The assessee moved the Commissioner of Income Tax, Madras, to refer to the High Court certain questions of law which he alleged arose in connection with the assessment made by the Income Tax Commissioner. The Income Tax Commissioner being of opinion that no question of law in connection with the said assessment arose declined to make any reference. There upon the assessee moved the High Court and this High Court by its order, dated the 9th March, 1926, directed the Income Tax Commissioner to state a case on three points mentioned in that order. Subsequently the assessee moved the High Court to add a fourth point on which the Commissioner should be directed to state a case, the fourth point being. 'Where, in the absence of accounts, assessment was levied at an agreed figure as the result of negotiations by and on behalf of the assessee and the Income Tax Officer, whether the said assessment can be re-opened under Section 34 of the said state of affairs, namely, absence of accounts or by raising the same question in other words.' The High Court by its order, dated the 25th April, 1927, ordered that the Income Tax Commissioner should state a case with, reference to the fourth point also. When the case went back to the Income Tax Commissioner the learned Commissioner raised a preliminary objection to his stating a case with reference to the fourth point. The preliminary objection to this reference taken by the Commissioner of Income Tax is that the question of law sought to be argued here is one which was not argued before him and that it cannot now be raised by reason of Section 66, Sub-section 2 of the Income Tax Act which permits the assessee to apply within one month of the passing of the order under Sections 31 and 32 of the Act to the Commissioner to refer questions of law to the High Court; and upon his refusal to state the case to apply to the High Court of order directing the Commissioner to refer the case. It is admitted that the assesses did not raise before the Commissioner the question of law he seeks to argue here, viz, question No. 4, within one month of the passing Of the Commissioner's order under Section 34 of the Act. He raised the other question of law arising in the other three questions but not this one and the Commissioner now contends that the assessee cannot be heard upon this question. The facts of the case are that in the previous year's assessment, the assessee was assessed at a figure which the Commissioner subsequently considered to have been too low and he accordingly proceeded to re-assess him under Section 34 increasing the assessment in the previous year. The only questions here are whether the assessee is bound to raise before the Commissioner in his application to him all questions of law relied upon by him and whether he can get a reference upon a question of law not raised by him before the Commissioner. We are clearly of opinion that he cannot do the latter. Under Section 66 (2) of the Income Tax Act the Commissioner may be required by the assessee to refer any question or questions of law arising upon the order. It is we think beyond doubt that that can only mean any question of law then raised before the Commissioner, not any question of law which the assessee may deem to be an arguable one thereafter. This view is also taken by the Allahabad High Court in In the matter of Lalla Mal Hardeo Das Cotton Spinning Mills at page 266 of the Reports of the Income Tax Cases, Vol. I, and In the matter of Makham Lal Ram Sarup at page 416, Vol. I, of the same Reports. If the point of law is not raised before the Commissioner within the time specified by Section 66 (2) it cannot be raised at all and the Commissioner cannot be required to state a case raising that point. This is not an appeal to the High Court. No appeal to the High Court is given by the Act. Questions of Law and not of fact may be referred to the High Court but only subject to the provisions of Section 66, Sub-section 2, which only allows a reference upon such points of law as have been raised before the Commissioner within one month of the passing of the order.
The preliminary objection of the Commissioner to a reference on question (4) succeeds and as the assessee does not propose to argue the other three questions referred it is not necessary for us to pass any orders except to order the assessee to pay the costs of the Commissioner which we fix at Rs. 250.