Appeal No 1017 of 1963
Appeal from the judgment and order dated March 30th and 31st 1960 of the Bombay High Court in Income tax Reference No 2 of 1949
N A Palkhivala and I N Shroff for the appellant
C K Daphtary Attorney General R Ganapathy Iyer R H Dhebar and R N Sachthey for the respondent
The Judgment of the Court was delivered by Gajendragadkar CJ
When this appeal was argued before a Division Bench of this Court on October 23 1964 it was urged on behalf of the appellant the Keshav Mills Co Ltd that in view of the present decisions of this Court in The New Jehangir 910 Vakil Mills Ltd vs The Commissioner of Income tax Bombay North Kutch and
Saurashtra1 and The Petlad Turkey Red Dye Works Co Ltd Petlad vs The Commissioner of Income tax Bombay Ahmedabad 2 the appeal must be allowed and the case sent back to the Bombay High Court for disposal in accordance with the principles laid down in the latter decision
At that stage the learned Attorney General for the respondent the Commissioner of Income tax Bombay North Ahmedabad urged that he wanted this Court to reconsider the said two decisions
He fairly conceded that if the said two decisions were to be followed the appeal would have to be allowed and sent back as suggested by the appellant
The learned Judges constituting the Division Bench took the view that an opportunity should be given to the learned Attorney General to press his contention and so they directed that the appeal be placed before a Bench of five Judges
Thereafter this appeal came on for hearing before the Constitution Bench on November 5 1964
On this occasion again the same contentions were raised on behalf of the appellant and the respondent respectively Mr Palkhilvala for the appellant urged that it would be inappropriate to reconsider the recent decisions on which he relied and he argued that on the merits the view taken by this Court in the said two decisions was sound and correct
On the other hand the learned Attorney General contended that he wanted this Court to reconsider the said two decisions and he pointed out that the matter was of importance and so the appeal should be referred to a larger Bench in view of the fact that the decision in the case of the Petlad Co 2 was a unanimous decision of a Bench consisting of five Judges of this Court
It was under these circumstances that the Court directed that the appeal should be placed before a Special Bench of seven Judges Mat is how it has come on for a final decision before a Bench of seven Judges and the only point which has been raised for the decision of the Special Bench is whether the two decisions in question should be reviewed and revised
Let us begin by stating the relevant facts leading up to the main point of controversy between the parties
The appellant is a company registered in the Baroda State as it then was
The assessment year with which the proceedings giving rise to this appeal are concerned is 1942 43 the accounting year being calendar year 1941
During the said year the appellant was a non resident 
It carried on business of manufacturing and 1  2 1963 Supp 1 section C R 871
911 selling textile goods in the Baroda State
The operations in relation to all sales of goods manufactured by the appellant s Mills were completed at the appellant s premises at Petlad on the footing of ex Mill delivery in every case
It appears that on March 22 1947 the Income tax Officer EPT Circle Ward B Ahmedabad passed an order under sec tions 23 3 and 34 of the Indian Income tax Act 1 922 No 11 of 1922 hereinafter called the Act and held that sale proceeds in respect of the sales aggregating each of the following three items were received by the appellant in British India
These items were  i Sale proceeds actually received in the accounting Year through Ms Jagmohondas Ramanlal  Co Rs 1268460 ii Sale proceeds through British Indian Banks through Drafts Rs 440878 iii Sale proceeds collected by collecting cheques on British Indian Banks and Hundis onBritish Indian Shorff and Merchants Rs 671735 It is with this last item that the present appeal is concerned
Aggrieved by the order thus passed by the Income tax Officer the appellant preferred an appeal before the Appellate Assistant Commissioner of Income tax Ahmedabad Range
The Appellate Authority held that the Income tax Officer was in error in not excluding items i and iii respectively from computation of the taxable profits of the appellant
Thus the appellant succeeded before the appellate authority in respect of the item in dispute
This decision of the appellate authority led to two cross appeals one by the Income tax Officer and the other by the appellant before the Income tax Appellate Tribunal hereafter called the Tribunal
The Tribunal dismissed the appellant s appeal in respect of Rs 440878 and allowed the Income tax Officer s appeal in part and held that the item of Rs 1268460had been wrongly excluded by the Appellate Authority
In respect of item iii relating to Rs 671735  the Tribunal held that in the circumstances of the case the sale proceeds represented by the said item were not received in British India but in the State itself
This decision of the Tribunal led to two cross applications by the appellant and the Income tax Officer for raising the questions of law before it in relation to the items in respect of which 912 they had respectively failed
As a result of these proceedings the Tribunal drew up the statement of the case on November 5 1948 and raised  the following question to the Bombay High Court  Whether on the facts and in the circumstances of the case the sums of Rs 1268460  Rs 440878and Rs 671735  or any of them which represents receipts by the assessee company of its sale proceeds in British India include any portion of its income in British India  In other words all the three items in dispute between the appealant and the Income tax Officer formed the subject matter of the question raised by the Tribunal before the Bombay High Court
This reference was registered as Income tax Reference No 2 of 1949
By its judgment and order delivered on the 14th15th Sep tember 1949 in relation to items i and ii the High Court held that the two sums in question were not debts due from British Indian Merchants but sale proceeds of the goods sold by the appellant to merchants in British India and that such sale proceeds were received by the appellant in British India
In other words the answers rendered by the High Court in respect of the said two items were against the appellant
The appellant came to this Court in appeal against the decision of the High Court but its appeal failed and the view taken by the High Court was affirmed vide Keshav Mills Ltd vs Commissioner of Income tax Bombay
In the result the controversy between the appellant and the Income tax Officer in respect of the said items has been finally decided against the appellant
Reverting then to item iii with which the present appeal is concerned the High Court took the view that before it could render an answer to the question in relation to the said item it would like the Tribunal to furnish to the High Court further facts
Accordingly the High Court directed that the Tribunal should submit a supplementary statement of case and state therein as to whether there was any arrangement or agreement between the Assessee and the merchants that the giving of cheques or hundis by the merchants to the Assessee would result in an unconditional discharge of the liability of the merchants
The High Court also issued some other directions asking the Tribunal to clarify 1 19531 section C R 950
913 some of its relevant findings which appeared to the High Court to be somewhat confused
As a result of this order the case went back to the Tribunal which in turn remanded it to the Income tax Officer for getting the requisite information
On receiving the report of the Income tax Officer the Tribunal submitted its Supplementary Statement of Case to the High Court on August 13 1954
Whilst these proceedings were thus pending in the High Court the decision of this Court in The Commissioner of Income tax Bombay South Bombay vs Messrs Ogale Glass Works Ltd Ogale Wadi1 was pronounced
In that case one of the points which arose for decision was whether the Post Office which takes the cheque from the sender to the addressee is the agent of the sender or the addressee and on this point the Court held that as between the sender and the addressee it is the request of the addressee that makes the post office the agent of the addressee and after such request the addressee cannot be heard to say that the post office was not his agent
On the other hand if there is no such request by the addressee express or implied then on delivery of the letter or the cheque to the post office by the sender the post office acts as the agent of the sender
This decision had a significant impact on the further progress of the present dispute
After receiving the Supplementary Statement of Case from the Tribunal the matter was argued before the High Court on the 15th February 1955
On this occasion the High Court referred the matter back again to the Tribunal with the direction  that the Tribunal will determine on the evidence led by both parties whether the sum in question was paid by various merchants by sending drafts hundis or cheques by post and that if the Tribunal found that in some cases the amount was not sent by post then the Tribunal should determine what amount was sent otherwise than by post and the Tribunal should then submit a Supplementary Statement of the Case
It would be noticed that this direction was given by the High Court obviously because the High Court wanted to deal with the question referred to it in the light of the decision of this Court in the case of Ogale Glass Works Ltd In fact in giving this second direction the High Court observed that when it had called for the first Supplementary Statement of the Case it did not have the benefit of the decision of this Court in the case of Ogale Glass Works Ltd1 and that after the said decision was pronounced the position with regard  1 914 to receipt of the cheque by the appellant had been considerably simplified
Pursuant to the second order of remand made by the High Court the Tribunal submitted its second Supplementary Statement of the Case on the 26th October 1959
After receipt of the second Supplementary Statement the Reference again came up for hearing before the high Court
After hearing the parties the High Court has rendered its answer against the appellant on the question in relation to the item in dispute
It is against this order passed by the High Court on the 30th and 31St March 1960 that the appellant has come to this Court with a certificate granted by the High Court and on its behalf Mr Palkhivala has urged that in view of the decisions of this Court in the New Jehangir Mills1 case and Petlad Co2 case the appeal must be allowed and the case remitted to the High Court to be dealt with in accordance with the principles laid down by this Court in the latter case
It is common ground that as a result of the two orders of remand passed by the High Court in the present Reference proceedings some material evidence which was not on the record when the question was framed by the Tribunal and sent to the High Court under section 661 of the Act has been collected and made a part of the Supplementary Statement of the Case and basing himself on this fact Mr Palkhivala contends that the High Court had no jurisdiction to direct the Tribunal to collect additional material and form it a part of the Supplementary Statement under section 664 of the Act
It is in support of this contention that reliance is placed on the two decisions in question
Before addressing ourselves to the problem as to whether the view taken by this Court in the said two decisions needs to be reconsidered and revised it is necessary that we should refer to the said two decisions as well as other decisions on which both the parties have relied before us in the course of the arguments
The first decision on which Mr Palkhivala relies is the New Jehangir Mills1 case
In that case the question which was referred by the Tribunal to the High Court was whether the receipt of the cheques in Bhavnagar amounted to receipt of sale proceeds in Bhavnagar
Before rendering its answer to this question the High Court had directed the Tribunal to furnish a Supplementary Statement of the Case on the following points On the finding of the Tribunal that all the cheques were received in Bhavnagar the Tribunal should find 1  2 1963 SUPP
section C R 871
915 what portion of these cheques were received by post whether there was any request by the assessee express or implied that the amounts which are the subject matter of these cheques should be remitted to Bhavnagar by post
It would be noticed that as a result of this direction the question which would really have to be considered by the High Court would be whether the posting of the cheques in British India at the
request express or implied of the appellant amounted to
receipt of sale proceeds in British India
It was urged by the appellant in that case that as a result of the direction issued by the High Court calling for a supplementarystatement of the case the nature of the question formulated by the Tribunal had been altered and that was beyond the competence of the High Court under section 664
In substance this plea was upheld by this Court and it was held that in calling for the supplementary statement of the case the High Court had misconceived its powers
under section 664 of the Act
According to this decision section 664 must be read with section 661 and section 662 and so read it did not empower the High Court to raise a new question of law which did not arise out of the Tribunal s order or direct the Tribunal to investigate new and further facts necessary to determine the new question which had not been referred to it under section 661 or section 662 of the Act and direct the Tribunal to submit supplementary statement of case
The additions and alterations in the statement of case which can be directed under section 664 could in the opinion of this Court relate only to such facts as already formed part of the record but were not included by the
Tribunal in the statement of the case
Mr Palkhivala contends that in the light of the decision we ought to hold that in so far as the two orders of remand passed by the High Court in the present Reference proceedings have led to the collection of  additional material and evidence and their inclusion in the supplementary statements of the case the High Court has exceeded its jurisdiction under section 664
The other case on which Mr Palkhivala strongly relies is the decision of this Court in the Petlad Co Ltd 1
In that case one of the points decided by this Court had reference to the extent of the powers and authority of the High Court under section 664
It was held that though the High Court had power to direct a supplemental statement to be made it was beyond its competence to direct additional evidence to be taken
In other 1 1963 Supp 1 section C R 871
916 words this Court took the view that when the High Court makes an order of remand under section 664 and directs the Tribunal to furnish a supplemental statement of the case it can require the Tribunal to include in such supplemental statement material and evidence which may
already be on the record but which had not been included in the statement of the case initially made under Is
661
The result of this decision is that section 664 does not confer on the High Court power to require the Tribunal to take additional evidence before it renders its answers on the questions formulated under section 661 or section 662
In accordance with the view thus taken by this Court the direction issued by the High Court to submit a supplemental statement of the case after taking additional evidence was reversed and following the precedent in the New Jehangir Mills1 case an order was passed that the appeals should be allowed and the matter remitted to the High Court to give its decision on the question of law referred to it as required under section 665 of the Act
Before the decision of this Court in the Petlad Co Ltd 2 was pronounced a similar point had been raised in the case of Ms Zoraster and Co vs The Commissioner of Income tax Delhi Ajmer Rajasthan and Madhya Bharat now Madhya Pradesh2
In this latter case the question referred to the High Court for its decision was whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories  While dealing with this question the High Court thought it necessary to remand the case to the Tribunal for a supplemental statement of the case calling for a finding on the question whether the cheques were sent to the assessee firm by post or by hand and what directions if any had the assessee firm given to the department in the matter  The validity and correctness of this direction was challenged by the appellant before this Court in view of the decision of this Court in the care of New Jehangir Mills3
While dealing with this objection raised by the appellant this Court held that the question as it was framed was wide enough to include an enquiry as to whether there was any request express or implied that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works4 case or in Shri Jagdish Mills Ltd vs The Commissioner of Income tax Bombay North Kutch and Saurashtra Ahmedabad5 and since it did not appear 1  2 1963 Supp 1 section C R 871
3  4 1955 1 section C IL 185
5  917 from the order of remand passed by the High Court that the High Court intended that the Tribunal should admit fresh evidence before submitting its supplemental statement the impugned direction could not be said to be invalid
This decision shows that when a question is framed for the decision of the High Court in wide terms and the High Court finds that before rendering its answer on the said question some new aspects have to be considered and it feels that for dealing with the said new aspects of the matter a supplemental statement of the case should be called for the High Court is authorised to call such a supplemental statement provided of course the High Court does not require the Tribunal to collect additional material or evidence before submitting its supplemental statement
The same view has been expressed by this Court in the case of Commissioner of Income tax Madras vs M Ganapathi Muda liar1
According to this decision a supplementary statement of case may contain such alterations or additions as the High Court may direct but the statement must necessarily be based on facts which are already on the record
While exercising its jurisdiction under section 664 the High Court has no power to ask for a fresh statement of case with a direction that the Tribunal should go into the matter again and record further evidence
There is one more decision to which reference may inciden tally be made before we part with the series of decisions on which Mr Palkhivala relies
In the Commissioner of Income tax Bombay vs The Scindia Steam Navigation Co Ltd 2 this Court had occasion to consider the scope and denotation of the expression any question of law arising out of such order  occurring in section 661 of the Act
The majority decision has summed up the result of the discussion as to the scope and effect of the provisions of section 66 in these words  1 When a question is raised before the Tribunal and is dealt with by it is clearly one arising out of its order
2 When a question of law is raised before the Tribunal but the Tribunal fails to deal with it must be deemed to have been dealt with by it and is therefore one arising out of its order
3 When a question is not raised before the Tribunal but the Tribunal deals with it that will also be a question arising out of its order
4 When a question of law is neither raised before the Tribunal nor considered by it will not be a question arising 1 1964 53 2   918 out of its order notwithstanding that it may arise on the findings given by it
In substance these propositions mean that it is only a question that has been raised before or decided by the Tribunal that could be held to arise out of its order
Let us now refer to the decisions on which the learned Attorney General has relied in support of his contention that the High Court has power under section 664 to call for new additional evidence if it takes the view that such additional evidence is necessary to enable it to determine the question raised for its decision satisfactorily
The learned Attorney General has fairly conceded that he has not been able to find any decision where this question has been answered in favour of the view for which he contends after construing the relevant provisions of section 664 of the Act
He however urges that there is high authority in support of the practice for which he contends inasmuch as the Privy Council appears to have assumed that the High Court can in exercise of its powers under section 664 call for additional evidence
The first decision of the Privy Council on which he relies is in the case of Sir Sunder Singh Majithia vs The Commissioner of Income tax CP  UP1
In that case two of the questions which arose were  whether the steps taken by the assessee to vest in his wife and sons an interest in the immovable assets of the business were not legally effective eg for want of a registered instrument of transfer and if the factory land and buildings in question were joint family property whether it was shown that a partition at the hands of the father of the said properties could not be effected without a written instrument  The question of law formulated for the decision of the High Court was  In all the circumstances of the case having regard to the personal law governing the assessee and the requirements of the Transfer of Property Act IV of 1882 and the Stamp Act 11 of 1899 has the deed of partnership dated February 12 1933 brought into existence a genuine firm entitled to registration under the provisions of section 26 A of the Act While answering this question one of the points which had to be decided was whether the immovable properties were the self acquisitions of the father or not
The Privy Council took the view that before a satisfactory answer could be rendered on the question framed several facts had to be ascertained and in its judgment the Privy Council has indicated the nature of these facts
It is necessary to know says the judgment as regards a the business machinery plant 1 919 and other movables b the factory buildings and land whether they were before 1931 the self acquired property of the father or his ancestral property or joint family property or whether they fall into some other and what category according to the customary law
The judgment also points out that the rights of the members of the family in respect of the said property would have to be ascertained and the conduct of the parties considered
Then in regard to the agreement in question the Privy Council pointed out that it would be necessary to enquire what agreement if any was made prior to February 12 1933 and when as to a partnership being constituted to carry on the sugar factory and as to the assets which it was to have as a firm
None of these essential facts says the judgment have been found and stated by the Commissioner with the result that the question referred cannot be answered until the High Court has exercised its powers under sub section 4 of section 66 of the Act
Having made these observations the Privy Council left it to the discretion of the High Court to specify the particular additions and alterations which the Commissioner should be directed to make
In the result the advice tendered by the Privy Council was that the case be remanded to the High Court for disposal after taking such action under sub section 4 of section 66 of the Act as the High Court may think fit in the light of this judgment
The argument is that the facts which the Privy Council thought it necessary to ascertain before answering the question indicate that they could not have been on the record at the time when the question was originally framed by the Commissioner and so the suggestion is that inasmuch as the Privy Council indicated that the High Court should call for a supplemental statement in regard to facts which were apparently not already on the record this decision should be taken to support the contention that section 664 authorised the High Court to call for new additional material before it renders its answers to the questions formulated under section 661 or section 662
A similar argument is based on another decision of the Privy Council in Trustees of the Tribune Press Lahore vs Commissioner of Income tax Punjab Lahore1
In that case the questions which were referred to the High Court were  1 whether the income of the Tribune Trust was liable to be assessed in the hands of the Trustees under the provisions of the Income tax Act  and 2 if it was whether it was not exempt under section 43 1 of the Act In the High Court there was a sharp difference of opinion between the Judges who heard the reference but ultimately the 4 Sup65 13 920 answers went against the Tribune and so the dispute was taken to the Privy Council by the Trustees of the Tribune Trust
At the first hearing of the said appeal before the Privy Council it was considered by the Board to be desirable that the powers conferred by sub section 4 of section 66 of the Act should be employed to obtain further information
Accordingly by an Order in Council dated July 29 1937 it was directed in accordance with the advice tendered by the Board that the case ought to be remitted to the High Court of Judicature at Lahore with a direction that the said High Court shall refer the case back to the Commissioner under section 664 first for the addition of such facts during the life time of the testator Sardar Dayal Singh as may bear upon the proper interpretation of the expression keeping up the liberal policy of the said newspaper in clause XXI of the will of the said testator dated the 15th Day of June 1895 and secondly for the addition of such facts as to a compromise dated the 1st day of December 1906 as may show whether the said compromise is binding on all parties interested in the estate of the said testator
Thereafter a supplementary statement made by the Commissioner was filed and it appears that before he made the said statement the Commissioner carefully assembled considerable material explanatory of the direction given by the testator in the phrase keeping up the liberal policy of the said newspaper and showing as their Lordships think very fairly the nature and purpose of the trust
After considering the said material the Privy Council allowed the appeal preferred by the Trustees because in its opinion the second question framed for the decision of the High Court had to be answered in favour of the assessee
It is urged that this decision also shows that the Privy Council called for additional material and evidence by requiring the High Court to exercise its powers in that behalf under section 664 of the Act
The learned Attorney General also stated that there were some other decisions of the High Courts in India where similar additional evidence had been called for by the High Courts under section 664 and by way of illustration he cited before us the decision of the Bombay High Court in Messrs Govindram Bros Ltd vs Commissioner of Income tax Central Bombay1
It is however clear that in none of the decisions on which the learned Attorney General relies has the question about the construction of section 664 been argued considered and decided
That broadly stated is the position disclosed by the judicial decisions bearing on the point with which we are concerned in the present appeal
1 194614 ITR 764 921 In dealing with the question as to whether the earlier decisions of this Court in the New Jehangir Mills1 case and the Petlad Co Ltd1 case should be reconsidered and revised by us we ought to be clear as to the approach which should be adopted in such cases
Mr Palkhivala has not disputed the fact that in a proper case this Court has inherent jurisdiction to reconsider and revise its earlier decisions and so the abstract question as to whether such a power vests in this Court or not need not detain us
In exercising this inherent power however this Court would naturally like to impose certain reasonable limitations and would be reluctant to entertain pleas for the reconsideration and revision of its earlier decisions unless it is satisfied that there are compelling and substantial reasons to do so
It is general judicial experience that in matters of law involving questions of construing statutory or constitutional provisions two views are often reasonably possible and when judicial approach has to make a choice between the two reasonably possible views the process of decision making is often very difficult and delicate
When this Court hears appeals against decisions of the High Courts and is required to consider the propriety or correctness of the view taken by the High Courts on any point of law it would be open to this Court to hold that though the view taken by the High Court is reasonably possible the alternative view which is also reasonably possible is better and should be preferred
In such a case the choice is between the view taken by the High Court whose judgment is under appeal and the alternative view which appears to this Court to be more reasonable and in accept ing its own view in preference to that of the High Court this Court would be discharging its duty as a Court of Appeal
But different considerations must inevitably arise where a previous decision of this Court has taken a particular view as to the construction of a statutory provision as for instance section 664 of the Act
When it is urged that the view already taken by this Court should be reviewed and revised it may not necessarily be an adequate reason for such review and revision to hold that though the earlier view is a reasonably possible view the alternative view which is pressed on the subsequent occasion is more reasonable
In reviewing and revising its earlier decision this Court should ask itself whether in the interests of the public good or for any other valid and compulsive reasons it is necessary that the earlier decision should be revised
When this Court decides questions of law its decisions are under article 141 binding on all courts within the territory of India and so it must be the constant endeavour and concern of 1  2 1963 Supp 1 SCR 871
A Sup65 14 922 this Court to introduce and maintain an element of certainty and continuity in the interpretation of law in the country
Frequent exercise by this Court of its power to review its earlier decisions on the ground that the view pressed before it later appears to the Court to be more reasonable may incidentally tend to make law uncertain and introduce confusion which must be consistently avoided
That is not to say that if on a subsequent occasion the Court is satisfied that its earlier decision was clearly erroneous it should hesitate to correct the error but before a previous decision is pronounced to be plainly erroneous the Court must be satisfied with a fair amount of unanimity amongst its members that a revision of the said view is fully justified
It is not possible or desirable and in any case it would be inexpedient to lay down any principles which should govern the approach of the Court in dealing with the question of reviewing and revising its earlier decisions
It would always depend upon several relevant considerations What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based  On the earlier occasion did some patent aspects of the question remain unnoticed or was the attention of the Court not drawn to any relevant and material statutory provision or was any previous decision of this Court bearing on the point not noticed  Is the Court hearing such plea fairly unanimous that there is such an error in the earlier view  What would be the impact of the error on the general administration of law or on public good  Has the earlier decision been followed on subsequent occasions either by this Court or by the High Courts  And would the reversal of the earlier decision lead to public inconvenience hardship or mischief  These and other relevant considerations must be carefully borne in mind whenever this Court is called upon to exercise its jurisdiction to review and revise its earlier decisions
These considerations become still more significant when the earlier decision happens to be a unanimous decision of a Bench of five learned Judges of this Court
It is true that in the case of the Bengal Immunity Company Ltd vs The State of Bihar  Ors
1 this Court by a majority of 4  3 reversed its earlier majority decision 4  1 in the State of Bombay and Another vs The United Motors India Ltd and Ors
2 but that course was adopted by the majority of Judges in that case because they were persuaded to take the view that there were several circumstances which made it necessary to adopt that course
1 2  923 On the other hand dealing with a similar problem in the case of Sajjan Singh etc
vs The State of Rajasthan etc1 this Court unanimously rejected the request made on behalf of the petitioners that its earlier decision in Sri Sankari Prasad Singh Deo vs The Union of India and State of Bihar 2 should be reviewed and revised
Hidayatullah and Mudholkar JJ
who were somewhat impressed by some of the pleas made in support of the contention that the earlier decision should be revised in substance agreed with the ultimate decision of the Court that no case had been made out for a review or revision of the said earlier decision
The principle of stare decision no doubt cannot be pressed into service in cases where the jurisdiction of this Court to reconsider and revise its earlier decisions is invoked but nevertheless the normal principle that judgments pronounced by this Court would be final cannot be ignored and unless considerations of a substantial and compelling character make it necessary to do so this Court should and would be reluctant to review and revise its earlier decisions
That broadly stated is the approach which we propose to adopt in dealing with the point made by the learned Attorney General that the earlier decisions of this Court in the New Jehangir Mills3 case and the Petlad Co Ltd 4  case should be reconsidered and revised
Let us then consider the question of construing section 664 of the Act
Before we do so it is necessary to read sub section 1 2 and 4 of section 66
Section 661 reads thus  Within sixty days of the date upon which he is served with notice of an order under sub section 4 of section 33 the assessee or the Commissioner may by application in the prescribed form accompanied where application is made by the assessee by a fee of one hundred rupees require the appellate Tribunal to refer to the High Court any question of law arising out of such order and the Appellate Tribunal shall within ninety days of the receipt of such application draw up a state ment of the case and refer it to the High Court
There is a proviso to this sub section which is not relevant for our purpose
Section 662 reads thus  If on any application being made under sub section 1 the Appellate Tribunal refuses to state the 1  2  3  4 1963 Supp 1 SCR 871
924 case on the ground that no question of law arises the assessee or the Commissioner as the case may be may within six months from the date on which he is served with notice of the refusal apply to the High Court and the High Court may if it is not satisfied of the correctness of the decision of the Appellate Tribunal require the Appellate Tribunal to state the case and to refer it and on receipt of any such requisition the Appellate Tribunal shall state the case and refer it accordingly
That takes us to sub section 4 which reads thus if the High Court is not satisfied that the statements in a case referred under this section are sufficient to enable it to determine the question raised thereby the Court may refer the case back to the Appellate Tribunal to make such additions thereto or alterations therein as the Court may direct in that behalf
Section 665 provides that the High Court upon hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded and shall send a copy of such judgment to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgment
It is clear that when the Tribunal draws up a statement of the case and refers a question of law to the High Court under section 661 the said question must arise out of its order and the statement of the case would necessarily be limited to the statement of facts already brought on the record either before the Income tax Officer or before the Appellate Assistant Commissioner or before the Tribunal
There is no doubt and indeed no dispute before us that the question of law must arise from the Tribunal s order and the statement of the case must be confined to the facts already brought on the record
The same would be the position where the High Court requires the Tribunal to state the case and refer to it under section 662
The position therefore is that when the High Court is exercising its advisory jurisdiction under section 664 it is dealing with a question of law arising from the order of the Tribunal and has to answer the said question in the light of the statement of the case submitted to it by the Tribunal
in normal course the statement of the case would refer to facts selected by the Tribunal from out of the material already on the record and it is in the light of the said statement of the case that 925 the question has to be answered by the High Court
Thus far there is no controversy or dispute
Section 664 however authorises the High Court to refer the case back to the Tribunal to make such additions to the statement of the case or alterations therein as the Court may direct in that behalf
This power can be exercised by the High Court if it is satisfied that the statement of the case is not sufficient to enable it to determine the question raised by it
If the High Court feels that in order to answer satisfactorily the question referred to it is necessary to have additional material included in the statement of the case the High Court can make an appropriate direction in that behalf
If the High Court is satisfied that some alterations should be made in the statement of the case to enable it to determine the question satisfactorily it can make an appropriate direction in that behalf
The question is whether in issuing appropriate directions under 
664 the High Court can ask the Tribu nal to travel outside the record and call for and collect material which is not already produced on the record
If section 664 is read along with section 661 and section 662 it may tend to show that the power of the High Court is limited to requiring the Tribunal to add to or alter the statement of the case in the light of the material and evidence already on the record
If the question that can be raised under section 661 and section 662 can arise only out of the order of the Tribunal and if the statement of the case required to be drawn up by the Tribunal under the said two provisions would inevitably be confined to the facts and material already on the record it seems unlikely that section 664 would authorise the High Court to direct the Tribunal to collect additional material or evidence not on the record
The scheme of the Act appears to be that before the Income tax Officer all the relevant and material evidence is adduced
When the matter goes before the Appellate Assistant Commissioner he is authorised under section 312 to make such further enquiry as he thinks fit or cause further enquiry to be made by the Income tax Officer before he disposes of the appeal filed before him
Section 31 2 means that at the appellate stage additional evidence may be taken and further enquiry may be made in the discretion of the Appellate Assistant Commissioner
When the matter goes before the Appellate Tribunal under section 33 the question about the admission of additional evidence is governed by Rule 29 of the Income Appellate Tribunal Rules 1963
This Rule provides that the parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal but if 4 Sup65 15 926 the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause or if the Income tax Officer has decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by him or not specified by him the Tribunal may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced
After the Tribunal has passed orders on the appeal before it the stage is reached to take the matter by way of reference proceedings before the High Court under section 66
This scheme indicates that evidence has to be led primarily before the Income tax Officer though additional evidence may be led before the Appellate Assistant Commissioner or even before the Tribunal subject to the provisions of section 312 of the Act and Rule 29 respectively and that means that when the Tribunal has disposed of the matter and is preparing a statement of the case either under section 661 or under section 662 there is no scope for any further or additional evidence
When the matter goes to the High Court it has to be dealt with on the evidence which has already been brought on the record
If the statement of the case does not refer to the relevant and material facts which are already on the record the High Court may call for a supplementary statement under section 664 but the power of the High Court under section 664 can be exercised only in respect of material and evidence which has already been brought on the record
There is another consideration which is relevant in dealing with the question about the scope and effect of the provisions contained in section 664
Proceedings taken for the recovery of tax under the provisions of the Act are naturally intended to be over without unnecessary delay and so it is the duty of the parties both the department and the assessee to lead all their evidence at the stage when the matter is in charge of the Income tax Officer
Oppor tunity is however given for additional evidence by section 312 and Rule 29 but if further evidence is allowed to be taken under the directions of the High Court under section 664 it is likely that tax proceedings may be prolonged interminably and that could not be the object of the Act as it is evidenced by the relevant provisions to which we have already referred
These mainly are the grounds on which the earlier decisions of this Court in the New 927 Jehangir Mills1 case and the Petlad Co Ltd 2 case substantially rest
On the other hand it must be conceded that the words used in section 664 are wide enough and they may on a liberal construction include the power to call for additional evidence by directing the Tribunal to file supplementary statement of the case
It is true that section 664 in terms does not confer such a power and it may be that having regard to the scheme of section 661 and 2 one would have expected specific and express terms conferring such power on the High Court in section 664 if the Legislature had intended that the High Court would be competent to call for additional evidence but there are no terms of limitation in section 664 and it would be reasonably possible to construe section 664 as enabling the High Court to call for additional evidence if it is satisfied that the material in the statement of the case is not sufficient to answer satisfactorily the question raised by the statement of the case
When the High Court is dealing with the statement of the case under section 664 it is its duty to answer the question submitted to it
As has been held by this Court in Rajkumar Mills Ltd vs Commissioner of Income tax Bombay1 where the question involved is one of law and the High Court finds it difficult to answer the question owing to the unsatisfactory nature of the statement of the case submitted by the Tribunal the proper procedure is to call for a further statement of the case and then decide the question itself
The High Court would be adjuring its advisory function if it merely gives some directions and orders the Tribunal to dispose of the matter according to law and in the light of the directions given by it without referring the matter again to the High Court and so if the High Court finds that in order to deal with the question referred to it satisfactorily it is necessary to ascertain some relevant and material facts it should be open to the High Court to direct the Tribunal to make a supplementary statement containing the said material and facts
There is no provision in section 664 which prevents the exercise of such a power
In some cases the question of law referred to the High Court may have to be considered in several aspects some of which may not have been appreciated by the Tribunal
There is no doubt that if a question of law is framed in general terms and in dealing with it several aspects fall to be considered they have to be considered by the High Court even though the Tribunal may not have considered them
In such a case if in dealing with some aspects 1  2 1963 Supp 1 SCR 871
31955 928 of the matter it becomes necessary to ascertain additional facts it would be unsatisfactory to require the High Court to answer the question without such additional facts on the ground that they have not been introduced on the record already
Refusal to recognise the jurisdiction of the High Court to call for such additional evidence may lead to hardship in many cases and since there are no words expressly limiting the powers of the High Court under section 684 there is no reason why the said powers should receive a narrow and limited construction
That is the view for which the learned Attorney General contends
It must be conceded that the view for which the learned Attorney General contends is a reasonably possible view though we must hasten to add that the view which has been taken by this Court in its earlier decisions is also reasonably possible
The said earlier view has been followed by this Court on several occasions and has regulated the procedure in reference proceedings in the High Courts in this country ever since the decision of this Court in the New Jehangir Mills1 was pronounced on May 12 1959
Besides it is somewhat remarkable that no reported decision has been cited before us where the question about the construction of section 664 was considered and decided in favour of the Attorney General s contention
Having carefully weighed the pros and cons of the controversy which have been pressed before us on the present occasion we are not satisfied that a case has been made out to review and revise our decisions in the case of the New Jehangir Mills2 and the case of the Petlad Co Ltd 2 
That is why we think that the contention raised by Mr Palkhivala must be upheld
In the result the order passed by the High Court is set aside and the matter is sent back to the High Court with a direction that the High Court should deal with it in the light of the two relevant decisions in the New Jehangir Mills1 and the Petlad Co Ltd 2 
Before we part with this appeal however we would like to add that in the course of the debate in the present appeal Rule 39 of the Income tax Appellate Tribunal Rules was incidentally referred to though neither party based any argument on it
That being so the question as to the true scope and effect of the provisions contained in the said Rule does not fall to be considered in the present proceedings and we express no opinion on it
There would be no order as to costs throughout
Appeal allowed and remanded


Summary:
The appellant was a company registered in the erstwhile Baroda State
In connection with the assessment year 1942 43 the Income tax Officer Ahemdabad held that certain sale proceeds were received by the appellant in British India and the profit thereon was taxable under the Indian income tax Act 1922
One of the items in dispute related to the sale proceeds collected by collecting cheques on British India Shroffs and Merchants
In respect of the said item the Appellate Assistant Commissioner as well as the Appellate Tribunal decided against the appellant and thereafter reference was made to the High Court
The High Court felt that it required further facts to decide the reference and twice remanded the case to the Tribunal for investigation of those facts
The Tribunal after taking evidence submitted a supplementary Statement of Case on each occasion
Finally the High Court decided the question against the appellant but granted it a certificate of fitness to appeal to the Supreme Court
It was contended on behalf of the appellant that the High Court had no jurisdiction to direct the Tribunal to collect additional material and make it a part of the supplementary Statement of Case under section 664 as had been decided by this Court in the cases of the Petlad Co and the New Jahangir Mills
On behalf of the Revenue it was contended that these two cases required reconsideration
The Court therefore had to consider whether it should review and revise its earlier view taken in the said two cases
HELD  i The view contended for on behalf of the Revenue namely that the High Court had power to ask the Tribunal to investigate further facts and submit a supplementary Statement of Case was a reasonably possible view
But on the other hand the opposite view taken by this Court in the Petlad Co case and the New jahangir Mills case was also reasonably possible
The latter view had been followed by this Court on several occasions and it had regulated the procedure in reference proceedings in the High Courts ever since the decision in the New Jahangir Mills case was pronounced
Besides no reported decision had been cited at the bar where the question about the constitution of section 664 was considered and decided in favour of the view con tended for by the Revenue
No case therefore was made out for a revision or review of the Court s decisions in the Petlad Co and New Jahangir Mills cases
928 C F Case law discussed
The New jahangir Vakil Mills Ltd vs Commissioner of Income tax Bombay North  and  The Petlad Turkey Red Dye 909 Works Co Ltd Petland vs Commissioner of Income tax Bombay Ahemdabad 1963 Supp
1 SCR 871 affirmed
ii The principle of stare decisis cannot be pressed into service in cases where the power of this Court to reconsider and revise its earlier decisions is invoked because that power is inherent in this Court but nevertheless the normal principle that judgments pronounced by this Court would be final cannot be ignored
Unless considerations of a subs tantial and compelling character make it necessary to do so this Court should and would be reluctant to review and revise its earlier decisions
923 B D Bengal Immunity Company Ltd vs State of Bihar  distinguished
iii If the Court is satisfied that its earlier decision was clearly erroneous it should not hesitate to correct the error but before a previous decision is pronounced to be plainly erroneous the Court must be satis fied with a fair amount of unanimity amongst its members that a revision of the said view is fully justified
It is not possible or desirable and in any case it would be inexpedient to lay down any principles which should govern the approach of the Court in dealing with the question of reviewing and revising its earlier decisions
It would always depend upon several relevant considerations What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based  On the earlier occasion did some patent aspects of question remain unnoticed or was the attention of the Court not drawn to any relevant and material statutory provision or was any previous decision of this Court bearing on the point not noticed  Is the Court hearing such plea fairly unanimous that there is such an error in the earlier view What would be the impact of the error on the general administration of law or on public good  Has the earlier decision been followed on subquent occasions either by this Court or by the High Courts  And would the reversal of the earlier decision lead to public inconvenience hardship or mischief  These considerations become still more significant when the earlier decision happens to be a unanimous decision of a Bench of five learned Judges of this Court 922 B F