COMMISSIONER OF INCOME-TAX (CENTRAL), NEW DELHI versus M/S. S. ZORASTER & COMPANY

Citation: [1972] 1 S.C.R. 916 · Decided: 24-09-1971 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Dismissed

Judgment (excerpt)

916 
COMMISSIONER OF INCOME-TAX (CENTRAL), 
NEW DELID 
V. 
M/S. S. ZORASTER & COMPANY 
September 24, 1971 
[C. A. VAIDIAL!NGAM AND P. JAGANMOHAN REDDY, JJ.J 
lncome-tax--Certificate to appeal to Suoren1e Court-Dutv of Hi.eh 
Court in grantinR certificate-No jurisdiction to go behind the finding 
recorded in original judgnlent1 disposing of the Reference. 
A 
B 
In re•pect of the goods supplied by the a"e"ee the Government of 
India paid the price by cheques. 
The cheques drawn on the &eserve 
C 
Bank of India, at Bombay, were received by the aSiCisee at Jaipur. out-
side the taxab!i:~ territories. 
On the question whethet the amounts repre-
sented by the cheques, cashed at Bombay, were taxable in the hands of 
the asse.,ee under the Income-tax Act, 1922. t~o High Court, on refer-
ence, held that the mere fact that the cheques were realised at Bon1bay 
was of no consquence and that in the particular circumstances of Ihe case 
since the cheques were 'received by the asse~ce outside the taxable terri-
tory the amounts covelred by the cheques were received by the assessce at 
D 
that place. Jn dealing with the contention of the revenue that the asse~sec 
must be considered to have received the cheques at Delhi where they v.·ere 
posted, the High Court accepted the finding recorded by the Appellate 
1'ribunal in its supplementary statement that the revenue failed to e~t<.1b-
lish .'he fact of posting of cheques at Delhi. The High Court also recorded 
a fintling that the revenue failed to place any material before the Tribunal 
to prove that the cheques were being Eent by the Government of lndia 
through po•t. 
E 
The revenue filed applications before the High Couet for .arant of 
certificate for appeal to this Court. 
The learned Judges who dealt with 
the~e applications were different from those who dealt with the n.ain 
reference. 
Two alternate grounds \\>ere urged viz., ( 1) the payments by 
cheques wete not made at Jaipur where the cheques were received. but 
at Bombay where they were cashed arid (ii) the cheques were posted at 
Delhi and as the post office acted as the agent of the assessee the pay-
F 
ment was made at Delhi. 
On the first ground the High Court held that 
in view of the decisions of this Court no substantial que11tion of h1w 
remained to be decided; but, granted certificate to appeal on the selond 
ground. it held that the question of law which really arose was whether 
a presumption could be dlrawn under the circumstances of the case that 
the cheques were sent by the Government by post or whether the fact 
of sending the cheques by post had to be positively proved by the Revenue. 
The court also observed that the general question whether a pr.:=sump-
G 
tion under s. 114 illustration (f) of the Evidence Act could be raised 
in cfrcumstailces such as those prescnti::d by the case was likely to arise 
in many future cases not restricted to i!Jcome-tax. 
In this Court a preliminary objection .vas raised as to the maintain-
ability of the appeals on the ground that the certificates granted by the 
High Court were not proper. It was urged th•t the High Court erred in 
ignoring the specific findings recorded by the Tribunal, and accepted hy 
H 
the learned Judge' answering the reference, that the Revenue placed no 
evidence .before it to show that the cheques were po•ted at Delhi, and. 
therefore, there -was no question of any presumption arising under s. 114 
-
A 
B 
c 
D 
E 
C.I.T. v. s. ZORASTER & co. (Vaidialingam, J.) 
917 
illustration (f) of the Evidence Act. Setting aside the order of the High 
Court grantin2 tlJe certificate, 
HELD : (i) In circumstances like the present case the jurisdiction 
of the court at the stage of dealing with application for grant of certificate 
is 1in11ted only to considering whether any substantial question of law arises 
having due regard to the material on record and the discu5'ion on facts 
and law contained in the judgment of the High Court which dealt with 
the appeal or reference or any other proceeding as the case may be .. [924 E] 
(ii) On the findings recorded by the Appellate Tribunal and by the 
High Court no question of applying any presumption under s. 114 of the 
Evidence Act arises for consideration. 
The learned Judges, dealing v.ith 
the application for grant of certificates, had no jurisdiction to go behind 
the finding recorcled in the oriainal judgment disposing of the reference. 
[925 FJ 
(iii) This Court should not be invited to decide any ques

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