Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1967 Supreme(SC) 379

SUPREME COURT OF INDIA
J.C. SHAH AND V. RAMASWAMI, JJ.
Commissioner of Income-tax, West Bengal II, Appellant
Versus
Smt. Anusuya Devi, Respondent.
Civil Appeal No. 2457 of 1966,
D/- 28 11-1967
Advocates appeared
M/s. S. T. Desai and B. R. L. Iyengar, Senior Advocates, (Mr. R. N. Sachthey, Advocate with them), for Appellants; M/s. A. K. Sen and R. M Hazarnavis, Senior Advocates (Mr. K. L. Hathi, Advocate ofM/s. K. L. Hathi and Co. and Mr. S. K. Dholakia, Advocate with them), for Respondent.

Advocates:
A.K.SEN GUPTA, B.R.L.Iyengar, K.L.Hathi, R.M.Hajarnavis, S.T.DESAI

The High Court cannot direct the Tribunal to state a case on a question which does not arise out of the order of the Tribunal.

Headnote:
INCOME TAX - Reference under Section 66(2) - Question not arising out of the order of the Tribunal - High Court cannot direct the Tribunal to state a case on that question - 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.
Fact of the Case:

The assessee, Anusuya Devi, encashed high denomination notes of the value of Rs. 5,84,000 in January 1946. In a proceeding for reassessment of the income of her deceased husband, Amritlal, for the assessment year 1945-46, the Income-tax Officer brought the amount of Rs. 5,84,000 to tax as income of Amritlal in the year of account 1944-45 from an undisclosed source. The Appellate Assistant Commissioner agreed with the decision of the Income-tax Officer. The Income-tax Appellate Tribunal upheld the order bringing to tax Rs. 5.84,000 as income an undisclosed source in the account year 1944-45. The High Court of Judicature at Calcutta directed the Income-tax Appellate Tribunal to state a Case on the following question: "Whether the Tribunal erred in law by basing their decision on a part of the evidence ignoring the statement made as regards the withdrawal of Rs. 4,94,000 by 494 pieces of Rs. 1000 notes from the bank?" The Tribunal observed that the extract from the statement incorporated in the petition under Section 66 (1) was materially different from the statement reproduced in the order of the Income-tax Officer and that the Tribunal was not invited to consider at the hearing of the appeal the truth or otherwise of the alleged copy of the declaration incorporated in the petition under Section 66 (1).
Finding of the Court:

The Supreme Court held that the High Court was not competent to direct the Tribunal to state the case on the question which was directed to be referred and dealt with by the High Court. The Court also held that the Tribunal cannot be charged with recording its decision without considering all the evidence on the record, and the High Court was, in the Court's view, incompetent to direct the Tribunal to state the case on the question which was directed to be referred and dealt with by the High Court.
Issues: 1. Whether the High Court can direct the Tribunal to state a case on a question which does not arise out of the order of the Tribunal? 2. Whether 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?
Ratio Decidendi: 1. The High Court cannot direct the Tribunal to state a case on a question which does not arise out of the order of the Tribunal. 2. 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.
Final Decision: The appeal was allowed, and the order passed by the High Court was set aside. The answer to the question was in the negative.

Judgement

SHAH, J. :- One Amritlal died on October 18, 1944. For the assessment year 1945-46 his estate was assessed to tax on a total income of Rs. 22,160 from salary and other sources. In January 1946, Anusuya Devi widow of Amritlal encashed high denomination notes of the value of Rupees 5,84,000, and made a declaration as requiredf by the High Denomination Bank Notes (Denomination) Ordinance, 1948 that

"A sum of Rs. 5,84,000 in notes were made over and/or directed to be made over by the declarant s deceased husband Amritlal Ojha at Rajkot in April, 1944, sometime before his death for the benefit of declarant and her 8 minor sons."

2. In a proceeding for reassessment of the income of Amritlal for the assessment Year 1945-46 the attorney who appeared on behalf of Anusuya Devi stated that "Amritlal was from time to time, during the last 30 years of his life, giving gifts to his wife and also setting apart money exclusively for his wife and children and that the fund so accumulated which remained in a cup board" was found after his death. The Income-tax Officer disbelieved the explanation furnished and brought the amount of Rs. 5,84,000 to tax as income of Amritlal in the year of account 1944-45 from an undisclosed source and with his decision the Appellate Assistant Commissioner agreed.

3. At the hearing of the appeal before the Income-tax Appellate Tribunal, Anusuya Devi-widow of Amritlal-filed an affidavit in which it was stated inter alia:

5. "From time to time during our married life, late Sri Amritlal Ojha used to make presents of cash moneys to me on occasion of birthday of myself and of my sons and daughter by him and also on the occasion of his own birthday and on the anniversary of our marriage.

6. "My husband late Sri Amritlal Ojha used to tell me that these presents of cash money that he made was to make provisions for me and my minor sons and daughter and also to meet the expenses of their education and marriage in the event of his death."

8. "The total amount of the money so paid by late Sri Amritlal Ojha was Rupees 5,84,000. This amount was my stridhan property and was all along in my possession" This affidavit was admitted in evidence by the Tribunal, but the Tribunal declined to admit an affidavit of Gunvantary one of the sons of Amritlal, because in their view an attempt was made to bring on record a large number of new facts which were not disclosed before the departmental authorities. The Tribunal declined to accept the case set up by Anusuya Devil Beside pointing out the discrepancies in the statements made from time to time, which rendered her case unreliable, the Tribunal expressed the view that gifts made during a long period of "20 to 30 years" could not all have been made only in thousand rupee notes. The Tribunal accordingly upheld that order bringing to tax Rs. 5.84,000 as income an undisclosed source in the account year 1944-45.

4. In her application for stating a cast to the High Court on eleven questions set out therein Anusuya Devi asserted that in her declaration under Section 6 of the High Denomination Bank Notes (Denomination) Ordinance, 1946, she had given information pursuant to the arteries as follows:

Reasons for keeping above in high denomination notes rather than in current fixed deposit or securities. No bank account. The amount is held in trust for minors and as prices of securities vary so for greater safety the amount is held in cash for the benefit of the defendant and in trust for the minors.

When and from what source did declarant come into possession of bank notes now tendered. A sum of Rs. 5,84,000 in notes wore made over and/or directed to be made over by the declarant s deceased husband Amritlal Ojha at Rajkot in April 1944 some time before his death for the benefit of the declarant and her eight minor sons. In the latter part of August and beginning of September 1945, Rs. 4,94,000 was deposited with the Bank of India Ltd. at its Bombay Branch and transferred by T. T. to their Calcut

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