The High Court has inherent jurisdiction to grant stay of recovery of tax pending disposal of reference.

( 1 ) THIS is an application filed by the assessee, Lala Bansi Dhar and Sons, under Section 151 of the Code of Civil Procedure in the two Income-tax References Nos. 82 and 83 of 1973 relating to the assessment years 1960-61 and 1962-63 respectively, praying that this Court may grant an order of injunction restraining the Commissioner of Income-tax (1), Central Revenue, Building and/or his subordinate officers including the Income-tax Officer, Company Circle (III), from enforcing and/or realising the demand raised in the aforesaid assessment years 1960-61 and 1962-63, and from taking any steps for the recovery thereof till the disposal of the References pending in this Court.

( 2 ) FOR a proper appreciation of the above prayers, it is necessary to state the relevant facts. The assessee is a Hindu Undivided Family (hereinafter REFERRED TO to as the H. U. F ). The karta of the H. U. F. is Lala Bansi Dhar. His father, Lala Murli Dhar, died in the year 1949 in an air-crash. On the death of the father, a sum of Rs. 2,49,874. 00 was received by Lala Bansi Dhar from an Insurance Company on account of an accident insurance policy covering the risk to the life of the deceased. The income derived from the said amount was treated as the income of Lala Bansi Dhar and was assessed in his personal assessment. Lala Bansi Dhar was married on 3rd February, 1953, and a son, Tilak Kumar, was born on 3rd February, 1956. The income from the insurance amount continued to be assessed in the personal assessment of Lala Bansi Dhar even after the formation of the H. U. F. on his marriage and birth of a son, and continued to be so assessed till the assessment year 1959-60.

( 3 ) FOR the first time in the assessment year 1960-61, the Income-tax Officer treated the income from the Insurance amount as that of the H. U. F. and assessed the same in the hands of the H. U. F. On appeal by the assessee H. U. F. , the Appellate Assistant Commissioner set aside the assessment holding that the income was the personal income of Lala Bansi Dhar and not of the H. U. F. Against that order, the Revenue preferred TO an appeal to the Income-tax Appellate Tribunal. A similar appeal was also preferred TO to the Tribunal by the Revenue for the assessment year 1962-63. Both the appeals were disposed of by the Tribunal by a common order on 23rd November, 1970, whereby it held that the income in question was that of the H. U. F. and was liable to be assessed as such.

( 4 ) THEN, at the instance of the assessee H. U. F. , the Tribunal REFERRED TO to this Court the following question under Section 66 (1) of the Income-tax Act, 1922/section 256 (1) of the Income-tax Act, 1961, as arising out of the said common order :-

"whether on the facts and in the circumstances of the case, the amount of Rs. 2,49,874. 00 received by L. Bansi Dhar from the Insurance Company on account of the accident insurance policy covering the risk to the life of his father, L. Murali Dhar, is correctly treated as ancestral property of the H. U. F. of which L. Bansi Dhar is the karta?"the two references have since been registered as Income-tax References Nos. 82 and 83 of 1973, and it is in the said References, that the present application for injunction and stay has been filed by the assessee H. U. F. under Section 151 of the Code of Civil Procedure invoking the inherent jurisdiction of this High Court.

( 5 ) IT is stated in the application for stay that for the subsequent assessment years 1963-64 and 1964-65, similar appeals were filed by the Revenue before the Tribunal and the same were pending, that for the assessment years 1965-66 to 1969-7g, however, the orders of the Appellate Assistant Commissioner were against the assessee, and the assessee H. U. F. had preferred TO appeals to the Tribunal which were also pending, that in the said appeals preferred TO by the assessee H. U. F. , on application by the assessee, the Tribunal granted stay of the recovery of the tax demanded on t