TMI Blog1978 (8) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... , who confirmed the loan and explained the source thereof, was not a genuine one ? 3. Whether the Tribunal was right in not considering the fact that the assessee having discharged the initial onus, the burden shifted on to the department ?" The Tribunal held that the said questions did not arise from the order of the Tribunal and dismissed the application of the assessee. Thereupon, the assessee made a further application under s. 256(2) to this court. It appears from the records that the assessee invited this court to direct the Tribunal to draw up a statement of case and refer the very same questions which it had raised before the Tribunal in its application under s. 256(1) of the Act set out hereinabove. This court, however, directed the Tribunal to draw up a statement of case in respect of the following question: "Whether, on the facts and circumstances of the case, the finding of the Tribunal that the loan of Rs. 35,000 (rupees thirty-five thousand only) by Shri G. L. Sharma is not genuine, is perverse ?" At the hearing Mr. Ajit Sengupta, learned counsel for the revenue, raised a preliminary point to the effect that the assessee not having asked for the question which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise out of the order of the Tribunal, or is a question of fact or is academic or could not have been raised because it was not incorporated in the application under section 66(1)." (d) CIT v. Imperial Chemical Industries (India) (P.) Ltd. [1969] 74 ITR 17 (SC). This decision was cited for the following observations of the Supreme Court : " It is true that the finding of fact will be defective in law if there is no evidence to support it or if the finding is perverse. But in the hearing of a reference under section 66(1) of the Act it is not open to the assessee to challenge such a finding of fact unless he has applied for the reference of the specific question under section 66(1). In India Cements Ltd. v. Commissioner of Income-tax [1966] 60 ITR 52 (SC), it was held by this court that in a reference the High Court must accept the findings of fact reached by the Appellate Tribunal and it is for the party who applied for a reference to challenge those findings of fact, first, by an application under section 66(1). If the party concerned has failed to file an application under section 66(1) expressly raising the question about the validity of the finding of fact, he is not entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following decisions : (a) Caltex (India) Ltd. v. CIT [1952] 21 ITR 278 (Bom). In this case one of the questions which was referred by the Tribunal to the Bombay High Court was as follows: " Whether the dividend income can be deemed under section 42 of the Act to accrue to the assessee-company in British India ?" At the hearing of the reference, the Bombay High Court held that the question raised by the Tribunal did not bring out clearly the controversy between the parties and the question was reframed by adding the words "as agents" after the words "assessee-company", and was answered accordingly. (b) Shivrajpur Syndicate Ltd. v. CIT [1962] 46 ITR 1205 (Bom). In this case on application of the assessee under s. 66(2) of the Indian I.T. Act, 1922, the Bombay High Court directed the Tribunal to refer the following questions: " (1) Whether, on general principles, the Tribunal was justified in upholding the addition of a proportionate part of the bonus for the earlier years paid in the accounting year to the cost of the stock on hand for the purpose of valuation ? (2) Whether such addition was in any event unjustified having regard to the petitioner's regular method of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was a further appeal to the Supreme Court. The Supreme Court held that the questions which had actually been framed by the Supreme Court itself were not appropriate and did not reflect the real controversy between the parties, and therefore, it was in the interests of justice that the questions should be again modified and the questions as originally suggested by the assessee in its application under s. 66(1) of the said Act were held to be the proper questions. The Supreme Court set aside the judgment of the High Court and directed the Tribunal to draw up a statement of case on the said question and the High Court to dispose of the reference in accordance with law. (d) CIT v. S. P. Jain [1973] 87 ITR 370 (SC). In this case, the following questions were referred to the High Court at the instance of the revenue: " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in declining to consider the documents which were already on record and which the department wanted to adduce as evidence ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal's finding that the purchase of the shares by the Rana was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal being otherwise, the question has to be answered against the assessee or need not be answered as being academic. But on a question of fact it cannot be said that the assessee challenged the conclusion of the Tribunal on admitted or undisputed or settled facts as perverse. When this court directed the Tribunal to draw up a statement of case and refer the questions, which are now before us, it appears to have framed a new question which had not been asked for by the assessee up to that stage. The law on the point, appears to be well settled. If a party does not choose to raise a particular question before the Tribunal and before the High Court, then even if such a question is referred either by the Tribunal suo motu or pursuant to the directions of the High Court, the High Court, while disposing of the reference, is not bound and ought not to answer the same. The alternative contention of Dr. Pal that we should again reframe the question in the form in which it was originally asked for by the assessee also does not stand scrutiny. We have already indicated that the question No. 2 as originally suggested by the assessee has to be, (a) answered against the assessee on the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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