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TMI Blog1970 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed to purchase all the assets of the vendors, goodwill, and the "book-debts and other liabilities and claims against the company" as on the date of transfer in consideration of allotment of 250 fully paid-up shares of the company of the nominal value of Rs. 2,60,000. It was provided by clause 4 of the agreement: " That all assets of the vendors in respect of all its business shall be taken over at the book value standing in the books of accounts of the vendors as on the 1st August, one thousand nine hundred and fifty-six." In a proceeding for assessment to tax for 1958-59, the Income-tax Officer found that in the books of the vendors the "value of stock" as on August 1, 1956, was Rs. 1,77,285 while in the books of the company the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the certificate or the order certifying the case must disclose that some substantial question of public or private importance arises in the case, and on that account the case is certified to be fit for appeal. In our judgment, the contention must be accepted. Section 66A of the Indian Income-tax Act, 1922, which was added by the Indian Income-tax (Amendment) Act, 1926 (24 of 1926), by sub-section (2) provides: " An appeal shall lie to the Supreme Court from any judgment of the High Court delivered on a reference made under section 66 in any case which the High Court certifies to be a fit one for appeal to the Supreme Court." The phraseology of sub-section (2) of section 66A of the Income-tax Act is substantially the same as used in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Krishn Chand a Division Bench of the Allahabad High Court had issued a certificate stating that "though the valuation of the case was below Rs. 10,000 yet as regards the value and nature of the case it fulfilled the requirements of section 596 of Act No. XIV of 1882 (Code of Civil Procedure)". In that case the value of the subject-matter was less than Rs. 10,000 and the Judicial Committee observed that even though section 596 was referred to there was nothing to show that the judges who had issued the certificate "had exercised their judicial discretion upon the matter in deciding whether, in order to comply with section 595(c) and section 600 the case was a fit one for appeal to Her Majesty in Council". On that ground the appeal was dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a particular assessee and depending upon the state of the evidence in a particular case, but a question of great public importance affecting assessees generally and depending upon general principles. In granting the certificate the High Court merely observed that it was "a fit case for appeal to the Supreme Court"; they did not indicate the grounds which persuaded them to hold that it was a fit case for appeal to this court. It would be conducive to better administration of justice if in certifying a case under section 66A(2) of the Indian Income-tax Act as a fit case for appeal, the High Court sets out the question of law which they regard as of great public or private importance which falls to be decided by this court. Mr. Chagla cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fairly common in some of the High Courts to certify a case under section 66A(2) without recording any reasons or the grounds for certifying the case, and we may not penalise the company when we are enunciating the true rule for the first time. But the practice, in our judgment, was laid down many years ago by the decisions of the Judicial Committee that a certificate under section 66A(2) which does not set out precisely the grounds or raise a question of great public or private importance does not comply with the requirements of the Act. The jurisdiction of this court to entertain an appeal from the opinion recorded under the Indian Income-tax Act arises only when a certificate is properly issued by the High Court or when this court grants ..... X X X X Extracts X X X X X X X X Extracts X X X X
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