Law: Income Tax Act, 1922

Section: 66

Section 256 of the Income-tax Act, 1961 [Corresponding to section 66 of Indian Income-tax Act, 1922] - High Court - Reference to - Whether there is no obligation upon High Court to decide question of law if party, at whose instance reference had been made is absent when case is called on for hearing - Held, yes FACTS In absence of assessee's counsel, notice was served upon the assessee and an opportunity was given to engage another counsel to represent it in the case. The case came up for hearing but the assessee was absent. HELD It was difficult to accept the position that, where a party at whose instance the reference was made, could have appeared when the case was called on for hearing but did not do, so, the High Court was still obliged to decide the questions of law. A party dissatisfied with the appellate order of the Tribunal on a point of law is entitled to apply for a reference to the High Court for the decision of the question of law. It is at the instance of such a party that the proceeding moves on from the Tribunal to the High Court. But for the application of the party under sub-section (1) of section 66 the case would have ended with the decision of the Tribunal upon the appeal. When the reference comes on for hearing before the High Court, if the party decides not to be present, it is plain that it is not interested any more in the proceedings and does not desire a decision on the question of the High Court. In that event, it is open to the High Court to decline to decide the question of law referred to it. Thus, there was no obligation upon it to decide the question of law, if the party, at whose instance the reference had been made, was absent when the case was called on for hearing. The reference was returned unassessed. Note : The reference was returned. CASES REFERRED TO Arisetty Butchanna v. CIT [1962] 46 ITR 703 (AP), CITv. Gourishankar Lal Singha [1967] 63 ITR 711 (Cal.), CIT v. Pouthen Joseph and Sons [1957] AIR 1957 TC 267, M.M. Ispahani Ltd. v. CEPT [1955] 27 ITR 188 (Cal.) and Tamarind Products v. CIT [1956] 30 ITR 348 (Mad.). JUDGMENT Pathak, J.-This reference has been made at the instance of the assessee under section 66(1) of the…

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