COMOF INCOME-TAX Vs. S. M. CHITNAVIS

JUDGEMENT

(1.) THE Commissioner of Income-tax asks for leave to appeal to His Majesty in Council under the provisions of Section 66-A (2), Income-tax Act, 11 of 1922, against the final order of this Court passed on a reference under Section 66 (2) of the Act. The respondent raises a preliminary objection that Section 66-A does not authorize an appeal by the Commissioner of Income-tax to the Privy Council. His ground is that the Commissioner of Income-tax cannot be considered a party as he exercises the functions of a Court in making a reference to the civil Court. We hold that the Income-tax Act, in providing that the Commissioner in proper cases should make reference to the Court, merely provides a convenient procedure for obtaining the decision of a Court with regard to the matter in dispute. When the matter comes before the civil Court the Commissioner of Income-tax is a party. A Collector also can make a reference under the Land Acquisition Act, and it has never been doubted that the Collector is a party in the proceedings of a civil Court. The practice of the Privy Council is sufficient to remove any doubt on this point. In appeals by the assessee the Commissioner of Income-tax is treated as respondent and in Commissioner of Income-tax v. Western Indian Turf Club, Ltd. A.I.R. 192 8 P.C. 1 the Commissioner of Income-tax was considered to be the appellant.

(2.) IN Delhi Cloth and General Mills Go. Ltd. v. Income-tax Commissioner, Delhi A.I.R. 1927 P.C. 242, it was held that the provisions of Section 66 A, Income-tax Act, exclude from any right of appeal cases which fall within the requirements of Section 110 of the Code and are operative to confine that right to cases which are certified to be otherwise fit for appeal to His Majesty in Council. We have, therefore, to decide whether this case is "otherwise" fit for appeal to His Majesty in Council. Their Lordships of the Privy Council in Banarsi Prasad v. Kashi Krishna Narain [1901] 23 All. 227, have stated that the provision authorizing a High Court to certify that the case is fit for appeal "otherwise" is clearly intended to meet special cases: such, for example, as those in which the point in dispute is not measurable by money, though it may be of great public or private importance. The applicant urges that the point in dispute is of great public importance.

(3.) THE sum in dispute in this case is stated to be about Rs. 1,000, but the sums affected in individual oases by exercise of the option, will in most cases be even smaller. In the present case the point in dispute was referred to a Full Bench. We do not consider it likely that a case more suitable for certification will come before this Court in the near future. The counsel for the non-applicant did not urge that the grant of the certificate when the sum in dispute was so small would involve great hardship on his client, and we do not think that the grant does involve undue hardship The amount placed in jeopardy by the grant, is a small fraction of the income of the non-applicant for a single year and the non applicant will not be saddled with the costs of the applicant in appeal unless their Lordships of the Privy Council consider that this is just. We therefore certify that the case is fit for appeal on the ground that the point in dispute is of great public importance. Costs incurred in this Court will be borne as incurred.