Commissioner of Income Tax vs Elekchand Jain

N.D. Ojha, C.J.—Against an order of assessment passed by the Income Tax Officer in regard to the assessment year 1978-79, the assessee preferred an appeal before the Appellate Assistant Commissioner. In the appeal, two documents were filed on behalf of the assessee ; one was some data from the Government Dairy Farm, Anjora, and the other from Mahavir Gaushala, Raipur. A perusal of the order of the Appellate Assistant Commissioner indicates that reliance was placed by him on these two documents also in deciding the appeal.

The Commissioner of Income Tax, aggrieved by the aforesaid order, preferred a second appeal before the Tribunal. One of the grounds raised before the Tribunal in appeal was that the Appellate Assistant Commissioner had committed an error in admitting fresh evidence in contravention of rule 46A of the Income Tax Rules. The appeal was dismissed by the Tribunal. In doing so, however, the Tribunal did not advert to the aforesaid ground at all in its order.

Thereafter, an application was made before the Tribunal by the Commissioner of Income Tax u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), with a prayer that the following two questions may be referred to this court for its opinion :

"1. Whether, on the facts and in the circumstances of the ease, the Tribunal was justified in law in dismissing the departmental appeal without considering the following ground :

(i) Admitting fresh evidence in contravention of rule 46A of the Income Tax Rules, 1962 ?

Whether the Tribunal was justified in law in upholding the order of the Appellate Assistant Commissioner ?"

This application was dismissed by the Tribunal. In the order dismissing the application u/s 256(1) of the Act, nothing has been said by the Tribunal in regard to question No. 1 which related to the admission of fresh evidence in contravention of rule 46A. The Commissioner of Income Tax has consequently made this application undetf Section 256(2) of the Act with a prayer that the Tribunal may be directed to refer the aforesaid two questions to this court for its opinion.

Having heard learned counsel for the parties, we are of the opinion that question No. 1 referred to above does arise out of the appellate order of the Tribunal on the facts and circumstances stated above. As regards question No. 2, we are of the opinion that it is vague and a question of general nature.

In the result, this application succeeds and is allowed to the extent that the Tribunal is directed to draw up a statement of the case and refer to this court for its opinion, question No. 1 mentioned above. The application, in so far as question No. 2 is concerned, is dismissed. In view of the divided success, parties shall bear their own costs.