COMMISSIONER OF INCOME-TAX Vs. JAINARAIN MOTIRAM

JUDGEMENT

(1.) THIS is a case referred for decision to this Court by the Commissioner of Income-tax Under Section 66 (3), Income-tax Act (11 of 1922), upon a requisition made by this Court as per its order dated 16th February 1927. The facts are stated in sufficient detail by the Commissioner of Income-tax in his reference and I need not repeat them here. The assesses had filed a return showing Rs. 20,374-9-6 as his approximate (Ajmasa) income for the year ending Divali 1922. He could not vouchsafe for the correctness of his figures as required by law, as is clear from the word "Ajmasa" (approximately) used by him. This was not accepted, as the Assistant Commissioner himself puts it, "as he was said to have a large trade in cotton." The Assistant Commissioner asked him to produce his account books which being produced were inspected and found to be "unclosed." He was asked to close them, but he pleaded his inability to close them for want of accounts from other firms with which he had dealings.

(2.) AFTER some investigation the Assistant Commissioner assessed him on a total income of Rs. 1,79,905 and by an order dated 20th February 1924 directed him to pay Rs. 17,453-10-0 on account of income-tax and super-tax. The assessee appealed to the Commissioner who ordered reduction of tax by Rs. 2,884-5-0. Not being satisfied he applied to the Commissioner of Income-tax to state his case on points formulated by him but the Commissioner thinking that they did not constitute points of law, asked him to submit a revised petition. But even then the Commissioner was not satisfied, and the assessee then put in a third application through a pleader. Still it was not clear as to what point of law arose out of this case and on what point of law the reference to the High Court was sought.

(3.) THE assessee then presented a petition to this Court setting forth the points of law arising out of the Commissioner's order. Both parties were heard, and this Court passed the order dated 16th February 1927 compelling the Commissioner to make the reference. The Commissioner in submitting the case as ordered has raised a preliminary question and requested this Court to decide it before giving its opinion on the points raised. That question is whether or not an assessee is entitled to move the High Court for a direction to the Commissioner to refer questions of law which have not been raised before him in the course of the proceedings Under Section 66 (2) of the Income-tax Act?