P L D 1954 Lahore 32 (PLP)

KAYANI, J.‑This is a petition by the Commissioner of Income Tax for leave to appeal to the Federal Court, arising in the following circumstances. The respondent firm had applied for a renewal of registration under section 26‑A of the Income Tax Act and the Income‑tax Officer having refused registra tion, the respondent successfully appealed to the Assistant Commissioner. The Income‑tax Officer thereupon preferred an appeal to the Income‑tax Appellate Tribunal. This appeal although time‑barred was admitted by the Tribunal under sub section (2) (a) of section 33 and accepted. The respondent assessee then applied to the Tribunal to refer the following two questions to the High Court :‑

1. Whether the so‑called facts and circumstances found by the Appellate Tribunal are such as to constitute sufficient cause for admitting a time‑barred appeal ?

2. Whether the Income‑tax Officer was justified in exer cising discretion and arbitrarily cancelling registration under section 26‑A without judicial consideration ? The Tribunal being of the opinion that the first was a question of fact refused to refer it, but referred the second question. We, however, required it 'to state the case on this point also, and when it was referred to us, we held that the delay in filing the appeals after a certain date had not been explained and that in these circumstances the appeals should not have been admitted. It is from this order that the Com missioner of Income‑tax intends to appeal to the Federal Court. The circumstances leading to delay in the filing of the appeals before the Tribunal are these. A copy of the Assistant Commissioner's order was served on the Commissioner on the 14th of July 1947, The appeal would have been in time if it had been instituted on or before the 13th of September 1947. Actually it was received in the office of the Registrar of the Tribunal on the 25th of November 1947. The personnel of the Tribunal for Pakistan was announced by notification dated the 18th of November 1947, and was stated to have effect from the 15th of August 1947. A press‑note in December an nounced the location of the headquarters of the Tribunal at Lahore. At an earlier date, however, when exactly is not clear from the statement of the case‑the Commissioner had asked for instruction from the Central Board of Revenue, Karachi, in the matter of filing these appeals and had received a reply on the 2nd of September 1947, that such appeals should be kept ready and filed after the Tribunal for Pakistan had been constituted. The appeals in question had accordingly been prepared signed and verified by the Income‑tax Officer on the 8th of September 1947, and filed on the 25th of November 1947, that is to say, seven days after the notifica tion. The Tribunal, in these circumstances, "apart from the question whether limitation would be deemed in law to have started running when in fact there was no Tribunal in existence," felt satisfied that there was sufficient cause for con doning delay and admitted the appeals. When we called upon the Tribunal to state the case, it was disclosed that an Assistant Registrar had taken charge of the office of the Tribunal with effect from the 16th of October 1947, and that between the 30th of October and the 25th of November 1947, sixteen appeals and three reference applications had been filed before the Tribunal at the instance of private assessees. In these circumstances we held that the instructions which the Board of Revenue gave to the Commissioner in this behalf, not being different from instructions given by an employer to an employee that the latter was not to file an appeal until a certain date, if they misled the Commissioner, could not be allowed to affect the rights of private parties, that the Tribunal itself existed since the 14th of August 1947, and that it was not a sufficient explanation of the delay that the Commis sioner was asked by his superiors not to institute the appeal until the personnel of the Tribunal had been formally appointed. The petition for leave to appeal purports to be "under section 66‑A (2) and (3) of the Income‑tax Act, sections 109 and 110 of Civil P. C., under sections 3 and 6 of the Federal Court (Enlargement of Jurisdiction) Act, 1949, and under sections 2 and 3 of the Privy Council (Abolition of Jurisdic tion) Act, 1950." The last two Acts are relevant only in so far as they replace the Privy Council by the Federal Court. The prayer at the end of the petition is that under section 66‑A (2) and (3) of the Income‑tax Act and sections 109 and 110 of the Code of Civil Procedure "the present case may be certified to be a fit one for appeal to the Federal Court of Pakistan." Section 66‑A of the Income‑tax Act, so far as it is relevant to our purpose, is as follows :‑ "(2) An appeal shall lie to the Federal Court from any judgment of the High Court delivered on a reference made under section 66 in any case which the High Court certifies to be a fit one for appeal to the Federal Court. (3) The provisions of the Code of Civil Procedure 1908, relating to the appeals to the Federal Court shall, so far as may be, apply in the case of appeals under this section in like manner as they apply in the case of appeals from decrees of a High Court." It is contended for the respondent that an appeal lies to the Federal Court only under the provisions of the Income‑tax Act, which requires the High Court to certify the case to be a fit one for such appeal and that on facts this is not a fit case for appeal. On the other hand, learned counsel for the peti tioner contends that subsection (3) of section 66‑A attracts other provisions of the Code of Civil Procedure a1sc and, further, that since the subject matter of the case exceeds Rs. 10,000 an appeal also lies under clause 29 of the Letters Patent. It is admitted by the respondent's counsel that the value exceeds ten thousand rupees. The decision in Delhi Cloth and General Mills Co., Ltd. v. The Income‑tax Commissioner, Delhi (I L R 9 Lah. 284 (P C).) is an effective answer to the questions raised by the petitioner's counsel. That case related to two references made to the High Court and when those references were decided against the assessees they applied for leave to appeal to the, Privy Council which was refused on the ground that these were not fit cases for appeal. One of the references related to the recovery of additional income‑tax by way of adjustment under section 19 of the Act and the assessee contended that adjustment was barred by section

34. In the other reference the contention was that a certain sum should have been assessed for the year in which it was received and that its assessment was barred under sections 34 and

35. In each case the sum in dispute exceeded ten thousand rupees. In each case, again, the High Court, in refusing to grant leave to appeal, had affirmed the opinion of the Commissioner. The assessees thereupon applied to the Privy Council for special leave and it was contended for them that their right of appeal was in no way conditional on compliance with the requirements of section 109 (c), C. P. C only. Referring to subsections (2) and (3) of section 66‑A of the Income‑tax Act; their Lordships observed :‑ "It is upon these subsections that the question now under discussion depends, and as to them it will be noticed that the appeal thereby given is by subsection 2 confined to a case which the High Court certifies to be a fit one for appeal to His Majesty in Council, These words are textually the same as the concluding words of subsection (c) of section 109 of the Code of Civil Procedure, and, coupled with the carefully limited referential words to the Code of Civil Procedure in subsection (3), suffice, in their Lordships' judgment, to exclude from any right of appeal cases which fall within the requirements of section 110 of the Code and are operative to confine that right to cases which are cer tified to be' otherwise fit for appeal to His Majesty in Council.‑The words of qualification "so far as may be" in subsection (3) are, in their Lordships' judgment, apt to con fine the statutory right of appeal to the cases described in subsection (2)." It will be noticed that reliance was not placed before their Lordships on clause 29 of the Letters Patent. It may have been assumed by implication that their Lordships regarded the provisions of section 66‑A of the Income‑tax Act (which came into force in 1926) as excluding clause 29 or any other provi sion of law, but that assumption is unnecessary because their Lordships have expressly stated that "the appeal thereby given is by subsection (2) confined to a case which the High Court certifies to be a fit one for appeal to His Majesty in Council." It may be noticed here that by clause 37 of the Letters Patent the provisions of the Letters Patent are subject to the legisla tive powers of "the Governor‑General in Legislative Council," as the legislative body was then called, under the Government of India Act of 1915. Then as to clause 29 itself, it is provided therein that any person may appeal to the Privy Council "from any final judg ment decree or order of the High Court of judicature at Lahore, made on appeal and from any final judgment or order made in the exercise of original jurisdiction by judges of the said High Court from which an appeal does not lie to the said High Court under clause 10, provided that the sum of matter at issue is of the amount or value of not less than ten thousand rupees," etc. It is claimed that the decision of the High Court on reference is a final order made in the exercise of original jurisdiction, and reliance is placed for this claim on a Full Bench decision in Feroze Shah v. Commissioner of Income‑tax (I L R 12 Lah. 166.) , The Full Bench held, following Tata Iron and Steel Company Limited v. Chief Revenue Authority of Bombay (I L R 47 Bom. 724 (P C).) that in clause 29 of the Letters Patent the words "original jurisdiction" are only used in contra‑distinction to the words made in appeal" mentioned earlier in the clause and that con sequently a reference under the Income‑tax Act was decided in the exercise of original jurisdiction. It was further held that an order refusing to direct the Commissioner of Income -tax to state a case was a final judgment. We do not understand how the decision of the Privy Council in Delhi Cloth and General Mills Co. v. Income‑tax Commissioner, Delhi (I L R 9 Lah. 284 (P C).), was overlooked in this case, but if any reasonable ground can be discovered for overlooking it, it can be four," only in the language of subsection (2) of section 66‑A, according to which "an appeal shall lie to His Majesty in Council from any judgment of the High Court delivered on a reference, made under section 66," that is to say, so far as an appeal under section 66‑A is concerned, it 'can lie only from a judgment delivered on a reference, and as in the case before the Full Bench the High Court had refused to require the Commissioner to make a reference, there being no reference and consequently no judgment, the case did, not fall under subsection (2) of section 66‑A. That would mean that orders made by the High Court other than those made on a reference would be appealable if they fall under the provisions of the Code of Civil Procedure or the Letters Patent. If that view can be found acceptable, then the Full Bench case is distinguishable from the present case because here we have given a decision on a reference. We should point out, however, that in the Tata Iron and Steel Company Limited v. Chief Revenue Authority of Bombay (I L R 47 Bom. 724 (P C).) upon which the Full Bench relied for a part of its judg ment, it was also held that a decision of the High Court on reference is not a final judgment or a final decree or a final order, that the decision or judgment is merely advisory and that no appeal under the Letters Patent is competent. As however, this view was based on the language of section 51 of the old Act which is different in material details from sec tion 66 of the new Act, we say nothing as to whether the reasoning of their Lordships would be applicable to section 66 of the present Act also. We may again point out, all the same, that in Gurmukh Rai v. Secretary of State for India in Council (1934 I T R 412 (F B).), a Full Bench of the Allahabad High Court relied on the observations of the Privy Council in the Tata Iron and Steel Company's case (I L R 47 Bom. 724 (P C).) to the effect that the decision of the High Court upon a reference being made to it under section 51 was merely advisory and therefore, not a final judgment. In view of the other reasons that we have given, we hold that an appeal lies only under section 66‑A and that it consequently lies where we certify the case to be a fit one for appeal to the Federal Court, but not otherwise. We do not think this is a fit case for appeal. We have held that because the Appellate Tribunal for Pakistan was constituted since the 14th of August 1947, and an Assistant Registrar had taken over charge of the office of the Tribunal on the 16th October 1947, the delay in lodging the appeals on the 25th November was not excusable, and that the Tribunal, in overlooking the fact that the delay of every single day had to be explained had not exercised its discretion judicially., The correctness of the principle on which we have acted is not questioned. For the rest, it is not a matter of any general importance nor is it likely to arise in future. We therefore, refuse to give a certificate and dismiss these petitions with costs. K. M. A. Petitions dismissed.