The High Court's jurisdiction under S. 66(4) of the Indian Income-tax Act is limited to the facts admitted and/or found by the Tribunal and the question which would arise from the Tribunal's order.

Judgment

HIDAYATULLAH, J. : This appeal, by special leave of this Court, is against the judgment and order dated March 24, 1955, of the Punjab High Court by which the High Court, purporting to act under S. 66(4)of the India Income-tax Act, called for a supplemental statement of the case from the Income-tax Appellate Tribunal. The special leave granted by this Court is limited to the question whether the High Court had jurisdiction in this case to call for the supplemental statement.

2. The assessee, Messrs. S. Zoraster and Co., Jaipur consists of three partners. Two of them are coparceners of a joint Hindu family, and the third is a stranger. They had formed this partnership in June, 1940 for the manufacture and sale of blankets, felts and other woollen articles. A deed of partnership was also executed on March 16, 1944. The assessee entered into contracts with Government for the supply of goods, and in the assessment year 1942-43, Rs. 10,80,658 and in the assessment year 1943-44, Rs. 17,45,336 were assessed as its income by the Income-tax Officer, Contractor s Circle, New Delhi. The supplies to Government were made f.o.r. Jaipur by the assessee, and payment was by cheques which were received at Jaipur and were endorsed in favour of the joint Hindu family which acted as the assessee s bankers. The contention of the assessee was that this income was received at Jaipur outside the then taxable territories. This contention was not accepted by the Income-tax Appellate Tribunal, Delhi.

3. The assessee then applied for a reference to the High Court under S. 66(1) of the Indian Income-tax Act, and by its order dated December 10, 1952, the Income-tax Appellate Tribunal referred the following question for the decision of the High Court :

"Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories?"

The Tribunal had stated in the statement of the case as follows :

"The payment was made by the Government of India by cheques drawn on the Reserve Bank of India, Bombay Branch. These cheques were received in Jaipur."

It may be pointed out that in the contract of sale between the assessee and the Government of India the following clause was included to determine the system of payment :

"21. System of payment : - Unless otherwise agreed between the Purchaser and the Contractor payment for the delivery of the stores will be made by the Chief Auditor, Indian Stores Department, New Delhi, by cheque on a Government treasury in India or on a branch of the imperial Bank of India or the Reserve Bank of India transacting Government business."

4. In dealing with the Reference the High Court passed an order under S. 66(4) of the Income-tax Act observing,

". . . . . it would be necessary for the Appellate Tribunal to find, inter alia, whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the Department in the matter."

The High Court thereafter remanded the case to the Tribunal for a supplemental statement of the case on the lines indicated. This order is questioned on the authority of the decision of this Court in New Jehangir Vakil Mills Ltd. v. Commissioner of Income-tax, 1960-1 SCR 249 which, it is claimed, completely covers this case. In that case also, the High Court of Bombay had called for a supplemental statement of the case, and it was ruled by this Court that the High Court had exceeded its jurisdiction.

5. Before dealing with this question, it is necessary to go back a little, and refer briefly to some cases decided earlier than New Jehangir Vakil Mills case, 1960-1 SCR 249 and Jagdish Mills Ltd. v. Commissioner of Income-tax, 1960-1 SCR 236 on which reliance has been placed in this case. In Keshav Mills Co. Ltd. v. Commissioner of Income-tax, Bombay Mofussil, 1950-18 ITR 407 the High Court of Bombay called for a supplemental statement of the case, but it