Law:

Section:

Section 27 of the Wealth-Tax Act, 1957 - Reference - General principles - Whether High Court in its inherent power, while hearing a reference under section 27, could pass an interim order to direct WTO not to pass a fresh assessment order when in pursuance of the order of remand passed by AAC and confirmed by tribunal, he was under an obligation to pass such an order - Held, no - Whether high court could pass such interim order of stay in exercise of its power under article 227 of the constitution - Held, on facts, no FACTS The WTO passed an order of assessment. The assessee made an appeals before the AAC, who remanded the matter to the WTO for passing a fresh order of assessment. The Tribunal affirmed the AAC's order. On reference, the assessee prayed that the reassessment proceedings under the orders of the AAC and the Tribunal be stayed pending disposal of the reference, as otherwise the present reference may become infructuous. The revenue raised a preliminary objection that while hearing a reference under section 27, the Court acted only in an advisory jurisdiction and could not issue as an interim measure an order either of stay or of injunction, while the assessee contended that the Court had an inherent jurisdiction to grant the relief prayed for and, in the alternative, the prayer be granted under article 227 of the Constitution. HELD Section 66 of the Indian Income-tax Act, 1922 and section 256 of the Income-tax Act, 1961, dealing with reference are in pari materia with section 27 of the Wealth-tax Act. Consequently, cases dealing with the nature of the jurisdiction and the extent and the scope of the power of this Court, under the said sections, would obviously be relevant for determining the nature of the jurisdiction and the extent and the scope of the power of the High Court while hearing a reference under section 27. In view of the law laid down by the Supreme Court in various cases, it is apparent that the only power which the High Court can exercise under section 27 is to give its opinion about the question referred to it in an advisory capacity by answering those questions in favour of the assessee or the department, as the case may be. As far…

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