CALCUTTA INSURANCE LTD Vs. COMMR OF INCOME TAX

JUDGEMENT

(1.) There are two references before us relating to the assessment of the same assessee for the same assessment year and both at the instance of the assessee, the Calcutta Insurance Ltd. Reference no. 2 of 1946 was made by the Tribunal under Section 66 (l), Income-tax Act, and comprises two questions of law. The application on which the reference was made formulated nine questions, but with regard to seven of them, the Tribunal refused to state a case on the ground either that no question of law arose or that the question was based on an incorrect statement of facts. Thereupon, the company moved this Court under Section 66 (2) of the Act and obtained a direction to the Tribunal to state a case on six of the seven questions, one of which was slightly re-cast. Reference No. 4 of 1947 was made in accordance with that direction. In making that reference, the Tribunal did not submit a fresh 'Statement of the ease'., as the facts relating to the further questions directed to be referred were all to be found in the original statement.

(2.) I have had occasion to comment in the past and find it necessary to comment again on the form in which the Tribunal is often found to draw up the statement of the case. It seems to think that the statement of the case means the judgment on the application for a reference. In the present ease, for example, the original reference was limited only to two questions of law and yet what was sent up ag the statement of the case was the order passed on the application for a reference, containing a discussion, question by question, of all the nine questions formulated. The facts relating to the seven questions, not referred, were entirely different and severable, except to a slight extent in one case, and clearly no reference to them was at all relevant, far less any discussion of the questions on the merits. Then again, the statement of the case ought certainly not to be a judgment on the application for a reference, recounting in detail the whole controversy on the application and the Tribunal's views thereon and covering not only the point as to whether the questions formulated arise or not but also, once again, their merits. The Tribunal may, if it chooses, record an order on the application for a reference and where it declines to state a ease at all or a case on any of the questions formulated, it is perhaps necessary to do so. But when it has reached the stage of Rule 43 of its own Rules an I decided to make a reference or when it has been directed by the High Court to do so, all controversy has been left behind and the statement of the case contemplated by the Rule, as also by Section 66 of the Act, is obviously a separate document of a neutral character which must be limited to the questions referred and in which should be incorporated only the facts relevant to those questions as found by the Tribunal, the contentions of the parties, the decision thereon as recorded in the appellate order and the questions of law which arise. If a model is required, one will be found in the statements drawn up by the General or the Special Commissioners in England, incorporated in the reports in the Tax cases.

(3.) In fairness to the Tribunal in the present case, I must add that it was placed in a difficult position by reason of the manner in which the proceedings were conducted on behalf of the assessee. The assessment was an assessment of an insurance business and the objections related to individual items of deduction claimed by the company or 'add-back's made by the Income-tax Officer. The Tribunal has pointed out that at the stage of the appeal the assessee was unable, in some cases, even to state what the ground of the objection was and at the stage of the application for a reference, questions were raised and debated on an incomplete and incorrect basis of facts. Before us as well as I shall presently show, totally contradictory contentions were put forward in relation to two of the questions.