Full Judgment Text
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PETITIONER:
M/S. SOORAJMULL NAGARMULL
Vs.
RESPONDENT:
COMMISSIONER OF INCOME-TAX, CALCUTTA(And connected appeal)
DATE OF JUDGMENT:
19/02/1962
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
DAS, S.K.
HIDAYATULLAH, M.
CITATION:
1963 AIR 491 1962 SCR Supl. (3) 306
ACT:
Income Tax-Order of Tribunal-Applications by assessee and
Commissioner of Income-tax to state a case, dismissed by,
High Court-Appeal to Supreme Court against order of Tribunal
-If maintainable-Indian Income-tax Act, 1922 (11 of 1922)
ss. 33(4), 66(2)-Constitution of India, Art., 136.
HEADNOTE:
The Income-tax Appellate Tribunal passed an order s. 33(4)
of the Indian Income-tax Art disposing of an appeal. The
assessee as well as the Commissioner of Income-tax,
Calcutta, applied to the High Court for orders requiring the
Tribunal to state a case under s. 66(2), which applications
were dismissed by the High Court. The assessee and the
Commissioner of Income-tax appealed to the Supreme Court
against the order of the Tribunal, with special leave. The
main contention before the Supreme Court was that even if
the appeal against the order of the High Court under s.
66(2) fails on merits, the court has power to consider the
appeal against the order of the Tribunal.
307
Held, that when the aggrieved party approaches the High
Court under a taxing statue for an order calling for a
statement of the case and the High Court rejects the appli-
cation, this Court in exercise of its powers under Art. let
of the Constitution of India will not in- the absence of
special or exceptional circumstances allow the order of the
High Court to be by-passed by entertaining an appeal
directly against the order of the Tribunal under the taxing
Act. The Supreme Court will take this view even if an
appeal has been filed against the order of the High Court as
well.
Chancdi Prasad Chhokhani v. State of Bihar, (1962) 2 S.C,R.
276, Dhakeswari Cotton Mille ltd. v. Commissioner of Income-
tax, West Bengal, [1955] 1 S.C.R. 941 and Sardar Baldev
Singh v. Commissioner of Income-tax, Delhi and Ajmer,
[1961]1 S.C.R. 482, followed.
JUDGMENT:
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CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 238 and 239
of 1961.
Appeals by special leave from the judgment and order dated
March 28, 1957, of the Income-tax Appellate Tribunal
(Calcutta Bench) in I.T.A. Nos. 722 and 7341 of 1954-55.
R.J. Kolah, D. H. Dwarkadas and B. P. Mahesh wari for the
appellant in C.A. No. 238 of 1961 and the respondent in C.A.
No. 239 of 1961.
K.N. Rajgopala Sastri and D. Gupta, for the respondent in
C.A. No. 238 of 1961 and respondent in C.A. No. 239 of 1961.
1962. February 19. The Judgment of the Court was delivered
by
SHAH, J.-The assessees and the Commissioner have preferred
appeals against the order of the Tribunal passed under s.
33(4) of the Indian Income-tax Act, after their applications
of the High Court of Calcutta for orders requiring the Tri-
bunal to state a case under s. 66(2) were dismissed.
Counsel for the assessees contends that even if his appeal
against the order of the High Court under s. 66(2) fails on
the merits, this Court has
308
power to consider their appeal against the order of the
Tribunal. This Court in Chandi Prasad Chhokhani v. The
State of. Bihar,(1) in dealing with cases where against the
order passed by a Tax Tribunal, without appealing against
the order of the High Court refusing to call for the
statement of the case set out the practice as follows:
(a) Where the aggrieved party approaches the
High Court under a taxing Statute for an order
calling for a statement of the case and the
High -Court rejects the application, this
Court in exercise of its powers under Art. 136
will not ordinarily allow the order of the
High Court to be by-passed by entertaining an
appeal directly against the order of the
Tribunal. Such exercise of power would be
particularly inadvisable where the result may
be conflict of decisions of two Courts of
competent jurisdiction. The scheme of the
taxing statutes is to avoid such a conflict by
making the decision of the taxing authorities
on questions of fact final subject to appeal,
revision or review as provided by the statutes
and the decision of the High Court subject to
appeal to this Court final on questions of
law.
(b) This rule does not bar the Court from
granting special leave where circumstances are
exceptional, such as, in Dhakeswari Cotton
Mills Ltd. v. Commissioner of Income Tax, West
Bengal, (2) where the Tribunal had violated
fundamental rules of justice or as in Sardar
Baldev Singh v. Commissioner of Income-tax,
Delhi & Ajmer (3), where on account of special
circumstances over which the aggrieved party
has no control the High Court was
(1) [1962] 2 S.C.R. 276. (2) [1955] 1. S.C.R.
94
(3) [1961] 1 S.C.R. 482.
309
unable to consider the application for calling
for a statement of the case on the merits, and
the right of the party to approach the High
Court was thereby lost.
Counsel for the assesses contended that in Chhokhani’s case
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(1) no appeal at all was filed by the assessees against the
order of the High Court and the principle of that case is
inapplicable in a case where the aggrieved party has
appealed against the order of the High Court as well as
against the) order of the Tribunal. . It is true that in the
case before us appeals have been filed against the order of
the Tribunal deciding the appeal under s. 33(4) of the
Indian Income-tax Act as well as the order of the High Court
under s. 66(2) refusing to require the Tribunal to state a
case: but we fail to see any distinction in principle
between a case in which in appealing against the order of
the Tribunal no appeal is filed against the order of the
High Court and a case in which an appeal is filed aganst the
order of the Tribunal as well as against the order of the
High Court and the latter appeal is dismissed because it has
no merit.
Counsel has not invited our attention to any special or
exceptional circumstances in this case. We have heard
elaborate arguments on behalf of the assessees and the
Commissioner on their respective contentions and for reasons
already set out are of opinion that no case is made out for
calling for a statement of the case from the Tribunal. If
we proceed to hear the appeal against the order of the
Tribunal after upholding the order of the High Court that no
question of law arose out of the order of the Tribunal, it
would be a departure from the well-settled rule that
ordinarily-we do not exercise of our jurisdiction under Art.
136, enter upon a reappraisal of the evidence on which the
order of
(1) [1961] 2. S.C.R. 276.
310
the Court or Tribunal is founded. The, Legislature has
expressly entrusted the power of appraisal of evidence to
the Taxing authorities, and the decision of those
authorities would ordinarily be regarded as final. This is
not to say that in a proper case this Court may not, in the
interest of justice when occasion demands it, review the
evidence. The power of this Court under Art. 136 is not
restricted; but it is only in very exceptional cases that
this Court enters upon appraisal of evidence in appeals
filed with special leave and this case does not disclose any
such exceptional circumstances.
On this ground the appeals Nos. 238 and 239 of 1961 filed by
the assessees and the Commissioner against the order of the
Tribunal must fail and are dismissed with costs. One
hearing fee.
Appeals dismissed.