LexTHE NEW JEHANGIR VAKIL MILLS LTD. versus THE COMMISSIONER OF INCOME-TAX, BOMBAY NORTH, KUTCH AND SAURASHTRA.
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S.C.R.
SUPREME COURT REPORTS
249
THE NEW JEHANGIR VAKIL MILLS LTD.
v.
THE COMMISSIONER OF INCOME-TAX, BOMBAY
NORTH, KUTCH AND SAURASHTRA.
(S. R. DAs, C.J., N.H. BHAGWATI and
M. HIDAYATULLAH, ,JJ.)
Income-tax-Reference-Power of Hi~:h C01~rt·-If can direct
investigation on a new qttestion and call for supplementary statetJtt!1~t
of case-Indian Income-tax Act, I9ZZ (XI of 1922), s. 66(4).
This appeal hy special leave was directecl against the order
of the High Court asking the Income-tax Appellate Tribunal
under s. 66(4) of the Income-tax Act to submit a supplementary
statement of case on points, which were never raisecl by the
parties nor decided by the Income-tax Authorities or the Tribunal.
The only question canvassed bi!fore them was whether Ct'rtain
cheques,· which were rec~ived by the assessee at Bhavnagar
having been cashed in British lndia. the monies in respect of
them could be said to have been received in British India. The
Tribunal held that the monies related back to the receipt of the
cheques and were as such received at Bhavnagar. The question
was whether the r<'ceipt of the cheques at Bhavnagar amounted
to receipt of the sale proceeds at Bhavnagar. The High Court
held tl1at the mere receipt of the cheques by post at Bhavnagar
was not conclusive in absence of a further finding as to whether
the cheques were sent by post without any request, express or
implied, having been made by the assessee and observed as
follows,-
" But we cannot shut out the necessary inquiry which even
from our own point of view is necessary to be made in order that
we should satisfactorily answer the question raised in the
Reference. It must not be forgotten that under sec. 66(4) of the
Income-tax Act we have a ·right independently of the conduct of
the parties to direct the Tribunal to state further facts so that
we may properly exercise our advisory jurisdiction."
Held, that the High Court had misconceived its powers under
s. 66(4) of the Act and its decision must be set a!>ide.
Section 66(4) of the Indian Income-tax Act, which must be
read with ss. 66(1) and 66(2) of the Ar.t, did not empower the
High Court to raise a new question of law which <lid not arise
out of the Tribunal's order or direct the Tribunal to investigate
new and further facts necessary to determine the new question
which had not been referred to it under s 66(1) or s. o6(2) of the
Act and direct the Tribunal to !'uhmit supplt>mentary stat<.'ment
of case. Such additions and alterations in the statement of l'ase
ass. <i6(4) of th(' Act ernpower<>d tl1r High Court to flirect, r.onl1\
1l
1959
May I2.
250
SUPREME COURT REPORT::; [1960(1)]
I959
relate only to such facts as already formed part of the record but
were not included by the Tribunal in the statement of the case.
The New jehangir
.
y k"l M'll Ltd
Craddock (H. M. Inspector of Taxes) v. Zet•o Fmance Co. Ltd.,
a'
' s
· (1946} 27 T.C. 267; Commissioner of Income-tax, West Bengal v_
Th C v. . .
State Bank of India; [1957] 31 I.T.R. 455; Industrial DeveloJ.me1tt
e ommtss,oner
. .
1'
and Investments Co., Ltd. v. Commzss~oner or Excess Profits Tax,
of Income-tax
'J
Bombay, [1957] 31 I.T.R. 688; Vadilal Ichhachand v. Commissioner
of Income-tax, Bombay North, Kutch and Saurashtra, Ahmedabad,
[1957] 32 I.T.R. 569 and Commissioner of Income-tax v. Bhurangya
Coal Co. [1958] 34 I.T.R. 802, referred to.
Commissioner of Income-tax, Bihar & Orissa v. V isweshwar
Singh, [1939] 7 I.T.R. 536 and Sir S.under Singh M ajithia v.
Commissioner of Income-tax, C. P. and U. P. [1942] ro I.T.R. 457,
considered.
CIVIL APPELLATE JuRISDICTION:
Civil
Appeal
No. 50 of 1957.
Appeal by special leave from the judgment and
order dated September 23, 1955, of the Bombay High
Court in Income-tax Reference No. 19 of 1955.
R . .!_. Kolah and I. N. Shroff, for the appellant.
H. N. Sanyal, Additional Solicitor-General of India,
K. N. Rajagopala Sastri and D. Gupta, for the respon-
dent.
1959. May 12. The Judgment of the Court was
delivered by
Bhagwa« J.
BHAGWATI J.-This appeal with ~pecial leave arises
out of a .judgment and order of the High Court of
Judicature at Bombay dat.ed September 23,
1955,
delivered in Income Tax Reference No. 19 of 1955
made by the Income-tax Appellate Tribunal (herein-
after referred to a.s " the Tribunal ") to the High Court
under s. 66(1) of the Indian Income-tax Act (XI of
1922)-(hereinafter referred to as "the Act") wherebExcerpt shown. Read the full judgment & AI analysis in Lexace.