THE COMMISSIONER OF INCOME-TAX, BOMBAY versus THE SCINDIA STEAM NAVIGATION CO. LTD.

Citation: [1962] 1 S.C.R. 788 · Decided: 06-04-1961 · Supreme Court of India · Bench: T.L. VENKATARAMA AIYYAR · Disposal: Dismissed

Cited by 2 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

788 
SUPREME COURT REPORTS 
[1962] 
z96z 
The question is whether it could possibly fall with'1n 
Subba,.;;;;;;; Naidu ~he second. pa~t of ?I. (c}, that is, whe.ther the award 
v. 
rs "otherwise mvahd". In order to brmg the objection 
Siddamma Naidu within this clause learned counsel contended that the 
award was bad on its face. It is difficult for us to 
Mudholkar J. appreciate how the award could be said to be bad on 
its face. 
When a dispute is referred to arbitration, 
the arbitrator has to decide it to the best of his judg-
ment, of course acting honestly. Here, in his judg-
ment the arbitrator has allotted to t,he appellant 
certain lands the total area of which is less than half 
that of the entire land in suit. The appellant's con-
tention is that he is entitled to half the entire land. 
This contention was before the arbitrator. In spite of 
that he has made the award in the terms in which he 
has made it. There appears to be no suggestion that 
the arbitrator acted dishonestly. How can it then be 
said that this award is on its face bad? 
Agreeing with the High Court we dismiss this 
appeal with costs to the contesting respondent. 
Appeal dismissed. 
THE COMMISSIONER OF INCOME-TAX, 
BOMBAY 
v. 
THE SCINDIA STEAM NAVIGATION CO. LTD. 
(S. K. DAS, J. L. KAPUR, M. HIDAYATULLAH, 
J.C. SHAH and T. L. VENKATARAMA ArYAR, JJ.) 
Income-tax-Reference-Scope-"Any question of law arising 
out of such order", Meaning of-Indian Income Tax Act, I922 (II 
of I922), as amended by Income-tax (Amendment) Act, I946 (VIII 
of I946), ss. 66, rn(2)(vii) proviso. 
Bys. 66 (1) of the Indian Income-tax Act, 1922 "the assessee 
or the Commissioner may, by application in the prescribed form 
...... require the Appellate Tribunal to refer to the High Court 
any question of law arising out of such order and the Appellate 
Tribunal shal] ... draw up a statement of the case and refer it to 
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... 
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I S.C.R. SUPREME COURT REPORTS 
789 
the High Court." The respondents, who received compensation 
from the Government as owners of a requisitioned steamship 
lost in enemy action, were assessed to tax under the fourth pro-
viso to s. ro(2)(vii) of the Indian Income-tax Act, which was 
inserted into the Act by the Income-tax (Amendment) Act, 1946 
(VIII of 1946) that came into force on May 4, r946. 
Before the 
Tax Authorities the respondents sought to resist the liability on 
the ground that the income was received not in the year of 
account but in the previous year but failed. 
No question as to 
the applicability of the said proviso was either raised before the. 
Tribunal or dealt with by it. The question that was referred 
to the High Court was as follows:-
"\Vhether the sum of Rs. 9,26,532 was properly included 
in the assessee company's total income computed for the assess-
ment year 1946-47." 
In the High Court the respondents contended that the said 
proviso had no application. The appellant took a preliminary 
objection to this contention being raised on the ground that it 
was not raised and argued before the Tribunal but the High 
Court overruled the objection and held that the compensation 
amount was not liable to charge as the proviso in question was 
not in force on the material date. Against this decision the 
Commissioner of Income-tax appealed. 
The point for determination in the appeal was whether the 
High Court in answering a reference under s. 66 could decide a 
question not raised or argued before the Tribunal. 
Held (per Das, Kapur, Hidayatul!ah and Venkatarama 
Aiyar, JJ.), that the jurisdiction of the High Court under s. 66 
of the Indian Income-tax Act is purely advisory and therefore 
different from its ordinary jurisdiction as a Civil Court. It is of 
the essence of such a jurisdiction that the High Court can decide 
only such questio:is as are referred to it and that implies that the 
questions must necessarily be those that the Tribunal had occa-
sion to consider. 
The words "any question of law arising out of such order" 
ins. 66(1) of the Indian Income-tax Act, 1922, do not in the con-
text mean any question of law arising out of the findings in 
the order of the Tribunal but only such questions as were raised 
before, or decided by the Tribunal. 
The Indian Income-tax Act, 1922, is not in pari materia with 
the British Statute and in view of the difference betweens. 66(1) 
and the corresponding provisions of the British Statute no useful 
purpose can be served by referring to English decisions fo

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