LexSHRI KANHAIYALAL LOHIA versus THE COMMISSIONER OF INCOME-TAX, WEST BENGAL
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2 S.C.R. SUPREME COURT REPORTS
839
SHRI KANHAIYALAL LOHIA
v.
THE COMMISSIONER OF INCOME-TAX,
WEST BENGAL
(S. K. Das, M. HIDAYATULLAH and J.C. SHAH, JJ.)
Income-Tax-Appeal from High Court's order-Procedure-
Appeal from order of the Tribunal by,passing High Court's order-
Appeal if competent-Income-tax
Act, 1922(11
~f 1922),
88. 66(1), 66(2) and 66(a).
The appellant supported his brother and his nephew for
a number of years as they were doing no work.
In the year
1943 he made a gift of Rs. 7,60,000 odd to them though he
had to overdraw his account with the Bank and to pay interest
or the amount borrowed to raise the money.
He also made a
transfer of some of his businesses to them. His explanation
was that these gifts were made to set these two persons up in
business. The Income-tax Officer held that the gifts were not
bonafide and he assessed the income of all the businesses in
the hands. of the appellant.
The appellant had produced
letters from some businessmen in support of his case.
One
such person was one M. who was examined by the Income-tax
Officer without notice to the appellant. Later, however, a
copy of the statement of M. was taken by the appellant's coun-
sel and at his request M. was summoned for cross-e~amination
but on the date fixed none appeared for the appellant who
was also absent.
The appellant made a petition under s. 66(1) of the
Income-tax Act to the Tribunal asking that a number of
questions of law be referred to the High Court. Only one
question was referred by the Tribunal which declined to
refer the other questions. In the High Court the question
referred by the Tribunal was answered against the appellant
on the admission of his counsel. The High Court was moved
also under s. 66(2) to order a reference of the remaining
questions but the High Court rejected the application, l"he
appellant did not appeal against these two orders of the High
Court and instead tiled appeals against the orders of the
Tribunal. The appellant relied upon two cases of this Court
viz.
Dhakeshwari Cotton Mills' Gase and Balaev Singh'• case
and contended that the appeal to this court was competent.
Held, that the appeals were incompetent in view of the
decisions of this Court in Ol.'andi Prasad Ohokhani v. State <1f
Bihar and The Indian Aluminium Go., Ltd.
1961
July, 17.
1961
Sh. Kanhaiyalal
Lohia
v.
TM,
Commissioner
of Income-tax,
West Bengal.
M. H idriyatulkth
.T.
Slif'REl\IE f'OlTRT REPOltT8
[1962)
.
!hid. further, that an appeal agaimt an order of the
ll1gh Court deciding a question reli:rred nr ar,ainst ,1 refusal
to call for a statement can only be brought_ before the Supreme
Court under s. 66(A) of the Income-tax Act if the Hiah
Court decides the question referred, and uncle; Art. 136 °0 f
the Constitution if the High Court refuses to call for a state-
ment. There can be no direct appea: to the S11p1eme Court
by passmg the decisions of the High Court.
Hehl. aho, that there was neither anv breach of the
principles ~f natural justice in th is case no; the existence o
circumstances as rxis.ted in Baldr1: Singh.' . ., case to ju~tify the
•ppeal.
Held, that where a witness hag been exarmned by the
Income-'"'' Ofhcer behmd the back of the assessee but a copy
of the statement of the witness is made available, lo the asscsseo
and an opportunity is given to him to cross·,xamine the
witne«, there is no breach of the principle of natural justice.
rJlwndi
Pmsad Chokltani v. State of Bihar. (1962)
~ S.C.R. 276 and Indian Aluminium Co., Ltd., v. Commis-
"ioner 1.f Income-tax.
(Ci1:il Appeal No. 171i of 19511, der.ided
""April 24, /91ilj followed.
Dhakeshwari Cotwn Milk Ltd. v. Commissioner of Income-
tax (1955) i S.C.R. 941 and Sardar Baldev Singh v. Commis-
sumer of Income-tax, Delhi and Ajmer. (1961) 1 S.C.R. 482,
explained.
C1VIL APPELLATE .J t'IH8Dif"l'lO:N :
Civil Appeals
NoH. 347 to 350 of HJ(lO.
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Appeals Ly 8\WOial leave· from the judgment
and order dated .January 18, 1953, of the fncome-
tax Appellate Tribun~l:., ~lcutta Bench, in h1cm!ie-
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tax Appeals NoH. 7062-1064 and C.P.T.A. No. '148
of 1951-52.
!'i. C. Chatterj6e, A. r. l"·ioimuatha Saotri and
/J . .V. iJ:lukherjee, for ihe appcllantH.
I{. N.
Rr~j1Jyop1tl
!·h~tri :iml I I. r htpl1', for
ITtipoudP rit ..
1961.
July 1 i. The Judgment of the Court
was delivered by
HIJJAYATULLAH, J.--These appeals with special
leave were filed by one Kanhaiyalal Lohia, who
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