A C METAL WORKS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal, Bombay Bench "C", under section 66(2) of the Indian Income-tax Act, 1922, which will hereinafter be referred to as the "Act". The question, which has been referred for our answer, runs as follows :

(2.) MESSRS. A. C. Metal Works, Jodhpur, which will be referred as the "assessee" hereafter, was carrying on the business of manufacturing and sale of umbrellas. He purchases some aero-scraps from time to time. They were stocked at a place called Rani and then sold through one Tejraj Jaswantraj to a Bombay party in the assessment year 1957-58 to which the present reference relates. Out of the amounts realised from these sales, Rs. 9,650 was credited by the assessee to the machinery account and Rs. 13,279 to the capital account. When the assessee was asked to explain these entries, it was submitted by him that these were sales of unutilised construction materials. The invoices for these sales, however, showed that they were sales of machinery parts. When Tejraj Jaswantraj was examined, he stated that the items dealt with were aero-scraps. As against the return income of Rs. 6,012, the assessee was therefore assessed on a total income of Rs. 47,489 which included the above amount of Rs. 22,929. Thereafter, the Income-tax Officer took proceedings against the assessee under section 28(1) (c) read with section 28(3) of the Act and issued a notice dated February 24, 1959, to show cause why an order imposing penalty should not be made against him for concealment of particulars of income. The Income-tax Office, who issued this notice, was Shri B. R. Kumbhat. The assessee was requested to appear on March 24, 1959, at 10 a.m. to show cause why an order imposing penalty upon him should not be made under section 28(1) of the Act. The notice was served on the assessee on February 26, 1959. There was no appearance on his behalf on March 24, 1959. He, however, sent a written reply dated March 30, 1959, which has been marked as annexure "A" in this case. That reply was very brief and may be reproduced here. It was as follows :

(3.) BEFORE parting with the case, it may be mentioned that learned counsel for the assessee during the course of oral arguments raised a contention before us to the effect that Shri N. L. Jain had signed his order dated July 30, 1959, mechanically without going into the record. We cannot enter into the merits of this allegation because it is beyond the scope of the question which has been referred to us. It is well settled that the jurisdiction of this court while answering the question under section 66 of the Act is purely advisory and limited to answering the point or points referred to us. In Petlad Turkey Red Dye Works Co. Ltd. v. Commissioner of Income-tax it was observed by their Lordships of the Supreme Court after referring to a number of earlier decided cases that the jurisdiction of the High Court is advisory under section 66 of the Income-tax Act. Under that section a question of law can be referred soliciting its opinion but the jurisdiction of the High Court is confined to giving an opinion on that question of law arising out of the order of the Appellate Tribunal. It has no jurisdiction to raise another question or to answer a different question. If the assessee wanted to question the validity of Shri N. L. Jains order on the ground that he had signed it mechanically without applying his mind as a quasi-judicial functionary, the proper course for him was to raise it before the Tribunal. We find that he did not raise this question in the application which he had filed before the Appellate Tribunal for a reference. Again, in the application, which he filed before this court for calling for a reference under section 66(2), of the Act, he did not raise this question. In the order which was passed by the learned judges of this court on November, 15, 1962, there is no discussion about such a contention. They directed the Tribunal to refer only one question which has been set out above. We, therefore, reject his oral prayer to raise a fresh question at this stage.