Ramaprasada Rao, J. -
(1.) THIS tax case is set before us on a remand of the case made by the Supreme Court in its order in Civil Appeal No. 1984 of 1966. We shall extract the relevant portions of the judgment of the Supreme Court in order to appreciate the scope of the order of remand. We shall be, therefore, quoting in extenso the necessary excerpts from the judgment which touches both questions of fact as well as law.
(2.) THE assessment year involved in this appeal is 1948-49, the corresponding previous year being the financial year 1947-48, For the accounting period from November 13, 1947, to November 1, 1948, which was the corresponding previous year for the assessment, year 1949-50, there was shown a credit of Rs. 25,000 in the capital account of the appellant. On November 13, 1947, this amount was credited in the books of the appellant. On October 30, 1948, this amount was transferred to the account of one Amrithlal Ranchoodas, the father-in-law of the appellant. THE Income-tax Officer included the said amount as income of the appellant from undisclosed sources in the assessment for the assessment year 1949-50, On appeal to the Appellate Assistant Commissioner, the appellant contended that the amount could not be included in the assessment year 1949-50 because the credit appeared prior to March 31, 1948.
The Appellate Assistant Commissioner allowed the appeal holding that the credit came into the books of the appellant on November 13, 1947, i.e., in the financial year 1947-48, which is the previous year for the assessment year 1948-49. On this finding, the Appellate Assistant Commissioner deleted the addition of Rs. 25,000 from the assessment of the appellant for the year 1949-50. In doing so, the Appellate Assistant Commissioner followed the decision in Commissioner of Income tax v. P. Darolia & Sons, 1956 27 ITR 515. Consequently, on November 3, 1953, the Income-tax Officer issued a notice under Section 34(1)(a) of the Income-tax Act, 1922 (hereinafter referred to as "the Act"), to the appellant for the assessment year 1948-49. By his order dated April 20, 1959, he rejected the contention of the appellant that the assessment was barred by limitation and assessed the sum of Rs. 25,000 as income from other sources. The appellant took the matter in appeal to the Appellate Assistant Commissioner who, by his order dated February 23, 1960, allowed the appeal. He took the view that there was no finding in the order of the Appellate Assistant Commissioner that the credit represented the income of the appellant or that the same credit should be assessed in the assessment year 1948-49. He further held that the notice under Section 34 issued on November 3, 1958, was bad in law and was not saved by the second proviso to Section 34(3) of the Act, The Commissioner of Income-tax preferred an appeal against the order of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal which allowed the appeal, holding that "the order of the Appellate Assistant Commissioner in the appeal against the assessment for 1949-50 should be taken to contain a finding that the sum of Rs. 25,000 represented income of the assessee to be considered in the assessment year 1948-49". At the instance of the appellant the Appellate Tribunal referred the following questions of law for the opinion of the High Court under Section 66(1) of the Act:
"(1) Whether, on the facts and in the circumstances of the case, the proceedings initiated against the assessee for the assessment year 1948-49 under Section 34 and the assessment for the said year are barred by limitation and hence not lawful ?
(2) Whether the proceedings initiated against the assessee for the assessment year 1948-4 under Section 34 and the assessment made under Section 34 for the assessment year 1948-49 could be justified in law as for the purpose of giving effect to a finding or direction In the order of the Appellate Assistant Commissioner in I.T.A. No. 134 of 1958-59?
(3) Whether, on the facts and in the circumstances of the case, the assessment made is saved from the bar of limitation under the second proviso to Section 34(3) ?"
By its judgment dated January 2, 1964, the High Court answered the questions in favour of the respondent and against the appellant.
The Supreme Court was of the opinion that the view taken by the High Court is not correct in law and must be overruled. Certain contentions were raised before the Supreme Court by Mr. Veda Vyasa, counsel for the respondent. Referring to the said contentions, the Supreme Court said:
"Mr. Veda Vyasa referred to the decision of the Bombay High Court in Onkarmal Meghraj v. Commissioner of Income-tax, 1960 38 I.TR. 369 in which it was held that there was nothing in Section 2 or 4 of the Amendment Act of 1959 to restrict the terms of the words 'at any time' occurring in Section 4 of that Act as meaning 'at any time after April 1, 1956', viz., the date on which the amendments made by the Finance Act, 1956, came into force and there was nothing in the provisions of the Amendment Act of 1959 which limited the retrospective operation of Section 4. It was also held that since the enactment of the Amendment Act of 1959, a notice issued after April 1, 1956, for reopening an assessment, by virtue of Section 4, could not be permitted to be called in question on the ground that the notice was not issued within the period prescribed by the unamended Section 34(1)(a). On behalf of the respondent reference was also made to the decision of this court in S.C. Prashar v. Vasantsen Dwarkadas, in which it was held that Section 4 of the Amendment Act, 1959, operated on and validated notices issued under Section 34(1)(a) as amended in 1948, even earlier than April 1, 1956, in other words, in respect of assessment years prior to March 31, 1956, and, therefore, notices issued under Section 34(1)(a) of the Income-tax Act, before April 1, 1956, could not be challenged on the ground that they were issued beyond the time limit of eight years from the respective assessment years prescribed by the 1948 amendment. On behalf of the appellant Mr. Swaminathan raised the objection that the point was not taken up by the respondent in the High Court, nor was there any reference to it in the statement of the case filed by the respondent. It was also contended that the point raised was outside the scope of the questions of law referred by the Appellate Tribunal to the High Court. We do not think there is any substance in the objection raised on behalf of the appellant. One of the questions referred to the High Court is 'whether, on the facts and in the circumstances of the case, the assessment made is saved from the bar of limitation under the second proviso to Section 34(3) ?'. It is true that the impact of the Amending Act, 1959 (1 of 1959), was not raised before the Appellate Tribunal or before the High Court but it is not a separate question by itself and is only an aspect of the question of limitation which has already been referred by the Appellate Tribunal to the High Court. As pointed out in Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd.,  42 I.T.R. 589 ;  2 S.C.R. 783 (S.C.) the question of law referred to the High Court under Section 66 may be a simple one having its impact on one point, or it might be a complex one, involving more than one aspect and requiring to be tackled from different standpoints. All that Section 66(1) requires is that the question of law which is referred to the High Court and which the High Court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal, and it will be an over-refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of Section 66(1) of the Act. In our opinion, the argument of the respondent with regard to the legal effect of the Amending Act of 1959 (1 of 1959) is within the framework of the question already referred to the High Court and it is therefore competent to this court, in a case of this description, to allow a new contention to be advanced.
It is, however, necessary that the case should be remanded to the High Court for examining the question of law referred to it after considering the impact of the Amending Act of 1959 (1 of 1959).
(3.) FOR these reasons we allow this appeal, set aside the judgment of the High Court dated January 2, 1964, and remand the case to it for further hearing and answering the reference in the light of the Income-tax Amending Act, 1 of 1959."
In the light of this, the questions referred to this court as above, under Section 66(1) of the Act, have to be answered.
In order to answer the question, it is necessary to trace to a certain extent the scope of Section 34 of the Act, as also the amendments made thereto from time to time and the impact of the Amending Act of 1959 (1 of 1959).