upon the question referred.
In my opinion, for reasons given, the preliminary objection should prevail and the assessee should receive his costs, Rs. 250.
YAHYA ALI, J. - I agree.
Reference held incompetent.