Case: Commissioner Of Income-Tax (Central),New Delhi Vs. M/S. S. Zoraster &amp; Company

fitness, it is inevitable that there should be some discussion about the nature of the questions that arose for decision before the Bench which answered the Reference. 14. While we agree with Mr. Dhebar that reasons for granting the certificate must be given by the learned Judges in the order, those reasons, however, in our opinion, must be confined to the material on record, which must have been before the Court which dealt with an appeal or Reference and in respect of which decision, the aggrieved party desires to come in appeal to this Court on certificate on the ground that a substantial question of law arises for consideration. 15. We are not inclined to accept the contention of Mr. Dheber that the High Court has properly exercised its jurisdiction in certifying that the two cases are fit for appeal to this Court. We must frankly admit that when we went through the order of the High Court granting the certificates, we felt that the learned Judges were either sitting in appeal over the judgment of the Division Bench, which answered the Reference, or were themselves dealing with the Reference under S. 66 (1) of the Act, in the first instance. Unless the learned Judges were exercising one or the other of the above jurisdiction, the criticism about the approach made by the Division Bench when answering the Reference, could not be justified." It is clear that when dealing with application for grant of certificate of fitness, the court was exercising no such jurisdiction. It must be emphasised that in the circumstances like this, the Jurisdiction of the Court, at the stage of dealing with application for grant of certificate is limited only to considering whether any substantial question of law arises having due regard to the material on record and the discussion on facts and law contained in the judgment of the High Court which dealt with the appeal or Reference or any other proceeding, as the case may be. 16. Regarding the question that the assessee may be considered to have received the payments at Bombay, the learned Judges have quite rightly declined to grant a certificate on the ground that the point is covered by the decisions of this Court and that no substantial question of law arises. 17. As we have already pointed out the certificate has been granted by the learned Judges on the basis that the general question whether a presumption under S. 114 illustration (f) of the Evidence Act can be raised is of great importance and that it is likely to arise in many future cases not restricted to income-tax. It should be remembered that this Court should not be invited to decide any question of law much less the substantial question of law purely in the abstract. Such question of law must reasonably arise on the basis of the material on record. Further, the substantial question of law, in order to be certified as fit to be decided by this Court must arise on the facts of a particular case. With great respect to the learned Judges who dealt with the application for grant of certificate, we are constrained to remark that they have ignored the finding of fact recorded by the Appellate Tribunal in its supplementary statement dated March, 18, 1961 that the Revenue has placed no materials to prove that the cheques were posted at Delhi. It should be remembered that when the reference was made in the first instance, the Punjab High Court felt that the Appellate Tribunal had not given any finding as to whether the cheques in question were sent to the assessee by post and whether the assessee had given any direction in that regard to the Government of india. In view of the absence of such a finding, the High Court by its order dated March 24, 1955 called for a supplementary statement from the Appellate Tribunal under S. 66 (4) of the Act. This order was challenged before this Court by the assessee unsuccessfully. The purpose of seeking a supplementary statement was to focus the attention of the Appellate Tribunal to this aspect, namely, the posting of cheques claimed to have been done at Delhi by the Government of India. That the Revenue miserably failed to establish the fact of posting of cheques at Delhi, is clear from the finding recorded by the Appellate Tribunal in its supplementary statement, which finding has been accepted by the High Court in its judgment dated February 21, 1967 when aswering the Reference. The High Court has also then recorded a finding that the Revenue has failed to place any material before the Appellate Tribunal to prove that the cheques in question were being sent by the Government of India through post. Unfortunately, all these aspects have been missed by the learned Judges when dealing with the applications filed by the Revenue for the grant of certificates. 18. On the above findings recorded by the Appellate Tribunal and confirmed by the High Court, no question of applying any presumption under S. 114 of the Evidence Act arises for consideration. The learned Judges, dealing with the applications for grant of certificates, had no jurisdiction to go behind the finding recorded in the original judgment disposing of the Reference. In our opinion, the entire discussion on this aspect of posting of the cheques at Delhi by the learned Judges is beside the point, as that question no longer was available to the Revenue, in view of the finding recorded against it, to which we have made a reference earlier. 19. When once the question of a presumption under S. 114, illustration (f) of the Evidence Act does not fall to be considered in these proceedings, in view of the specific finding recorded by the Appellate Tribunal against the Revenue, and accepted by the High court, in our opinion, the High Court was not justified in certifying, on this ground, that the cases are fit for appeal to this Court.

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

Explanation:
1[ds]14. While we agree with Mr. Dhebar that reasons for granting the certificate must be given by the learned Judges in the order, those reasons, however, in our opinion, must be confined to the material on record, which must have been before the Court which dealt with an appeal or Reference and in respect of which decision, the aggrieved party desires to come in appeal to this Court on certificate on the ground that a substantial question of law arises for consideration15. We are not inclined to accept the contention of Mr. Dheber that the High Court has properly exercised its jurisdiction in certifying that the two cases are fit for appeal to this Court. We must frankly admit that when we went through the order of the High Court granting the certificates, we felt that the learned Judges were either sitting in appeal over the judgment of the Division Bench, which answered the Reference, or were themselves dealing with the Reference under S. 66 (1) of the Act, in the first instance. Unless the learned Judges were exercising one or the other of the above jurisdiction, the criticism about the approach made by the Division Bench when answering the Reference, could not be justified." It is clear that when dealing with application for grant of certificate of fitness, the court was exercising no such jurisdiction. It must be emphasised that in the circumstances like this, the Jurisdiction of the Court, at the stage of dealing with application for grant of certificate is limited only to considering whether any substantial question of law arises having due regard to the material on record and the discussion on facts and law contained in the judgment of the High Court which dealt with the appeal or Reference or any other proceeding, as the case may be16. Regarding the question that the assessee may be considered to have received the payments at Bombay, the learned Judges have quite rightly declined to grant a certificate on the ground that the point is covered by the decisions of this Court and that no substantial question of law arises17. As we have already pointed out the certificate has been granted by the learned Judges on the basis that the general question whether a presumption under S. 114 illustration (f) of the Evidence Act can be raised is of great importance and that it is likely to arise in many future cases not restricted to. It should be remembered that this Court should not be invited to decide any question of law much less the substantial question of law purely in the abstract. Such question of law must reasonably arise on the basis of the material on record. Further, the substantial question of law, in order to be certified as fit to be decided by this Court must arise on the facts of a particular case. With great respect to the learned Judges who dealt with the application for grant of certificate, we are constrained to remark that they have ignored the finding of fact recorded by the Appellate Tribunal in its supplementary statement dated March, 18, 1961 that the Revenue has placed no materials to prove that the cheques were posted at Delhi. It should be remembered that when the reference was made in the first instance, the Punjab High Court felt that the Appellate Tribunal had not given any finding as to whether the cheques in question were sent to the assessee by post and whether the assessee had given any direction in that regard to the Government of india. In view of the absence of such a finding, the High Court by its order dated March 24, 1955 called for a supplementary statement from the Appellate Tribunal under S. 66 (4) of the Act. This order was challenged before this Court by the assessee unsuccessfully. The purpose of seeking a supplementary statement was to focus the attention of the Appellate Tribunal to this aspect, namely, the posting of cheques claimed to have been done at Delhi by the Government of India. That the Revenue miserably failed to establish the fact of posting of cheques at Delhi, is clear from the finding recorded by the Appellate Tribunal in its supplementary statement, which finding has been accepted by the High Court in its judgment dated February 21, 1967 when aswering the Reference. The High Court has also then recorded a finding that the Revenue has failed to place any material before the Appellate Tribunal to prove that the cheques in question were being sent by the Government of India through post. Unfortunately, all these aspects have been missed by the learned Judges when dealing with the applications filed by the Revenue for the grant of certificates18. On the above findings recorded by the Appellate Tribunal and confirmed by the High Court, no question of applying any presumption under S. 114 of the Evidence Act arises for consideration. The learned Judges, dealing with the applications for grant of certificates, had no jurisdiction to go behind the finding recorded in the original judgment disposing of the Reference. In our opinion, the entire discussion on this aspect of posting of the cheques at Delhi by the learned Judges is beside the point, as that question no longer was available to the Revenue, in view of the finding recorded against it, to which we have made a reference earlier19. When once the question of a presumption under S. 114, illustration (f) of the Evidence Act does not fall to be considered in these proceedings, in view of the specific finding recorded by the Appellate Tribunal against the Revenue, and accepted by the High court, in our opinion, the High Court was not justified in certifying, on this ground, that the cases are fit for appeal to this Court.