Case: M/S. Zoraster And Co Vs. The Commissioner Of Income Tax, Delhi, Ajmer, Rajasthan A

Concessions Order applied to the assessee, a matter not touched by the Tribunal. Thus, though the result is the same so far as the assessment is concerned, the grounds of decision are entirely different...... ...... .... ...... .....Section 66 of the Income-tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal. It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order. It is possible that the same question of law may involve different approaches for its solution, and the High Court may amplify the question to take in all the approaches. But the question must still be the one which was before the Tribunal and was decided by it. It must not be an entirely different question which the Tribunal never considered.14. It follows from this that the enquiry in such cases must be to see whether the question decided by the Tribunal admits the consideration of the new point as an integral or even an incidental part thereto. Even so, the supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal, and should not open the door to fresh evidence. The fact that in Ogale Glass Works case, I. T. Ref. No. 19 of 1949, D/- 17-9-1951 (Bom), the Bombay High Court had asked for a supplemental statement in the same way as in the Jehangir Vakil Mills case, 1960-1 SCR 249 : (AIR 1959 SC 1177 ), and this Court did not rule out the new matter, cannot help the assessee in the present cases because the jurisdiction of the High Court was not questioned, as it had been done in the Jehangir Vakil Mills case, 1960-1 SCR 249 : (AIR 1959 SC 1177 ), or has been done here. We have thus to see whether in this case the question which was decided and which has been referred to the High Court admits the return of the case for a supplemental statement on the lines indicated by the High Court in the order under appeal.15. At the very start, one notices a difference in the question of law in this case and the Ogale Glass Works case, 1955-1 SCR 185 : (AIR 1954 SC 429 ), on the one hand, and the question of law in the Jehangir Vakil Mills case 1960-1 SCR 249 : (AIR 1959 SC 1177 ), on the other. In the former two cases, the question is very wide, while in the latter it is extremely narrow. This can be seen by placing the three questions side by side as below:Jehangir Vakil Mills case, 1960-1 SCR 249 : (AIR 1959 SC 1177 ): "Whether the receipt of the cheques in Bhavnagar amounted to receipt of the sale proceeds in Bhavnagar?Ogale Glass Works case, 1955-1 SCR 185 : (AIR 1954 SC 429 ): "Whether on the facts of the case, income, profits and gains in respect of sales made to the Government of India was received in British India within the meaning of Sec. 4(1)(a) of the Act?"This case: "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 taxable territories?16. It is thus quite plain that the question as framed in this case can include an enquiry into 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 Works case, 1955-1 SCR 185 : (AIR 1954 SC 429 ), or Jagdish Mills case, 1960-1 SCR 236 : (AIR 1959 SC 1160 ).The first limit to the jurisdiction of the High Court as laid down by this Court is thus not exceeded by the High Court in exercising its powers under S. 66(4) of the Income-tax Act. The question is wide enough to include the alternative line of approach that if there was a request, express or implied, to send the amount due under the bills by cheque, the post office would be the agent of the assessee, and the income was received in the taxable when the cheques were posted.16-a. The next question is whether the High Court has transgressed the second limitation implicit in S. 66(4), that is to say, that the question must arise out of the facts admitted and/or found by the Tribunal. The High Court has observed that,".....it would be necessary for the Appellate Tribunal to find inter alia 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 that matter.If the Tribunal has to make a fresh enquiry leading to the admission of fresh evidence on the record, then this direction offends against the ruling of this Court in the Jehangir Vakil Mills case, 1960-1 SCR 249 : (AIR 1959 SC 1177 ). If, however, the direction be interpreted to mean that the Tribunal in giving the finding must confine itself to the facts admitted and/or found by it, the direction cannot be described as in excess of the jurisdiction of the High Court. It would have been better if the High Court had given direction confined to the record of the case before the Tribunal; but, in the absence of anything expressly to the contrary, we cannot hold that the direction would lead inevitably to the admitting of fresh evidence. This, at least, now cannot be done, since the Jehangir Vakil Mills case, 1960-1 SCR 249 : (AIR 1959 SC 1177 ), has prohibited the admission of fresh evidence. In our opinion, the present case does not fall within the rule in the Jehangir Vakil Mills case, 1960-1 SCR 249 : (AIR 1959 SC 1177 ), and is distinguishable.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8. Jagdish Mills case, 1960-1 SCR 236  : (AIR 1959 SC 1160 ) and the New Jehangir Vakil Mills case 1960-1 SCR 249  : (AIR 1959 SC 1177 ) were decided by this Court on the same day. In the latter case, the Department had to deal with a non-resident Company which, at all material times, was situate at Bhavnagar, one of the Indian States. Cheques in payment for supplies to Government were sent from British India to Bhavnagar. The Department contended in the case that though the cheques were received at Bhavnagar, they were, in fact, cashed in British India and until such encashment, income could not be said to have been received but that on encashment in British India, the receipt of income was also in British India. The Tribunal held that the cheques having been received at Bhavnagar the income was also received there. In doing so, the Tribunal followed the Bombay decision in Kirloskar Brothers case, 1952-21 ITR 82  : (AIR 1952 Bom 306 ). The Tribunal, however, observed that if the Bombay view which was then under appeal to this Court were not upheld, then an enquiry would have to be made as to whether the Mills bankers at Ahmedabad acted as the Mills agents for collecting the amount due on the cheques. The question whether the posting of the cheques from British India to Bhavnagar at the request, express or implied, of the Mills or otherwise, made any difference was not considered at any stage before the case reached the High Court of Bombay.The reference was held back by the Tribunal till the decision of this Court in Ogale Glass Works case, 1955-1 SCR 185  : (AIR 1954 SC 429 ) and Kirloskar Brothers case, 1954-25 ITR 547  : (AIR 1954 SC 504 ). Even after seeing that in those two cases the request for payment by cheques to be sent by post made all the difference, the Tribunal did not frame its statement of the case or the question to include this aspect, because that aspect of the matter was never considered before. The question referred was thus limited to the legal effect of the receipt of the cheques at Bhavnagar without advertence to the fact whether the cheques were so sent by post at the request, express or implied, of the Mills.the question as framed and the statement which accompanied it brought into controversy the only point till then considered by the Tribunal and the taxing authorities. When the case was heard by it, the High Court desired to consider it from the angle of the Kirloskar Brothers. 1952-21 ITR 82  : (AIR 1952 Bom 306 ) and Ogale Glass works, 1955-1 SCR 185  : (AIR 1954 SC 429 ) cases. It called for a supplemental statement of the case. In doing so, the High Court went beyond the ambit of the controversy as it had existed till then and also the statement of the case and the question.It was also pointed out that the facts admitted and or found by the Tribunal could alone be the foundation of the question of law which might be said to arise out of the Tribunals order. The case thus set two limits to the jurisdiction of the High Court under S. 66(4), and they were that the advisory jurisdiction was confined (a) to the facts on the record and/or found by the Tribunal and (b) the question which would arise from the Tribunals order. It was pointed out by this Court that it was not open to the High Court to order a fresh enquiry into new facts with a view to amplifying the record and further that it was equally not open to the High Court to decide a question of law, which did not arise out of the Tribunals order. This was illustrated by comparing the question as framed by the Tribunal with the question which the High Court desired to decide.It follows from this that the enquiry in such cases must be to see whether the question decided by the Tribunal admits the consideration of the new point as an integral or even an incidental part thereto. Even so, the supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal, and should not open the door to fresh evidence. The fact that in Ogale Glass Works case, I. T. Ref. No. 19 of 1949, D/- 17-9-1951 (Bom), the Bombay High Court had asked for a supplemental statement in the same way as in the Jehangir Vakil Mills case, 1960-1 SCR 249 : (AIR 1959 SC 1177 ), and this Court did not rule out the new matter, cannot help the assessee in the present cases because the jurisdiction of the High Court was not questioned, as it had been done in the Jehangir Vakil Mills case, 1960-1 SCR 249  : (AIR 1959 SC 1177 ), or has been done here. We have thus to see whether in this case the question which was decided and which has been referred to the High Court admits the return of the case for a supplemental statement on the lines indicated by the High Court in the order under appeal.It is thus quite plain that the question as framed in this case can include an enquiry into 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 Works case, 1955-1 SCR 185 : (AIR 1954 SC 429 ), or Jagdish Mills case, 1960-1 SCR 236 : (AIR 1959 SC 1160 ).The first limit to the jurisdiction of the High Court as laid down by this Court is thus not exceeded by the High Court in exercising its powers under S. 66(4) of the Income-tax Act. The question is wide enough to include the alternative line of approach that if there was a request, express or implied, to send the amount due under the bills by cheque, the post office would be the agent of the assessee, and the income was received in the taxable when the cheques were posted.