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TMI Blog2021 (1) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... al was justified in holding that the share income of the two minor sons of the assessee, namely, Shri Alok Kumar Goenka and Shri Atul Kumar Goenka including the interest to the extent of Rs. 38,944/- was assessable in the hands of the assessee father Shri Loknath Goenka in the assessment year 1976-77 under section 64(1)(iii) of the Income-tax Act 1961, as amended by the Taxation Laws (Amendment) Act, 1975, with effect from 1-4-76 when the accounting year of the firm ended on 31-12-75 ?" The nature and scope of reference made to the High Court under Section 256 of the Income Tax Act, 1961 (Section 66) is now well settled. In Keshav Mills Co. Ltd. v. CIT, (1965) 2 SCR 908 (7 Judge bench), the Court held as under: "14. Section 66(4) must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in exercise of the reference jurisdiction of the High Court is inappropriate. This Court had observed that while hearing a reference under the Income Tax Act, the High Court exercises advisory jurisdiction and does not sit in appeal over the judgment of the Tribunal. It has been further held that the High Court has no power to set aside the order of the Tribunal even if it is of the view that the conclusion recorded by the Tribunal is not correct." (Emphasis supplied) The facts recorded in the reference and the contentions of the parties leading to the framing to the question of law and the reference made are reproduced as under:- "By this reference application made under section 256(1) of the Income-tax Act, 1961 (hereinafter refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that the Appellate Assistant Commissioner erred in 1aw in upholding the application of section 64 and that the amended provision came into force with effect from assessment year 1976-77. 5. The leaned departmental representative supported the orders of the lower authorities. 6. The learned counsel for the assessee filed a copy of the assessment order relating to the registered firm M/s. Vijay Kumar Pradeep Kumar. It showed that Shri Alok and Shri Autl had 20% share each in the firm and the share income was to the extent of Rs. 13,475/- each and they also earned interest of Rs. 6,440/- and Rs. 5,554/- respectively and thus the total income of each of these two minors came to Rs. 19,915/- and Rs. 19,021/- respectively. The accounting ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minor child of such individual from the admission of the minor to the benefits of the partnership in a firm. It was argued before the Tribunal that the provision came into force from 1- 4-76 and so it applies only to such partnership firm which admitted a minor to the benefits of the partnership on and from 1-4-76 or at least to the accounting period which starts on or after 1-4-76 and so the amended 1aw does not apply to the accounting period which ends before 1-4-76. 10. The Tribunal relied on the consolidated order dated 11-9-79 of this Tribunal in I.T.A. No. 254 (Pat) of 1979 and C.O. No. 23 (Pat) of 1979 and the order dated 15-12-79 in I.T.A. Nos. 836 to 838 (Pat) of 1979 and also on the consolidated order dated 11-12-80 in I.T.A. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the statement of the case and is Annexure 'E3.' In view of the doubt having arising with respect to the observations made by a co-ordinate Bench of this Court in Badri Prasad & ors. vs. Commissioner of Income Tax (1990) Volume 185 ITR 307, the matter was referred to a Larger Bench (three-Judge Bench). The said Bench, considering the law laid down by the Constitution Bench of the Apex Court in Kesoram Industries and Cotton Mills Ltd. vs. Wealth Tax Commissioner (Central), Calcutta, AIR 1966 SC 1370, as also the observations made by yet another Constitution Bench of the Hon'ble Apex Court in Karimtharuvi Tea Estate Ltd Versus State of Kerala, AIR 1966 SC 1385, has observed in paragraph 19 as under:- "19. The Amending Act introduce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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