RAJMANI DEVI Vs. COMMISSIONER OF INCOME TAX, UP

JUDGEMENT

(1.) This is a reference under 66(3) of the Indian Income-tax Act, XI of 1922. The proceedings in connection with which the reference arose were proceedings under Sec. 27 of the Act and the assessment year was the year 1932-33 ending with Chait 1989. The assessee was one Lala Ramji Das who was a banker and carried on money-lending business on an extensive scale. He maintained his accounts by the year ending on the 15 Chait which corresponds roughly with the financial year. The previous year or the accounting year would in the present case end with the 15 of Chait 1388. When the assessment began Ramji Das was alive, but he died on April 9, 1933, and the application under Section 27 which was submitted by Ramji Das was continued by his widow Mst. Rajmani Devi. The Income tax Officer dismissed the application under Section 27 on April 13, 1934, and an appeal against the said decided was dismissed by the Assistant Commissioner on July 24, 1934. On August 27, 1934, the assessee filed a combined application for review and reference to the High Court. On October 8, 1934, the learned Commissioner refused to state a case and on the application for review he remitted certain issues to the Income tax Officer. We are not concerned in the present proceeding with the result of the application for review. The assessee, then filed an application in the High Court praying that we should require the Commissioner to state a case under Section 66(3) of the Act. By our order dated February 27, 1936, we required the Commissioner to state a case and formulated three questions of law. We mentioned then that the only matter which he had to decide at that state was was whether a question of law arose out of the decision of the Assistant Commissioner, and we were of the opinion that the three questions formulated by us did arise and we did not agree with the opinion of the Commissioner that no question of law arose although counsel for the department also pressed that point before us even at that stage.

(2.) The learned Commissioner has now stated a case and has referred the three question of law which we had ourselves formulated, but once more he has lodged a mild protest questioning our jurisdiction in requiring him to state a case under Sec. 66(3), for he is still of the opinion that a question of law did not arise. He thinks that a question of law is foreign to an appeal pending before the Assistant Commissioner against an adverse order passed by an Income tax Officer under Sec. 27. He says : The expression prevented by sufficient cause in Section 27 involves some definite active cause, making compliance with a notice impossible and not a passive cause such as the opinion that compliance is not obligatory because of rights supposed to be secured under the Act.

(3.) This means that if an applicant wishes to submit that he was prevented by sufficient cause from complying with the terms of a notice, the applicant must allege and prove some such fact as illness or accident etc., and a decision on this point would obviously be a decision on a question of fact. The learned Commissioner is further of the opinion that it is not possible for an applicant to say that he was prevented by sufficient cause from complying with the notice, because the notice was illegal. We may state at the very outset that we cannot agree with the general proposition that it is not possible to evolve a question of law out of the various circumstances mentioned in Section 27 of the Act.