Law: Income Tax Act, 1961

Section: 256

Income-tax-----Reference---Powers of High Court---Question not arising from order of Appellate Tribunal---High Court cannot answer such a question even if it had directed reference---Indian Income Tax Act, 1961, S.256---Indian Wealth Tax Act, 1957, S.27. The power of the High Court on reference under section 256 of the Income Tax Act, 1961, or section 27 of the Wealth Tax Act, 1957, is limited. It can answer only questions arising out of the order of the Tribunal when a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order. When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it and is, therefore, one arising out of its order. When a question is not raised before the Tribunal but the Tribunal deals with it that will also be a question arising out of its order. When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it. The mere fact that a question has been referred at the instance of the High Court cannot be a ground for answering it. CIT v. Anusuya Devi (Smt.) (1968) 68 ITR 750 (SC) and CIT v. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589 (SC) rel. JUDGMENT D.N. BARUAH, J.---As per direction given by this Court in Civil Rules Nos. 4(M) and 5(M) of 1977 for the assessment years 1968-69 and 1969-70, the . Tribunal has referred the following question under section 27(3) of the Wealth Tax Act, 1957, for opinion of this Court: "Whether on filing of an application under section 18(2-A) of the Wealth Tax Act, 1957, by the assessee before the Commissioner of Wealth Tax for waiver or reduction of penalty imposable under section 18(1)(a) of the Act, there is a legal presumption of lack of reasonable cause for delay in furnishing the return which precludes the assessee from agitating that question in appeal?" The assessee is an individual. The Assessing Officer imposed penalty under section 18(1)(a) of the Act for both the years for late filing of the returns. For the assessment year 1968-69,…

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