P L D 1960 Dacca 621 (PLP)

AKBAR, J.‑In this case the Income‑tax Appellate Tribunal has referred the following question of law for the decision of this Court under section 66 (2) of the Income‑tax Act: "Whether in the facts and circumstances of the case the assessee is a resident and ordinarily resident in Pakistan during the relevant year ?" As the two reference cases and the two applications are identical in fact, the Tribunal has submitted one statement of facts. The said statement is as follows: "The return for the tax year 1948‑49 filed by Comilla Banking Corporation left the point relating to status "whether resident and ordinarily resident", "resident but not ordinarily resident", or "not resident" undeclared, the alternatives in the form of verification were not scored out. The Income‑tax Officer recorded in his assessment order with respect to Comilla Banking Corporation that for purposes of section 4‑A the company was clearly resident in Pakistan. The Income‑tax Officer completed the assessment for 1948‑49 on the status of a resident and ordinarily resident. In the grounds of appeal filed under section 30 one of the grounds was that the officer had wrongly determined the status of the assessee. This ground was specifically withdrawn under his signature by the authorised Pleader Mr. L. M. Bhattacharjee. That is the reason why the Appellate Assistant Commissioner did not discuss the question of residence, namely whether resident or non‑resident. As to the other Bank namely Bengal Central Bank ‑Limited the declaration relating to status was similarly left un‑indicated in the return. The Income‑tax Officer considered the question of residence in his assessment order and came to the conclusion that as the previous was the calendar year 1947 and as up to 14th August 1947, the head Office was in the British India the company was resident and ordinarily resident for the purpose of assessment for 1948‑

49. One of the grounds taken before the Appellate Assistant Commissioner in this case also was that the Income‑tax Officer had wrongly held that the assessee was resident and ordinarily resident. The authorised Pleader in his own hand‑writing noted against this ground (ground No. 1) "not pressed". The Appellate Assistant Commissioner accordingly did not consider the question of status in his order under section

31. When the two banks came before the Tribunal they did not raise the question of status but in ground No. 2 it was claimed that the Income‑tax Officer in assessing the bank as resident and ordinarily resident in Pakistan should calculate the tax on the income as per schedule of the agree ment at Pakistan rate, and that items not bearing any tax as per schedule only be included for rate purposes. The objections taken in the two appeals before the Tribunal were identical by the two banks. Accordingly the Tribunal in its order under section 33 did not consider the question of status (resident or non‑resident). The same lawyer who had withdrawn the ground relating to status before the Appellate Assistant Commissioner handled the appeals before the Tribunals also. It was in the reference applications under section 66 (1) that the banks revised the objection that whether in the facts of the case the assessee was a resident and ordinarily resident in Pakistan during the relevant year. The Tribunal has passed its order under section 33 on the footing that the question of status had been withdrawn by the banks. We may say not only was this point not argued either before us or before the Appellate Assistant Commissioner but as a matter of fact the point was expressly withdrawn by the authorised pleader. The head office of both the banks was situated in India and it would appear that the control and management was from Calcutta and income of the branches in India exceeded the income arising from branches in Pakistan during the accounting year. This is true of both the banks. We may refer to the decision of the Supreme Court in the case of Imperial Tobacco Company of India Limited v. Commissioner of Income‑tax, South Zone, Karachi P L D 1958 S C (Pak.)

125. We accordingly submit the above statement to the Hon'ble High Court." Mr. Guha, appearing for the assessee‑Bank, has contended that, in view of the last paragraph of the statement, we shall answer the question in the negative. Mr. Mesbabuddin, the learned Advocate for the Income‑tax Commissioner, has raised the following two points in this case: (1) that the assessee in their grounds of Appeal raised the question of status but the lawyer did not press that ground and hence this question ought not to have been referred to this Court ; and (2) that as the assessee did not raise the question of status in their application under section 66 (1) before the Tribunal, they were not entitled to raise this question before the High Court in their application under section 66 (2) of the Act. In support of his contention, he has relied on the following decisions: (1) Gurmukh Singh v. Commissioner of Income‑tax, Lahore A I R 1944 Lah. 353 (F B) and (2) New Jehangir Vakil Mills Ltd. v. Commissioner of Income- tax, Bombay North, Kutch and Saurashtra (1959) 37 I T R

11. In this case the references being Reference Case No. 4 and 5 were at first made to this Court by the Income‑talc Appellate Tribunal at the instance of the assessee‑Banks under section 66 (1) of the Income‑tax Act. The grievance of the Banks before this Court was that the Tribunal was not justified in refusing to refer the question ; whether on the facts and circumstances of the case the assessee was ordinarily resident in Pakistan during the relevant assessment year. They also contended that the Tribunal erroneously took the view that this point was not raised either before the Appellate Commissioner or before the Tribunal at the time of hearing of the appeal and therefore could not be raised before them for reference to the High Court. The High Court, therefore, issued Rules on the Tribunal to show cause why they should not be directed to state the case and refer to this Court for decision of the following point, namely‑-- " Whether on the facts and circumstances of the case the assessee is a resident and ordinarily resident in Pakistan during the relevant year." The Court also directed that the Rule will be heard along with the Reference Cases No. 4 and 5 of 1958. During hearing of the Rules, Mr. Mesbahuddin, the learned Advocate for the Commissioner, contended that the point canvassed by the assessee was not specifically raised before the Income‑tax Authorities and therefore the assessee was not entitled to raise the said question for the first time before the High Court. The Court, while dealing with this contention, observed :‑ " We have examined the entire records to ascertain whether or not this point was taken by the assessee expressly or by implication. We find that this point was agitated right from the beginning before the Income‑tax Officer and Appellate Assistant Commissioner and then before the Tribunal. It may be that the point was not argued in so many words as to whether assessee is a resident and ordinarily a resident in Pakistan." The Court, after referring to the statement of the Bank, and to the grounds taken by them before the Income‑tax Authorities, observed :‑ "From the above, it is quite clear that this point was urged in some form or other though not in so many words before all the authorities concerned and we do not see any reason why the Tribunal refused to make any reference to us on this very important point of law in respect of which these two rules have been issued." Hence the Court made the Rules absolute and directed the Tribunal to state a case under section 66 (2) of the Act. It is thus clear that Mr. Mesbahuddin is again trying to raise before us the identical question which he had raised before the High Court in the above Rules. In other words, he is challenging the correctness of the decision of the Court in the above Rules. This, in our opinion, he is not entitled to do. The assessee and the Commissioner has been given a right to come to the High Court under section 66 (2) of the Act and the High Court, if it is not satisfied that the decision of the Appellate Tribunal is correct can require the Tribunal to state the case and refer it and when that is done the Appellate Tribunal is under an obligation to state the case and refer it .to the High Court for their decision, and under section 66 (5) the High Court, after hearing the case referred to them, has to decide the question of law raised‑ by that case and deliver the judgment. It is thus clear that, while hearing the case under section 66 (2), we cannot sit on judgment on the propriety of the order of the High Court asking the Tribunal to state the case and refer it to the High Court. If the Income‑tax department was not satisfied with the order of the High Court asking the Tribunal to state a case, they could have preferred an appeal against it. They however did not do so. Hence we have no power to revise the order of this Court asking the Tribunal to state a case and to refer it to the High Court. Here we may point out that the cases on which Mr. Mesbahuddin has relied are not of much help to him in this reference. In the Lahore case, the Full Bench held: (1) that the High Court can determine the proper form of question to be decided but cannot raise new question ; and, (2) that the assumption of fact at the time of issue of mandamus if incorrect do not bind the Bench hearing the reference. This case cannot be regarded as an authority for the proposition that this Bench can look into the propriety of the order made under section 66 (2) requiring the Tribunal to state a case. Similarly, in New Jehangir Vakil Mills Ltd. v. Commissioner of Income‑tax, Bombay North, Kutch and Saurashtra reported in ((1959) 37 IT R 11), the Supreme Court of India, while considering the scope and subject‑matter of the reference under section 66 (2), observes: " . . . . under the guise of that direction the High Court cannot refer the case back to the Tribunal to find new facts or embark upon a new line of enquiry which would enable either the assessee or the Commissioner to make out a case which had never been made during the course of the proceedings before the Income‑tax authorities or the Tribunal so far." As already stated, if the Bench had really referred the case back to the Tribunal to find new facts and to embark upon a new line of enquiry, in that event the aggrieved party should have agitated that question in a higher Court. This was however not done. As already stated, we are not competent to enter into the question of the propriety of that order in this reference. We may here observe that the duty of this Court in such cases is either to answer the question referred by the Tribunal or, if the Court feels that the question was not fairly raised to re‑frame the question or modify the question and to answer the question as reformulated or modified. In this view of the matter, we are unable to enter into the question of the propriety of the order of the, High Court requiring the Tribunal to state a case and refer it to this Court. Now the Tribunal has clearly stated in their statement: "The head, office, of both the banks was situated in India and it would appear that the control and management was from Calcutta and income to the branches in India exceeded the income arising from branches in Pakistan during the accounting year. This is true of both the banks." It is well‑settled that when a case involves a question of fact the jurisdiction of the High Court to interfere with the finding of the Tribunal is of a very limited character. If the Tribunal decides a question of fact recklessly and without any material at all and if the Tribunal decides a question of fact by applying a wrong principle, the High Court has jurisdiction to interfere. Mr. Mesbahuddin has been candid enough to say that the above-quoted finding of the Tribunal is quite correct. Hence, in the light of the decision of the Supreme Court in the case of Imperial Tobacco Company of India Limited v. Commissioner of Income‑tax, South Zone, Karachi reported in (P L D 1958 S C (Pak.) 125 : 1959 P T D 21), it must be held that the assessee was not a resident or ordinarily resident in Pakistan during the relevant year. We, therefore, answer tile question referred by the Appellate Tribunal in the negative. There will however be no order as to the costs of this Reference. M. ASIR, J.‑I agree. M. N. Reference answered in negative.