1985 PLP 653 (PTD)

ABDUL QADEER CHAUDHRY, J.‑This is an application under section 66(2) of the income‑tax Act arising out of the following facts: The respondent is a private limited company engaged in the business of Kerosine Oil and other Petroleum products. For the year under reference while processing the return, of income the assessing officer observed that the declared sates of the respondent as well as the rate of gross profits was lower than that of the immediately preceding assessment year. He further noted that the shortage claimer in the Kerosine oil, was also high. Accordingly on the aforesaid ground an addition of Rs. 20,000 was made to the income of the assessee. Aggrieved by the said order of assessment the respondent filed an appeal before the Income‑tax Appellate Tribunal. The appellate tribunal held that the addition was excessive and reduced the same to Rs.7,500 on the ground that the assessee had submitted explanation for the fall in the sales and in the rate of gross profit. The applicant thereafter filed an application under section. 66(1) of the Income‑tax Act seeking reference to the High Court on the following question:‑ "Whether on the facts and in the circumstances of the case, the Tribunal was justified on the basis of the material on record in reducing the addition made by the income‑tax Officer instead of setting aside the assessment of appropriate adjudication after a proper examination of the relevant evidence and giving an opportunity to the assessee to produce such evidence in support of his claim as it deemed fit?" The Tribunal rejected the said application by order, dated 14‑1‑1975 holding that no question of law was involved in the matter requiring reference to the High Court. This application has been moved with a prayer to consider the above?mentioned question. The operative part of the order passed by the Income-?tax Appellate Tribunal on the appeal filed by the respondent is as under: "Having considered the facts and circumstances of the case as well as the argument of the respective representatives of the parties. We find that the Income‑tax Officer has not held in his impugned order that some of the sales were not properly vouched and hence the entry in the order sheet will have no adverse effect on the fate of this appeal. We are also satisfied that the assessee was in a position to give satisfactory explanation with regard to the fall of 0.4 % gross profit rate in this year. The fall in sales has already been accepted by the Income‑tax Officer. The shortage of kerosine oil is admitted even by the learned appellant's representative as stated above. Keeping therefore, all these facts and circumstances into consideration we are of the opinion that the Income‑tax Officer could at best make an addition of Rs. 7,500 being the price of the said excess shortage of kerosine oil. The ad hoc addition to the extent of Rs. 20,000 as made by the Income‑tax Officer, in the circumstances of this case, is excessive. It shall now stand reduced to Rs. 7,

500. Consequently the appeal success to the extent indicated above." The application moved by the applicant for making a reference to the High Court was disposed of holding that there is apparently no question of law involved in the matter which need to be referred to the High Court. Learned counsel for the applicant has stated that the Income‑tax Appellate Tribunal should have referred the matter to this Court. To appreciate the contention of the learned counsel it is necessary to refer to section 66 of the Income‑tax Act. Under section 66 (I) the Appellate tribunal may refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall draw up a statement of the case and refer it to the High Court. The Appellate Tribunal has not exercised the jurisdiction under section 66 (1), therefore the applicant has moved this Court under section 66(2) of .the Act which provides that if the Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be may apply to the High Court and the High Court may if it is not satisfied with the correctness of the decision of the Appellate Tribunal frame a question of law and proceed to hear the case. The Appellate Tribunal is the final Court of fact. Reasons have been advanced by the Appellate Tribunal in support of the order passed by it and reproduced before. There is no evidence to the contrary to contradict the finding of fact arrived at by the Appellate Tribunal. the case has been consi?dered by the Appellate Tribunal but there is nothing to suggest that the finding's is not based on any evidence or it is contrary to law. The applicant has failed to make out a case for decision by this Court. No question of law is involved in this matter, therefore, the finding of the Appellate Tribunal is not 'open to exception. The applicant has failed to show that any question of law has arisen in this case. The application is, therefore, dismissed. M. B. A.????????? ?????????????????????????????????????????????????????????? Application dismissed.