THE COMMISSIONER OF INCOME TAX, DELHI versus BANSI DHAR & SONS

Citation: [1985] SUPP. 3 S.C.R. 850 · Decided: 19-12-1985 · Supreme Court of India · Bench: V.D. TULZAPURKAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
850 
THE COMMISSIONER 
OF INCOME TAX, DELllI 
v. 
liANSI DHAR & SONS 
DECt:!'lllEK 19, 1985 
[V .D. TULZAPURKAK AND SABYASACHI MUKHARJI, JJ, J 
Indian Income Tax Act 1922 : Section 66 and Income Tax Act 
1901 : Section 256 - High Court - Jurisdiction of - To grant stay 
or pass interim orders in pending references. 
Interpretation of statutes : Words of statute -
Judicial 
c 
construction of words 
by Superior court -
How far useful in 
con~truing identical words in another enactment. 
The Assesse•. was a Hindu Undivided Family. The father of 
the Karta of the HUF died in an air crash. On his death a swn of 
over Rs. 2 lakhs was received by the Karta from the Insurance 
Company on account of the insurance policy covering the life of 
D 
his father. The income ·derived from the said amount was treated 
as his personal income and assessed in his personal assessment, 
and it continued to be assessed in the personal assessment of the 
Karta even after formation of the HUF on his marriage and the 
birth of a son. This position continued till the assessment year 
1959-60. 
For the first time in the assessment yesr 1960-61 the 
Income Tax Officer treated the income from the insurance amount 
as that of the Hlff and assessed the income in the hands of the 
HUF. Being aggrieved the assessee appealed and the Appellate 
Assistant Commissioner set aside the assessment holding that the 
F 
income was the personal income of the Karta and not of the HUF. 
The Revenue preferred an appeal to the Income Tax Appellate 
Tribunal. A similar appeal was also pref erred to the Tribunal by 
the Revenue for assessmev.t year 1962-63. Buth the appeals were 
disposed of by a common order, whereby it was held that the 
G 
income in question was that of the HUF and was liable to be 
assessed as such. 
H 
The Tribunal referred to the High Court at the instance of 
the assessee-HUF the question, "whether the amount received from 
c.r.T. v. BANS! DHAR 
851 
the Insurance 
Company on account of the accident Insurance 
Policy covering the risk of his father was correctly treated as 
ancestral property." The assessee also filed applications for 
injunction and stay under section 151 of the Code of Civil 
Procedure invoking the inherent jurisdiction of the High Court. 
In the applications for stay it was contended that for the 
subsequent years 1963-64 & 1964-65 similar appeals had been filed 
by the Revenue, before the Tribunal and were pending, that for 
the assessment years 1965-66 to 1969-70 the orders of the 
Appellate Assistant Colmlissioner were against the assessee and 
the asseasee-HUF had preferred appeals to the Tribunal which were 
also pending, that in the said appeals preferred by the assessee 
HUF, on application by the assessee the Tribunal had granted stay 
of recovery of the tax demanded, on the condition that the 
assessee should furnish adequate security, that since the matter 
relating to the two assessment years (1960-61 and 1962-63) were 
before the High Court under section 66(1) of the Indian Income 
Tax Act, 1922/section 256(1) of the Income Tax Act, 1961 similar 
order of stay should be granted by the High Court because 
prejudice would be caused to the assessee if in spite of full tax 
being paid by the karta in his personal assessment, the HUF is 
asked to pay tax over again in respect of the same income. 
The Revenue opposed the aforesaid applications for stay, 
contending in its counter-affidavit that under the provisions of 
the Income Tax Acts of 1922 and· 1961 the High Court exercised 
only an advisory or consultative jurisdiction, and consequently 
had no jurisdiction or power to grant stay of the recovery of tax 
as prayed for in the application, and that grant of stay by the 
High Court and this court had in fact been prohibited by the two 
Acts of 1922 and 1961. 
The High Court rejected the preliminary objections raised 
by the Revenue and granted stay of realisation of taxes. It found 
that there should be stay on terms and granted stay on condition 
that the assessee should furnish adequate security for the said 
amount to the satisfaction of the concerned Income Tax Officer. 
In the appeals to this Court: on the question of juris-
diction of the High Court and Supreme Court to grant stay or pass 
interim orders in pending references under section 66 of the 
Indian Income Tax Act, 1922 and section 256 of the Income Tax 
Act, 1961. 
Allowing the Appeals to this Court, 
A 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c 
D 
852 
S

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