TMI Blog2004 (9) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment and order dated March 12, 2003, passed by this court in Income-tax Reference No. 78 of 1995. Mr. Pratik Prakash Banerjee appearing for the applicant has urged that his client was unable to produce the documents which are annexures E and E-1 to this review application, which are new and important matter of evidence on record not within the knowledge of the asses-see/applicant and could not be produced by it at the time of judgment despite exercise of due diligence. He pointed out that the subscription being less than Rs. 20,000, it was not compulsory for the subscribers to furnish their PAN numbers and, therefore, it was just not possible for the assessee to furnish PAN numbers of the subscribers. He had also pointed out that the letters and circulars issued by the Union of India being annexures E and E-1, which are binding on the Department were suppressed by the Department and were not placed before the court and if these documents were produced, the court would not have drawn the inference that has been drawn adverse to the assessee. He then contended that the amount was not a cash credit but was share capital and as such it would not come within section 68 of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquiry was made in hot haste. On remand in the course of the enquiry, opportunity was given to the assessee. It was found that the income-tax file numbers of the promoters, and the directors were disclosed and all those payments were made by cheques except a sum of Rs. 20,000 subscribed in cash by Amarnath Gupta, who was not an income-tax assessee. The rest Rs. 90,88,750 was subscribed by the general public. Despite successive opportunity being given, nothing was disclosed about the identity of the subscribers except furnishing a list of subscribers. On appeal the Commissioner (Appeals) had again remanded the case in respect of shares worth Rs. 3,80,000 for investigation for ascertaining the creditworthiness of the subscriber and the genuineness of the transactions. Whereas the Commissioner of Income-tax (Appeals) disallowed Rs. 19,88,750 under section 68 on the basis of the findings of fact arrived at by him relying on the materials produced. On appeal, the Tribunal had held that since these were paid by cheques, therefore, this could not have been disallowed. In the facts and circumstances of the said case, we had answered question No. 1 in the affirmative, in favour of the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, the court must remain within the jurisdiction that has been conferred on it. It cannot stretch such jurisdiction beyond such statutory provision and assume jurisdiction of its own. This question has cropped up in various decisions before different High Courts as well as the Supreme Court. The law is, by now, settled. The High Court, while exercising jurisdiction under section 256, has no power of review. At the same time, the High Court cannot exercise its inherent power as conceived within the meaning of section 151 of the CPC. Though, however, it can rectify mistakes, which is a power ancillary to the exercise of jurisdiction under section 256 or such limited powers in order to enable the High Court to exercise the jurisdiction properly. The example being orders of adjournment, restoration of matters dismissed in default, extension of time for filing paper book, etc. But it does not include grant of stay of recovery of taxes, etc. It was so held in CIT v. Bansi Dhar and Sons [1986] 157 ITR 665 (SC). In CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC), it was held that the High Court hearing a reference does not exercise appellate, revisional or supervisory ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory provisions. Those are not binding on the courts. The circulars cannot be treated in such a manner contrary to the provisions of law. There cannot be any estoppel against the statute. Admittedly, the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal Act in a quasi-judicial and judicial capacity, respectively, while deciding the appeals against the assessment. While exercising any quasi-judicial or judicial capacity the authorities under the statute are bound by law and not by any administrative instructions, opinions, clarifications or circulars. Law is what is declared by the Supreme Court or the High Court. It is for the court to declare what a particular provision of the statute says and not for the executive. However, this proposition has been observed to be doubtful in Bengal Iron Corporation v. CTO [1993] 90 STC 47 (SC). In any event circulars cannot be utilised for altering the provisions of the Act. It is normally used for the purpose of giving effect to the provisions of the Act. Therefore, omission to consider the circular cannot afford a ground for review to the assessee. In Hindustan Aeronautics ltd. v. CIT [2000] 243 ITR 808, it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct under section 256. Whether section 68 applies to issue of share capital: The last question that was raised by Mr. Banerjee, though not the least, is that this is not a cash credit but a share capital, therefore, the authority could not resort to section 68, which deals with cash credit. Therefore, the whole exercise is without jurisdiction, which can be corrected by this court. This contention cannot be accepted for two-fold reasons. First that in order to establish that this particular transaction is not a cash credit, but a share capital, long drawn argument is necessary and there is possibility of forming two opinions, therefore, this cannot form a ground for review. Secondly, the transaction was given a colour of issue of share capital, but if it is found on fact that the transaction could not be established as a subscription to share capital, though admitted to be so shown, then the entries made in the books of account would not be a share capital. If it is not a share capital, then it would definitely be an entry in the book, which is a credit entry and a credit entry to be treated as cash since it does not form part of the share capital on account of absence of proof ..... X X X X Extracts X X X X X X X X Extracts X X X X
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