COMMISSIONER OF INCOME TAX Vs. BALKRISHAM BHATIA

JUDGEMENT

(1.) This judgment will dispose of 13 Income-tax references, viz I.T.R.Nos. 1,4 to 10 and 16 to 20 of 1968 in which a common question of law has been raised by the Income-tax Appellate Tribunal under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the new Act). The applicant is the Commissioner of Income Tax while the respondent who will hereafter be referred to as the assessee is a partner in as many as 15-16 firms. Two of these firms carry on business at Delhi while the other firms carry on business outside Delhi on various places such as Amritsar, Kanpur, Kashgargh, Bombay, Nagpur and Calcutta and other places. The various references relate to different out of station firms.

(2.) Originally the Commissioner had applied to the Tribunal to refer lo the High Court two questions of law arising out of the Tribunal's order dated 20.3.1965 in I.T.R.No. 3253 of 1964-65. The questions read as follows:-

(3.) When the statement of case was being prepared, the assessee brought it to the notice of the Tribunal that the question regarding levy of special surcharge was concluded by a finding of fact and no question of law arose from the order of the Tribunal. But as regards the question of levy of extra penal interest the assessee agreed that the question of law did arise but it should not be referred to in view of the decision of the Supreme Court in M. Chochalingam and M. Meyyan v. Commissioner of Income-tax, (48 ITR 34), where the Supreme Court having held that the levy of penal interest without sending any notice to the assessee was a clear breach of the principles of natural justice and as such illegal.