S. K. Das, J. - (1.) These are two appeals by special leave of this Court. One appeal is from the judgment and order of the Income-tax Appellate Tribunal, Bombay Bench 'C' (hereinafter referred to as the Tribunal), dated November 7, 1955, by which the Tribunal held that S. 34 (1) (a) of the Indian Income Tax Act. 1922 was not applicable in the case, as there was no omission or failure on the part of the assessee to make a return of his income under S. 22 for the assessment year 1945-46, or to disclose fully and truly all the material facts necessary for his assessment for that year. The second appeal is from the order of the High Court of Bombay, dated December 14, l956 by which the said High Court rejected an application made by the present appellant under S. 66 (2) of the Income Tax Act. By that order the High Court refused to ask the Tribunal to state a case for its consideration of a question of law which the appellant said arose from the order of the Tribunal, dated November 7, 1955.
(2.) A preliminary objection as to limitation was raised before us on behalf of the respondent with regard to the appeal from the order of the Tribunal. It is not necessary to deal with that preliminary objection, because learned Advocate for the appellant has conceded that the appeal direct from the order of the Tribunal must be dismissed in view of the decision of this Court in Chandi Prasad Chokhani vs. State of Bihar, 1961-43 ITR 498, which laid down that save in exceptional and special circumstances, this Court would not exercise its power under Art. 136 of the Constitution in such a way as to bypass the High Court by entertaining an appeal direct from the order of the Tribunal and thereby ignore the decision given by the High Court. Therefore, the appeal from the order of the Tribunal, dated November 7, 1955 must be dismissed.
(3.) Now, we proceed to consider the appeal from the order of the Bombay High Court, dated December 14, 1956. The short facts are these. The present respondent, who was the assessee in the case, carried on a cloth business at Ahmedabad. Later he opened branches at Karachi and Bombay. He was assessed to Income-tax in the status of a Hindu undivided family. In the account period relevant to the assessment year 1943-44, the assessee opened a branch at Karachi. The total income for that assessment year was determined at Rs. 38,400. For the assessment years 1944-45 and 1945-46 the assessee maintained joint accounts for the whole period of two years. In the assessment year 1945-46 he opened a branch office at Bombay. The original assessment for the aforesaid two years was completed under the provisions of S. 23 (3) of the Income Tax Act on September 13, 1946. In the assessment for the year 1945-46 (Samvat year 2000) the assessee's income was derived from his cloth business carried on at Ahmedabad, Karachi and Bombay and certain other properties. Separate sets of accounts were maintained for the head office as well as for the two branches. The books of accounts were produced and were examined by the Examiner of Accounts who submitted a report to the Income-tax Officer concerned. The total income for the assessment year 1945-46 was determined to be Rs. 15,294. Sometime after the completion of the said assessment, the Income-tax Officer concerned received information that the assessee had purchased a draft of Rs. 1,10,000 from the Exchange Bank of India and Africa Ltd. at Bombay and the draft was deposited on July 17, 1944 in a branch of the said Bank at Ahmedabad for realisation. In consequence and on the basis of this information, the Income-tax Officer initiated a proceeding under S. 34 (1) (a) of the Income Tax Act against the assessee by issuing a notice to the latter on March 24, 1954. It may be here stated that the exact date on which the Income-tax Officer came to know of the purchase of the draft for Rs. 1,10,000 is not known. The Income-tax Officer also issued a notice to the assessee under S. 22 (4) to produce his account books for the Samvat year 2000 and his pass -books of the Exchange Bank of India and Africa Ltd. The assessee gave a certain explanation for not being able to produce either his account books or the pass books of the said Bank. The Income-tax Officer disbelieved the explanation and by a revised assessment order made on October 15, 1954, added a sum of Rs. 1,10,000 as income from an undisclosed source, which had escaped assessment in the original assessment. There was an appeal to the Appellate Assistant Commissioner who confirmed the order of the Income-tax Officer. Then, there was an appeal to the Tribunal. The Tribunal allowed the appeal on the ground that S. 34 (1(a) was not applicable inasmuch as there was no omission or failure on the part of the assessee to make a return of his income under S. 22 for the year 1945-46, or to disclose fully and truly all material facts necessary for his assessment for that year. The Tribunal pointed out that at the time of the Original assessment the assessee had produced his books of account with regard to all the three offices at Ahmedabad, Bombay and Karachi. The assessee also filed the balance-sheets relating to his business at the aforesaid three places. The Tribunal further pointed out that before completing the assessment for the years 1944-45 and 1945-46, the Income-tax Officer had called for all the relevant account books which had been examined by an Examiner of Accounts, an officer subordinate to the Income-tax Officer. This officer submitted a report relating to the account books of the Ahmedabad business and he mentioned therein that the assessee had accounts with the Exchange Bank of India and Africa Ltd. and certain other banks. The Tribunal held that in these circumstances it could not be said that there was any omission or failure on the part of the assessee to make a return of his income under S. 22 or to disclose fully and truly all material facts necessary for his assessment for the year 1945-46. The present appellant then moved the Tribunal under S. 66 (1) of the Income Tax Act and asked the Tribunal to state a case to the High Court of Bombay on the following question of law, which, according to the appellant, arose out of the Tribunal's order: Whether on the facts and in the circumstances of the case, and having particular regard to the fact that the return and the statements accompanying the return furnished by the assessee during the course of the assessment proceedings for 1945-46 did not indicate such a large transaction as Rs. 1,10,000 by a single bank draft, the Income-tax Officer was right in starting proceedings under S. 34 (1) (a) on the receipt of the information about the above transaction, to make a re-assessment for 1945-46 - ;