1971 (8) TMI 23 - SC - Income Tax

Transfer of property - High Court instead of answering the question formulated two other questions - Supreme Court held that the High Court had no jurisdiction to raise new questions of law. The questions raised by it did not flow from the question referred by the Tribunal - HC could call for a fresh statement of case and direct the Tribunal to submit for its opinion the real question arising from the decision

Summary

Issues:
1. Whether the income from the property transferred to the assessee's wife for a consideration of Rs. 1 lakh could be assessed in the hands of the assessee under section 16(3) of the Indian Income-tax Act, 1922Rs.

Analysis:
The case involved an appeal arising from a decision of the High Court of Madhya Pradesh regarding the assessment of income from a property transferred to the assessee's wife. The assessee, a Muslim, claimed that he had transferred the property to his wife for a consideration of Rs. 1 lakh to discharge his meher. The Income-tax Officer initially rejected the claim, considering the transaction as a gift. However, the Tribunal later concluded that the transfer was genuine and valid, and the wife was in possession of the property since the transfer. The Tribunal sought the High Court's opinion on whether the income from the transferred property could be assessed under section 16(3) of the Act.

The department raised questions before the High Court, questioning the validity of the transfer and the increase in dower debt from Rs. 10,000 to Rs. 1,00,000. The High Court reframed the questions raised by the Tribunal, which exceeded the scope of the original question referred to it. The Supreme Court held that the High Court had overstepped its jurisdiction by raising new questions of law not referred to it. The Court emphasized that the High Court's role is limited to giving its opinion on questions referred to it and cannot introduce new issues.

The Supreme Court acknowledged the limitations of its advisory jurisdiction in appeals against High Court orders in references under section 66(1). The Court stated that it could not delve into the validity of the transfer or the credibility of the assessee's claims. Therefore, the Supreme Court allowed the appeal, set aside the High Court's order, and remanded the case back to the High Court for consideration based on the original question referred to it. The Court made no order as to costs in this matter.