Law: Income Tax Act, 1922

Section: 33, 66

Income-tax - Reference - High Court - Order directing reference-Bench hearing reference whether bound to answer ques tion-Power to reframe question-Appellate Tribunal-Appeal-- Omission to consider facts stated for the first time in petition for reference under S. 66(2)-Effect-Indian Income-tax Act, 1922, Ss. 33 & 66. The High Court may only answer a question referred to it by the Appellate Tribunal: the High Court is however not bound to answer a question merely because it is raised and referred. It is well settled that the High Court may decline to answer a question of fact or a question of law which is purely academic or has no bearing on the dispute between the parties or though referred by the Tribunal does not arise out of its order. The High Court may also decline to answer a question arising out of the order of the Tribunal, if it is unnecessary or irrelevant or is not calculated to dispose of the real issue between the tax-payer and the Department. There is also no ground for restricting that power when by an erroneous order the High Court has directed the Tribunal to state a case on a question which does not arise out of the order of the Tribunal. At the hearing of a reference pursuant to an order calling upon the Tribunal to state a case the High Court is not bound to answer the question without considering whether it arises out of the order of the Tribunal, whether it is a question of law, or whether it is academic, unnecessary or irrelevant. Power to reframe a question may be exercised to clarify some obscurity in the question referred, or to pinpoint the real issue between the tax-payer and the Department or for similar other reasons: it cannot be exercised for reopening an enquiry on questions of factor law which is closed by the order of the Tribunal. The appellant, the widow of A, had encashed in January 1946, high, denomination notes of the value of Rs. 5,84,000. In the declaration she had made to the Reserve Bank under the High Denomination Bank Notes (Demonetisation) Ordinance, 1946, she had .stated that a sum of Rs. 5,84,000 in notes was made over and/or directed to be made over by her husband at Rajkot in April 1944, some time before…