TMI Blog1962 (1) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... court was delivered by S. K. DAS J.--This is an appeal by special leave from the judgment and order of the High Court of Allahabad dated July 16, 1956, by which the said High Court decided a question referred to it under section 66(1) of the Indian Income-tax Act, 1922, against the assessee. The question was in these terms : " Whether the Appellate Assistant Commissioner was legally justified in issuing a notice under section 28 of the Income-tax Act in the circumstances of the case of the applicant in respect of the item of Rs. 76,836 ? " We may first state the relevant facts. The assessee, appellant before us, is a partnership firm which ran a sugar mill at Cawnpore and dealt in the manufacture and sale of sugar. The process adop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee maintained accounts on the mercantile system of accounting, this excise duty should have been debited as expenditure not in the account year but in the preceding year. The assessee appealed to the Appellate Assistant Commissioner in respect of both these items and urged certain points in support of its appeal which need not be stated here. The Appellate Assistant Commissioner did not accept the contentions urged on behalf of the assessee and rejected the appeal by his order dated July 8, 1946. On July 5, 1946, however, he issued a notice to the assessee under section 28(3) of the Income-tax Act asking it to show cause why a penalty under section 28(1)(c) should not be imposed on it on the ground that it had concealed the partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Tribunal expressed the view that there should be no difficulty in correcting the assessment of that particular year in which the expenditure was incurred, under section 35 of the Income-tax Act. The Tribunal said : " Lest there be a doubt on the point, we direct that the excise duty of Rs. 76,836 should be adjusted as an expenditure due and allowable for the earlier year of assessment, i.e., 1941-42. " This order was passed by the Tribunal on August 7, 1947. As to the penalty imposed under section 28(1)(c) of the Income-tax Act, the Tribunal held that the penalty was rightly imposed but reduced the quantum of penalty to Rs. 43,000. Thereafter, the assessee moved the Tribunal for referring three questions of law which, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law which arose out of the Tribunal's order, the question being whether the Appellate Assistant Commissioner was legally competent to issue a notice under section 28 of the Income-tax Act, when the Income-tax Officer had issued no such notice. In respect of the two questions which the Tribunal refused to refer to the High Court, the assessee did not move the High Court under section 66(2) of the Income-tax Act. What the assessee did was this. When the reference came to the High Court on the third question on a case being stated by the Tribunal, the assessee made an application to the High Court under sub-sections (4) and (5) of section 66 and prayed that the Tribunal be asked to state a case on the other two questions also, q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its of the year under consideration. We are satisfied that the Appellate Assistant Commissioner was legally justified in issuing a notice under section 28 of the Income-tax Act against the assessee. This really disposes of the present appeal. The learned advocate for the assessee has, however, made a grievance of the rejection of the assessee's petition under sub-sections (4) and (5) of section 66 of the Income-tax Act by the High Court. He has contended that the first question and the third question were inter-connected and even though the Tribunal had refused to refer the first question, it was open to the High Court to ask the Tribunal to state a case on the first question also. We are unable to agree. Sub-section (4) of section 66 st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) it is open to the High Court, without raising new and different questions, to resettle or reframe the questions formulated by the Tribunal before answering them so as to bring out the real issue between the parties, and the High Court may even decide a point of law which is implicit in or covered by the question referred by the Tribunal, no additional facts being necessary to support the point. These considerations, however, do not arise in the present case. In the present case the first question was entirely different from the third question and the Tribunal held that it related to a finding of fact only. Whether it so related or not, it cannot be said that the first question was implicit in the third question or that the third question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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