P.B.GAJENDKAGADKAR, J.

(1) THE short question which this appeal raises for our decision is whether the appellant assessee is resident in the taxable territories within the meaning of S. 4-A (b) of the Income-Tax Act. This question arises in this way.

(2) THE appellant is a registered firm owning a tea estate called The Erin Estate at Galah in Ceylon. The firm consists of seven partners all of whom are permanent residents of certain villages in Tiruchirapalli District. The total sum paid by the partners amounts to Rs. 25,00,000.00 and the same is divided into 147 shares. Out of these 147 shares, Andiappa Pillai owns 50 shares, Veerappa Pillai owns 43 shares, Nagalingam Pillai owns 18 shares and the remaining four partners own 9 shares each. The estate owned by the firm produces tea which is sold to the authorities under the regulations prevailing in Ceylon. Under Cl. (3) of the Partnership Deed. the superintendent Ponnambalam Pillai, who was himself a co-owner in the said estate previously, manages the estate and looks after its working from day to day. Ponnambalam Pillai permanently stays in Ceylon. He looks after the estate from day to day and it is by him that all sales are effected through commission agents by name Cordon and Company. The pass books for the hank account for the estate are kept in his name and he receives the income and makes the requisite disbursement from time to time.

(3) THE assessment proceedings for the assessment years 1939-40 to 1942-43 were started by the Additional Income-Tax Officer, Tiruchirapalli Circle. The appellant submitted its returns before the Income-Tax Officer and claimed that the firm was not resident in British India and so the income arising in Ceylon from the appellants estate was not assessable to tax in India. The Income-Tax Officer rejected the appellants contention and held that the appellant was a resident under the provisions of S. 4A(b) of the Act and so he proceeded to tax the entire income accruing to and arising from the appellants estate in Ceylon. The returns submitted by the appellant were accepted as substantially accurate and the appellant was assessed on its income from Ceylon with some minor adjustments considered necessary by the Income-Tax Officer. The appellant filed appeals against the several assessments thus made before the Appellate Assistant Commissioner of Income-Tax, Tiruchirapalli. These appeals, however, failed and were dismissed. The appellant then went in appeal before the Income-Tax Appellate tribunal. Madras: the tribunal dealt with the appeal for 1941-42 assessment in the first instance and allowed it. The tribunal took the view that the evidence produced in the case showed that the control and management of the appellants affairs was situated wholly without the taxable territories and so it reversed the finding of the Income-Tax authorities that the appellant was a firm resident in the taxable territories. For the other years in question the same order was passed by the tribunal.

(4) AGAINST these orders of the tribunal reference applications were filed by the Commissioner of Income-Tax but these applications were dismissed by the tribunal under S. 66(1) of the Act. Then the Commissioner took up the matter to the High court of Madras under S. 66(2); the High court directed the tribunal to refer the question as to "whether "the assessee firm was resident in British India within the meaning of S. 4A(b) of the Act". Accordingly a consolidated reference was made to the High court and, on 27/03/1951, the High court held that the appellant was a resident in British India and answered the question referred to it in the affirmative. Subsequently the appellant applied for and obtained a certificate from the High court under S. 66A(2) that the present case is a fit one to appeal to the Supreme court of India, That is how this appeal has come before us; and the only point which it raises for decision is whether the appellant is a f