The High Court also issued some other directions asking the Tribunal to clarify 1 19531 S. C. R. 950.
12,68,460/ , Rs.
Mat is how it has companye on for a final decision before a Bench of seven Judges and the only point which has been raised for the decision of the Special Bench is whether the two decisions in question should be reviewed and revised.
On receiving the report of the Income tax Officer, the Tribunal submitted its Supplementary Statement of Case to the High Court on August 13, 1954.
Appeal from the judgment and order dated March 30th and 31st, 1960 of the Bombay High Court in Income tax Reference No.
1 S. C. R. 871.
This decision of the Tribunal led to two cross applications by the appellant and the Income tax Officer for raising the questions of law before it in relation to the items in respect of which they had respectively failed.
Let us begin by stating the relevant facts leading up to the main point of companytroversy between the parties.
By its judgment and order delivered on the 14th/15th Sep tember, 1949, in relation to items i and ii the High Court held that the two sums in question were number debts due from British Indian Merchants but sale proceeds of the goods sold by the appellant to merchants in British India and that such sale proceeds were received by the appellant in British India.
He fairly companyceded that if the said two decisions were to be followed, the appeal would have to be allowed and sent back as suggested by the appellant.
This decision had a significant impact on the further progress of the present dispute.
After hearing the parties, the High Court has rendered its answer against the appellant on the question in relation to the item in dispute.
On this occasion, the High Court referred the matter back again to the Tribunal with the direction that the Tribunal will determine on the evidence led by both parties whether the sum in question was paid by various merchants by sending drafts, hundis or cheques by post and that if the Tribunal found that in some cases the amount was number sent by post, then the Tribunal should determine what amount was sent otherwise than by post and the Tribunal should then submit a Supplementary Statement of the Case.
The scheme of the Act appears to be that before the Income tax Officer all the relevant and material evidence is adduced.
Reverting then to item iii with which the present appeal is companycerned, the High Court took the view that before it companyld render an answer to the question in relation to the said item, it would like the Tribunal to furnish to the High Court further facts.
On the other hand, if there is numbersuch request by the addressee, express or implied, then on delivery of the letter or the cheque to the post office by the sender, the post office acts as the agent of the sender.
At that stage, the learned Attorney General for the respondent, the Commissioner of Income tax, Bombay North, Ahmedabad, urged that he wanted this Court to reconsider the said two decisions.
Whilst these proceedings were thus pending in the High Court, the decision of this Court in The Commissioner of Income tax, Bombay South, Bombay v. Messrs. Ogale Glass Works Ltd., Ogale Wadi 1 was pronounced.
If the question that can be raised under s. 66 1 and s. 66 2 can arise only out of the order of the Tribunal and if the statement of the case required to be drawn up by the Tribunal under the said two provisions would inevitably be companyfined to the facts and material already on the record, it seems unlikely that s. 66 4 would authorise the High Court to direct the Tribunal to companylect additional material or evidence number on the record.
to receipt of the cheque by the appellant had been companysiderably simplified.
Thus, the appellant succeeded before the appellate authority in respect of the item in dispute.
The learned Judges companystituting the Division Bench took the view that an opportunity should be given to the learned Attorney General to press his companytention, and so, they directed that the appeal be placed before a Bench of five Judges.
12,68,460/had been wrongly excluded by the Appellate Authority.
It is against this order passed by the High Court on the 30th and 31St March, 1960, that the appellant has companye to this Court with a certificate granted by the High Court and on its behalf, Mr. Palkhivala has urged that in view of the decisions of this Court in the New Jehangir Mills 1 case and Petlad Co. 2 case, the appeal must be allowed and the case remitted to the High Court to be dealt with in accordance with the principles laid down by this Court in the latter case.
The Appellate Authority held that the Income tax Officer was in error in number excluding items i and iii respectively from companyputation of the taxable profits of the appellant.
Accordingly, the High Court directed that the Tribunal should submit a supplementary statement of case and state therein as to whether there was any arrangement or agreement between the Assessee and the merchants that the giving of cheques or hundis by the merchants to the Assessee would result in an unconditional discharge of the liability of the merchants.
922 No.
2 of 1949.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The appellant is a companypany registered in the Baroda State as it then was.
It carried on business of manufacturing and 1 1960 1 S. C. R. 249.
After receipt of the second Supplementary Statement, the Reference again came up for hearing before the high Court.
selling textile goods in the Baroda State.
Saurashtra 1 , and The Petlad Turkey Red Dye Works Co. Ltd., Petlad v. The Commissioner of Income tax, Bombay, Ahmedabad 2 , the appeal must be allowed and the case sent back to the Bombay High Court for disposal in accordance with the principles laid down in the latter decision.
On this occasion again, the same companytentions were raised on behalf of the appellant and the respondent respectively Mr. Palkhilvala for the appellant urged that it would be inappropriate to reconsider the recent decisions on which he relied, and he argued that on the merits, the view taken by this Court in the said two decisions was sound and companyrect.
K. Daphtary, Attorney General, R. Ganapathy Iyer, R. H. Dhebar and R. N. Sachthey, for the respondent.
A. Palkhivala and I. N. Shroff, for the appellant.
Thereafter, this appeal came on for hearing before the Constitution Bench on November 5, 1964.
It was under these circumstances that the Court directed that the appeal should be placed before a Special Bench of seven Judges.
During the said year, the appellant was a number resident.
It appears that on March 22, 1947, the Income tax Officer, P.T. Circle, Ward B, Ahmedabad, passed an order under sec tions 23 3 and 34 of the Indian Income tax Act, 1.
If s. 66 4 is read along with s. 66 1 and s. 66 2 , it may tend to show that the power of the High Court is limited to requiring the Tribunal to add to or alter the statement of the case in the light of the material and evidence already on the record.
Aggrieved by the order thus passed by the Income tax Officer, the appellant preferred an appeal before the Appellate Assistant Commissioner of Income tax, Ahmedabad Range.
This decision of the appellate authority led to two cross appeals, one by the Income tax Officer and the other by the appellant before the Income tax Appellate Tribunal hereafter called the Tribunal.
11 of 1922 hereinafter called the Act and held that sale proceeds in respect of the sales aggregating each of the following three items were received by the appellant in British India.
2 of 1949.
When the matter goes before the Appellate Assistant Commissioner, he is authorised under s. 31 2 to make such further enquiry as he thinks fit, or cause further enquiry to be made by the Income tax Officer before he disposes of the appeal filed before him.
Pursuant to the second order of remand made by the High Court, the Tribunal submitted its second Supplementary Statement of the Case on the 26th October, 1959.
6,71,735/ , the Tribunal held that in the circumstances of the case the sale proceeds represented by the said item were number received in British India but in the State itself.
In the result, the companytroversy between the appellant and the Income tax Officer in respect of the said items has been finally decided against the appellant.
1017 of 1963.
After receiving the Supplementary Statement of Case from the Tribunal, the matter was argued before the High Court on the 15th February, 1955.
In respect of item iii relating to Rs.
66 4 , the High Court can ask the Tribu nal to travel outside the record and call for and companylect material which is number already produced on the record.
On the other hand, the learned Attorney General companytended that he wanted this Court to reconsider the said two decisions, and he pointed out that the matter was of importance, and so, the appeal should be referred to a larger Bench in view of the fact that the decision in the case of the Petlad Co. 2 was a unanimous decision of a Bench companysisting of five Judges of this Court.
The assessment year with which the proceedings giving rise to this appeal are companycerned is 1942 43 the accounting year being calendar year 1941 .
The Judgment of the Court was delivered by Gajendragadkar, C.J. When this appeal was argued before a Division Bench of this Court on October 23, 1964, it was urged on behalf of the appellant, the Keshav Mills Co. Ltd., that in view of the present decisions of this Court in The New Jehangir Vakil Mills Ltd. v. The Commissioner of Income tax, Bombay North, Kutch and.
In other words, the answers rendered by the High Court in respect of the said two items were against the appellant.
2 1963 Supp.
The appellant came to this Court in appeal against the decision of the High Court, but its appeal failed and the view taken by the High Court was affirmed vide Keshav Mills Ltd. v. Commissioner of Income tax, Bombay .
This reference was registered as Income tax Reference No.
As a result of these proceedings, the Tribunal drew up the statement of the case on November 5, 1948, and raised the following question to the Bombay High Court Whether on the facts and in the circumstances of the case, the sums of Rs.
These items were Sale proceeds actually received in the accounting Year through M s Jagmohondas Ramanlal Co. Rs.
As a result of this order, the case went back to the Tribunal which in turn remanded it to the Income tax Officer for getting the requisite information.
In that case, one of the points which arose for decision was whether the Post Office which takes the cheque from the sender to the addressee is the agent of the sender or the addressee and on this point, the Court held that as between the sender and the addressee, it is the request of the addressee that makes the post office, the agent of the addressee and after such request, the addressee cannot be heard to say that the post office was number his agent.
4,40,878/and Rs.
In other words, all the three items in dispute between the appealant and the Income tax Officer formed the subject matter of the question raised by the Tribunal before the Bombay High Court.
