Law: Income Tax Act, 1922

Section: 66

[Indian Income-tax Act, 1922 (XI of 1922)].......Section 66-Reference to High Court-Jurisdiction-Failure of assessee to put in appearance and file paper book- Order declining to answer reference-High Court, whether functus officio-Held no Application for reference inherent power to recall earlier order when Sufficient cause shown : Upon a reference being made to the High Court at the instance of the appellant-firm, notice was sent to the appellant to file paper books within three months of the receipt thereof. The clerk of the firm received the notice -on May 9, 1970, but he misplaced that notice and consequently the paper books were not filed. The reference came on for hearing on August 26, 1970), when no on, appeared for the appellant-firm. The High Court passed an order declining to answer the reference because the appellant had not in an appearance and had io not filed the paper books, On September 21, 1970, when handing over charge to another, the clerk discovered that the notice had been received from the High Court. Finding on enquiry that the matter had been disposed of on August 26, 1970, the appellant filed an application for permission to file the paper books for rehearing of the reference. The High Court dismissed that application observing that it had become functus officio to entertain the application because of its earlier order declining to answer the reference. On appeal to the Supreme Court : Held, reversing the decision of the High Court, that the Court was not functus officio in entertaining the application for rehearing the reference and disposing of the matter on the merits. A party or its counsel may be prevented from appearing at the hearing of a reference for a variety of reasons. In case such a party shows, subsequent to the order made by the High Court declining to answer the reference, that there was sufficient reason for its non-appearance, the High Court has the inherent power to recall its earlier order and dispose of the reference on merits, There is nothing in any of the provisions of the Income-tax Act, 1922, which either expressly or by necessary implication, stands in the way of the High Court from passing an order for…

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