1. This reference under Section 66(1) of the Indian LT, Act, 1922, was heard previously by a Division Bench of this court. Question No, 1 was answered against the revenue, whereas questions Nos. 2 and 3 were answered in its favour. The Commissioner then preferred an appeal to the Supreme Court on question No. 1. The Supreme Court allowed the said appeal by its judgment dated October 11, 1966, which is reported in CIT v. East Coast Commercial Co. Ltd. : 63ITR449(SC) . The Supreme Court was, however, unable to answer question No. 1 and after setting aside the order under appeal directed the Tribunal to submit a supplementary statement of the case to this court to enable us to answer question No. 1. The Tribunal has submitted a supplementary statement of the case and hence this matter is now before us.
2. The assessment years involved are 1950-51 and 1951-52. The assessee is a company. The question No. 1 is as follows :
' (1) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the assessee-company was one in which the public are substantially interested within the meaning of Section 23A of the Indian I.T. Act '
3. The relevant portion of the Expl. to Section 23A(1) of the Indian I.T. Act, 1922, as it stood prior to its amendment in 1955, reads as follows :
' For the purpose of this sub-section, a company shall be deemed to be a company in which the public are substantially interested if shares of the company.........carrying not less than twenty-five per cent. of the votingpower have been allotted unconditionally to, or acquired unconditionally by, and are at the end of the previous year beneficially held by, the public ......and if any such shares have in the course of such previous year beenthe subject of dealings in any stock exchange......or are in fact freelytransferable by the holders to other members of the public.'
4. The reason for which their Lordships of the Supreme Court could not answer question No. 1 was that the Tribunal did not make any enquiry as to whether the members of Kedia family, who are holding 4,015 shares out of 4,391 shares of the company, were ' acting in concert in relation to the affairs of the company which establishes the existence of a block '.
5. Mr. N. C. Mukherjee, the learned counsel for the company, wanted to reagitate questions Nos, 2 and 3 before us, but we did not allow him to do so for the reasons, inter alia, as follows : (i) these two questions cannot be reopened before us, for the Division Bench has already answered them against the company; (ii) the company was satisfied with the answer to these two questions and did not prefer any appeal to the Supreme Court ; (iii) the appeal before the Supreme Court was solely confined to question No. 1 and the Supreme Court has set aside only that part of the order of the High Court which was under appeal before it ; (iv) any appeal by the company from the judgment dated 17th August, 1962, of the Division Bench on these two questions to the Supreme Court is today barred by limitation and if we allow Mr. Mukherjee to reagitate them and decide these two questions de novo we would take away the right which is now vested in the Commissioner by lapse of time; and (v) the said judgment dated August 17, 1962, has become final on questions Nos. 2 and 3 between the parties and, therefore, the company is bound by it.
6. Now, before a company can be said to be a company in which the public are substantially interested within the meaning of this Expl. there must be a group of shareholders acting in concert in relation to the affairs of the company holding 75 per cent. or less of the total number of shares of the company which may control the voting as a block as stated by their Lordships of the Supreme Court in their aforesaid judgment.
7. Therefore, Dr. Pal, the learned counsel appearing with Mr, Mukherjee, has argued that this company was not (sic) a company in which the public were substantially interested, for according to Dr. Pal, the members of the Ke'dia family were not holding 4,015 shares but were holding 3,115 shares out of 4,391 shares of the company and, therefore, they were holding less than 75 per cent. of the share capital of the company. But we reject his contentions, for they are against what their Lordships of the Supreme Courthave said : 63ITR449(SC) . Briefly speaking, their Lordships have held that by taking into account 900 shares of the company which were transferred in the name of Durgadutt Jhunjhunwalla, who was the benamidar of the members of the Kedia family, the total number of shares held by the members of the Kedia family was 4,015 shares, and this holding was in excess of seventy-five per cent. of the total number of the shares issued by the company.
8. In the supplementary statement of the case it has, inter alia, been-stated by the Tribunal that ' having regard to the normal course of human conduct, we consider that the Kedia family members have acted in concert '. Therefore, Dr. Pal has attacked this conclusion on the ground of perversity. But when we pointed out to him that no provision has been made in the I.T. Acts to challenge any conclusion reached by the Tribunal and stated in the supplementary statement of the case, Dr. Pal gave up this point in the same way as it was ' rightly ' given up before the Supreme Court by Mr. B. Sen, the learned counsel for the revenue, in the case of CIT v. Sahu Jain Ltd. : 103ITR135(SC) of the report. Dr. Pal has requested us to record his suggestion, namely, that this lacuna in the I.T. Acts may be removed for the benefit of the Commissioner and the assessees as well if the attention of the appropriate authorities is drawn to it by the CIT, Calcutta.
9. Dr. Pal has argued that, in view of the facts stated by the Tribunal in paragraphs 12, 18, 19 and 20 of the Supplementary statement of the case, we should draw the inference, namely, that members of the Kedia family were not acting in concert and as such there was no existence of any block. It is also his submission that such inference can be drawn by this court though it may be contrary to or inconsistent with the aforesaid inference drawn by the Tribunal.
10. On the other hand, Mr. B. L. Pal, the learned counsel for the revenue, has contended that the said inference drawn by the Tribunal should not be disturbed in view of the finding of the AAC that ' only two or three members of the Kedia group, viz., Shri Prohladrai Kedia; Shri Madan Gopal Kedia and Shri Mahabir Prosad Kedia, controlled the affairs of the company '. It is also his submission that the above finding was made by the AAC after taking into consideration the attendance of the shareholders in the annual general meetings of the company from 1946 to 1950 and, therefore, question No. 1 should be answered in the negative. He has argued that in view of the decision of the Supreme Court in Sahu Jain's case : 103ITR135(SC) , it should also be held that the members of the Kedia family holding a lion's share in the share capital of the company have failed to discharge the onus by adducing positive evidence that they were not acting in concert in relation to the affairs of the company.
11. In reply. Dr. Pal has argued that in view of the larger Bench decision of the Supreme Court in the case of CIT v. Gangadhar Banerjee & Co. (Private) Ltd.  97 ITR 176, it should be held that the burden is on the revenue to prove that the Kedia shareholders were acting in concert in relation to the affairs of the company and the revenue has failed to discharge it.
12. Now, the above fact relied on by Dr. Pal from the order of the AAC was also present before the Supreme Court and in spite thereof their Lordships : 63ITR449(SC) , have said :
' It was for the Tribunal to determine having regard to ordinary human experience whether it may be safely taken that the members of the Kedia family must have acted together as a controlling block. That enquiry has not been made, and the case has been decided on the application of a test which is erroneous. We are, therefore, unable on the statement of the case to answer the question referred.'
13. Hence, the said contention of Dr. Pal must fail. In Sahu Jain's case : 103ITR135(SC) of the report, their Lordships say this :
' When a company is composed mostly of family members owning a lion's share in the entire share capital of the company the onus to keep clear of the reach of Section 23A(1) will be on the shareholders by adducing some positive evidence about the absence of control by the controlling shareholders.........When the reality is manifest some reliable evidence withinthe special knowledge of the assessee must be forthcoming from its side to contradict the obvious in order to be covered by the exception.........Having regard to the intimate relationship of the shareholders, with not the least evidence of any disconcert amongst them, the ordinary expectation for individual profit in commercial undertakings, natural reluctance to forgo the same, the history of the company and its continued smooth working in a manner which is normally inconsistent with anything other than full unison amongst the shareholders in decisions about the conduct of the company's affairs in common interest of all, this was a company of one paramount mind operating without the least doubt. The board's meetings are evidence of a well-organised, well-knit, close unity of views in all affairs and which in the ordinary course of human conduct would not have been at all possible but for a single or concerted action in the company's management by a controlling group. When all the above conditions are present in a company, the onus would be on the assessee to satisfy by some reliable evidence thatwhat appears on the surface is that which is real. That is not to say that the revenue has no burden to bring the case within the mischief of Section 23A.' (underlining is for emphasis).
14. Therefore, there is no conflict between Sahu Jain's case : 103ITR135(SC) and Gangadhar Banerjee's case : 57ITR176(SC) , in which at page 184 of the report, it has been observed :
' Section 23A of the Act is in the nature of a penal provision......Therefore,the revenue has strictly to comply with the conditions laid down thereunder. The burden, therefore, lies upon the revenue to prove that the conditions laid down thereunder were satisfied before the order was made : see Thomas Fattorini (Lancashire) Lid. v. IRC  AC 643 ;  11 ITR (Supp.) 50 .'
15. In Sahu Jain's case : 103ITR135(SC) the Supreme Court has followed its earlier decision in the case of CIT v. Jubilee Mills Ltd. : 48ITR9(SC) . In Jubilee Mills's case : 48ITR9(SC) of the report, it has been said :
' The test is not whether they have actually acted in concert but whether the circumstances are such that human experience tells us that it can safely be taken that they must be acting together. It is not necessary to state the kind of evidence that will prove such concerted actings. Each case must necessarily be decided on its own facts.'
16. East Coast Commercial Company's case : 63ITR449(SC) was also followed in Sahu Jain's case : 103ITR135(SC) in which the decision of the Supreme Court in the case of Raghuvanshi Mills Ltd. v. CIT : 41ITR613(SC) was also followed. Only 551 shares out of 10,000 shares of Raghuvanshi Mills were held by the members of the public and the remaining shares were held by its eight directors and their relations. It was held by all the authorities below and the High Court that it was not a company in which the public were substantially interested but it was set aside by the Supreme Court with a direction on the High Court to decide it with a further direction on the High Court to call for a supplementary statement of the case, if necessary, from the Tribunal.
17. In view of all these decisions of the Supreme Court it must be held that it is only When the revenue has brought some relevant materials on the record from which a legitimate inference can be drawn to the effect that a group of shareholders holding more than 75% of the shares of a company have acted in concert in relation to the affairs of the company, the company must disprove it by producing relevant materials and by adducing cogent evidence in its possession to the satisfaction of the Tribunal.
18. In the premises, the rival contentions mooted before us on the onus of proof must fail and the question No. 1 must be answered, if possible, on the facts stated by the Tribunal in the statement of the case and in the supplementary statement of the case and not by the mere technicalities of the rules of evidence relating to the onus of proof.
19. The facts stated by the Tribunal in these two statements of the case are solely confined to the holding of shares by the members of the Kedia family and their common interest in the firm of ' Mohanlal Murarilal '. And only from those facts, inter alia, the following inference was drawn by the Tribunal.
'Having regard to the continued association of the members of the Kedia family in joint business even after the partition (e g., Mohanlal Murarilal) they could be taken to be acting in concert.'
20. The above inference was drawn by the Tribunal without making any enquiry as to the ' conduct ' and the activities of the Kedia shareholders ' in relation to the affairs of the company '. The Tribunal did not take into account the resolutions of the board of directors of the company and the proceedings in the annual general meetings of the shareholders of the company. It has been stated in Sahu Jain's case : 103ITR135(SC) that the resolutions of the board of directors and the proceedings of the company are relevant considerations for determining this issue. The Tribunal also overlooked ' the ordinary expectation for individual profit in commercial undertakings ' and the ' natural reluctance to forgo the same.' These two facts have also important bearing on this question as stated in Sahu Jain's case : 103ITR135(SC) .
21. Copy of the minutes of the proceedings of the meeting of the directors of the company held on 6th March, 1950, was also not considered by the Tribunal. It is printed in the paper book. It records that Madan Gopal Kedia, who was the managing director of the company, gave up certain commission which he was entitled to receive under the relevant ^articles of the company. This is also a relevant fact, for in Sahu Jain's case : 103ITR135(SC) it has been stated that ' natural reluctance to forgo ' the individual profits is a relevant consideration. Moreover, what attitude was taken by the Kedia shareholders on controversial issues regarding the management and the affairs of the company and how they have behaved and acted on similar issues concerning the company are wholly unknown to us, for the Tribunal did not apply its mind to these matters.
22. The judgment in Sahu Jain's case : 103ITR135(SC) was delivered after the supplementary statement of the case was submitted by the Tribunal. The direction of the Supreme Court regarding the enquiry was not properly appreciated by the Tribunal. In these circumstances, the relevant facts and the materials on question No. 1 are not before this court. Hence, the rival contentions mooted before us must fail, for we are unable to answer this question for the reasons sufficiently indicated herein.
23. Accordingly, we direct the Tribunal to submit within 6 months from the date of the receipt of this judgment and this order a further supplementary statement of the case to this court under Section 66(4) of the IndianI.T. Act, 1922, and such statement shall contain the relevant facts and the materials as indicated in this judgment and also the conclusions of the Tribunal on these facts as directed by their Lordships of the Supreme Court in the judgment reported in : 63ITR449(SC) . The parties shall pay and bear their own costs.
Dipak Kumar Sen, J.
24. I agree.