FAIRDEAL MOTORS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE are references by the Income -tax Appellate Tribunal, Delhi Bench, under Section 256 of the Income -tax Act (hereinafter referred to as the Act), stating the following questions of law for our opinion :

(2.) IN order to understand the scope and ambit of the references, it may be necessary to state a few facts which have culminated in the order of the Tribunal making refere ices to this court at the instance of the assessees. IN INcome -tax Reference No. 6 of 1973, Messrs. Fairdeal Motors v. Commissioner of INcome -tax, the assessees were registered as a firm under the Act with the following partners sharing profits in the ratio shown against each:

(3.) IN support of the reference, Mr. Sharma, appearing for the assessees, raised two main contentions before us. IN the first place he submitted that no penalty could be imposed on the assessees unless there was a clear finding that they were guilty of wilful non -disclosure or of any negligent act in deliberately concealing their income. It was contended that during the penalty proceedings no inquiry was made into this aspect of the matter as held by this court in Sadiq Ali's case, [1973]92ITR276(J and K) and other cases of the Supreme Court which this court followed. On the other hand, the standing counsel for the revenue submitted that as this point raised by the assessees has not been referred by the Tribunal to this court and could not by any stretch of imagination be said to be contained or included in the questions of law formulated by the Tribunal, this court cannot go into this point. Mr. Sharma, however, cited a large number of authorities in support of the proposition that even if a point of law is not directly mentioned in the questions framed by the Tribunal, but is indirectly included or contained within its ambit it can be raised before the High Court. It is not necessary for us to refer to the authorities cited by the counsel for the assessees, because there can be no dispute with this proposition. The main point is whether the question of wilful neglect or deliberate concealment can be held to be included either expressly or impliedly in the questions of law framed by the Tribunal. A bare perusal of the points referred to us by the Tribunal would convince anybody that this question cannot at all be held to be included in the questions framed by the Tribunal. This point does not appear to have been taken either before the INspecting Assistant Commissioner or even before the Tribunal when the assessees filed their appeal. INdeed, this question was raised for the first time when the Tribunal was moved by the assessees for making a reference to this court, and the Tribunal has expressly refused to make a reference to this court on this point and has observed thus: