Commissioner of Income Tax vs M/s. Ramdayal Ghansiram and Sons

Chandra Reddy, C.J.

The question raised in this case is whether article 133 of the Constitution is attracted to a decision given by this court u/s 66(1) of the Indian Income Tax Act.

The Commissioner of Income Tax seeks to file an appeal to the Supreme Court against a decision of this court answering a reference, u/s 66(1) against the departments on the following question:

Whether, on the facts and in the circumstances of this case, the erstwhile family house properties have been partitioned among the four members in definite portions for the purpose of section 25A of the Indian Income Tax Act, 1922 ?

Taking all the facts and circumstances of the case, we reached the conclusion that a partition had taken place among the members of the assessee family and that the erstwhile family house properties had been partitioned among the four members in definite portions within the meaning of section 25A(1) of the Income Tax Act and that in this case it was not necessary that the erstwhile family house properties which were made the assets of the partnership should be divided by the metes and bounds so as to entitle the assessee to apply u/s 25A(1) to an order that partition had taken place among the members of the assessee family. In support of our conclusion, reliance was placed on the ruling of the Supreme Court in Charandas Haridas v. Commissioner of Income Tax.

Dissatisfied with out order, the department desires to file an appeal to the Supreme Court.

It is urged on behalf of the Commissioner that he is entitled to leave, as we reversed the finding of the Income Tax Appellate Tribunal and as the value of the subject-matter of the dispute is above Rs. 20,000 and as such the requirements of article 133(1) of the Constitution are satisfied. That being the position, we will be obliged to give leave if the matter falls under article 133 of the Constitution.

But the point is whether article 133 of the Constitution governs a reference u/s 66 of the Indian Income Tax Act. In our judgment, article 133 could not apply to a decision on a reference u/s 66 of the Indian Income Tax Act. It looks to us that article 133 contemplates a judgment or decree passed by this court in its appellate jurisdiction, as could be seen from the expression "the subject-matter of dispute in the court of the first instance and still in dispute in appeal..." etc. This court does not exercise any appellate jurisdiction in answering references u/s 66(1) or 66(2) of the Income Tax Act. It acts only in consultative and advisory capacity while giving decisions under this section. Further, as pointed out by Chagla C.J. in Jamnadas Prabhudas v. Commissioner of Income Tax:

Judgment, decree or final order, is a compendious expression and each one of the parts of this expression bears the same connotation, viz., that there is an adjudication by the court upon the rights of the parties who appear before it.

It looks to us that the word "judgment" is used in the sense of a final declaration or determination of the rights of parties and a decision on merits and would not cover opinions given by this court in its advisory jurisdiction.

That apart, in solving the problem, presented before us, it is pertinent to note that the Indian Income Tax Act makes a provision for the High Court issuing a certificate of fitness for appeal to the Supreme Court. That section 66A(2) is in these words:

An appeal shall lie to the Supreme Court from any judgment of the High Court delivered on a reference made u/s 66 in any case which the High Court certifies to be a fit one for appeal to the Supreme Court.

It is to be seen that this section does not lay down any of the conditions envisaged by article 133 of the Constitution. The only requirement is that the High Court should feel that the matter is a fit one for appeal to the Supreme Court. It is this specific provision that is applicable to matters falling within the ambit of section 66.

In this context, we may also notice the provisions is section 66A(3) of the Indian Income Tax Act, which says:

The provisions of the Code of Civil Procedure, 1908 (V of 1908), relating to appeals to the Supreme Court shall, so far as may be, apply in the case of appeals under this section in like manner as they apply in the case of appeals from decrees of a High Court.

We think that expression "so far as may be" would not attract the provisions of sections 109 and 110, Civil Procedure Code. They were meant to confine the statutory right of appeal to cases described in section 66A(2) only and not to matters which fall within the requirements of section 110, Civil Procedure Code. It is clear from section 66A(2) that in only cases where a certificate of fitness is granted by the High Court and in no other case would an appeal lie to the Supreme Court and that the provisions contained in article 133 of the Constitution would not apply to references falling u/s 66 of the Indian Income Tax Act. In this view of ours, we are supported by the judgment of the Bombay High Court in Jamnadas Prabhudas v. Commissioner of Income Tax already cited.

The only controversy that survives is whether this is a fit case for appeal to the Supreme Court. We do not regard it so, as we are satisfied that the erstwhile family house properties had been partitioned among the members in definite portions within the meaning of section 25A(1) of the Indian Income Tax Act and the case does not pose a serious problem. This conclusion of ours is reinforced by the judgment of their Lordships of the Supreme Court in Charandas Haridas v. Commissioner of Income Tax. In these circumstances, the petition is dismissed.