P (PLP)

MUHAMMAD MUNIR, C. J.

‑This is an assessee's application under subsection (2) of section 66 of the Income‑tax Act praying that the Appellate Tribunal be required to state a question of law arising out of their order under section 33 of that Act. The assessee is a Hindu undivided family carrying on the business of printing, publishing and selling of books at Lahore under the firm named R. S. Munshi Gulab Singh & Sons. For several years before the assessment in question the assessee had been making some payments to a rival concern called Uttar Chand Kapur & Sons under arrangements the object of which was to eliminate competition and to ensure a substantial monopoly in a particular line of the business. These payments were claimed by the assessee as admissible deductions under section 10 (2) (xii) on the ground that they were business expenses. The Income‑tax authorities, however, consistently disallowed these payments on the ground that they were " hush money to stop competition or an expenditure to secure business". On the assessee's application the question whether this view of the Income‑tax authorities was correct was referred to the High Court under section 66 (1) in respect of assessments for the years 1938‑39, 1939‑40, 1940‑41 and 1941‑

42. In the case of the assessment for the year 1942‑43 with which we are concerned in the present case the assessee took up a difficult position by setting up a partnership with Uttar Chand Kapur & Sons and claiming that the profits of the alleged partnership business should be computed separately and the assessee's share therein added to his income from other business. The Income‑tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal all found that no genuine partnership had been entered into by the assessee with Uttar Chand Kapur & Sons and that the arrangements set up were merely intended to camouflage the position that had hitherto existed in regard to such payments. The profits of the alleged partnership business were therefore added to the assessee's profits from the publishing business. During these proceedings the assessee did not claim these payments to be business expenses under section 10 (2) (xii). The Tribunal's appellate order was passed on 19th February 1945 and notice of that order was served on the assessee on 31st March‑ 1945. On 12th May 1945 the assessee put in an applica tion before the Tribunal under section 66 (1) requiring the Tribunal to state the following two questions of law to the High Court :‑‑ (1) Whether there was material for the Tribunal to hold that the agreement (between R S. Munshi Gulab Singh & Sons and Messrs. Attar Chand Kapur & Sons) was not intended by the parties to have real effect as governing their rights and obligations.? (2) Whether the amount of the share received by Messrs. Attar Chand Kapur & Sons has rightly been included in the assessable income of the assessee ? On 19th October 1945 the High Court replied to the reference which had been made to it for the four assessment years preceding 1942‑43, saying that the payments made by the assessee to Uttar Chand Kapur & Sons under the arrangements disclosed in the proceedings for assessments for those years were not a capital expenditure but a revenue expenditure admissible under section 10 (2) (xii). On 28th February 1946 the assessee made another application to the Appellate Tribunal requiring them to refer to the High Court the following question in place of the original two questions :‑ "Whether the deduction claimed on account of payment to Messrs. Uttar Chand Kapur & Sons is not permissible under section 10 (2) (xii) of the Act. By their order dated the 4th April 1946 the Appellate Tribu nal held that the new question suggested by the assessee had never been raised by him either before them or before the Appellate Assistant Commissioner or the Income‑tax Officer and that, therefore, it could not be referred to the High Court. The assessee then made the present application to the High Court. There can be no doubt that in the course of assessment proceed ings for the year 1942‑43 the assessee never raised the question which he now requires the Appellate Tribunal to state. In fact the position taken up by him was wholly inconsistent with the position that he has now adopted after the decision of the High Court. His case before the Income‑tax authorities was that there existed a partnership between him and Uttar Chand Kapur & Sons and that his own share in the profits of that partnership business should be added to his other income. Not one word was said by him before those authorities in regard to the payments made to Uttar Chand Kapur & Sons. The Tribunal were, therefore, right in refusing to state the case. The law is clear on the point that it is only a question raised before the Appellate Tribunal that can be referred to the High Court under section

66. Reference may in this connection be made to A.

1. R. 1948 Madras 181 (Messrs, A. Abboy Chetty and others v. Commissioner of Income‑tax, Madras) and A. I. R. 1935 Lahore 201 (Jamna Dhar Potdar Co. v. Commissioner of Income‑tax;. Punjab). To the same effect are observations in the Full Bench case of five judges in A. I. R. 1944 Lahore 353 (Gurmukh Singh v. Cdrrr ‑9nissioner of Income‑tax Lahore). The petition must also fail on another ground. Under section 66 (1) the assessee can require the Tribunal to state the case within sixty days of the date upon which he is served with the notice of an order under subsection (4) of section

33. Such notice was served on the assessee on 31st March 1945. Therefore the time for the assessee to require the present question to be stated expired on 30th May 1945. The application requiring this part of the case to be stated,. however, was made by the assessee long afterwards, namely, on 28th February 1046, qua this question; therefore, the application before the Tribunal was barred by time and they had no jurisdiction to state the case. This result follows from the plain terms of the section as well as from I. L. R. 53 Madras 510 (S. A. Subbish Ayyar, v. The Commis sioner of Income‑tax Madras), A. I. R. 1928 Madras 889 (In the matter of the income‑tax assessment of P. Thiruvendgada Mudaliar) and A. I. R. 1937 Lahore 876 (Merchand Mohini Flour Mills Co Ltd., v. Commissioner of Income‑tar). We have been asked to condone the delay but we have no jurisdiction to do so because subsection (7) (a), which gives to this Court the power to apply section 5 of the Limitation Act, is applicable only to applications to the High Court under subsection (2) or subsection (3) of section 6&df the Income‑tax Act. and it is .not at all appli cable to applications before the Tribunal. Even if we had the jurisdiction to extend time, this is obviously not a fit case in which we should have exercised our discretion because the point now raised is wholly inconsistent with the position that the assessee had taken throughout the proceedings for assessment for the year in question. The application is dismissed with costs. A. H Application dismissed.