Khanna, J. - (1.) This appeal by special leave is against the order of Rajasthan High Court whereby the High Court held that it was functus officio to entertain an application for re-hearing the reference made under S. 66 (1) of the Indian I.-T. Act, 1922 (hereinafter referred to as the Act).
(2.) The assessee-appellant is carrying on business in soap stones. At the instance of the appellant, the following two questions were referred to the High Court by the Tribunal under S. 66 (1) of the Act: "1. Whether on the facts and in the circumstances of the case the I.-T. Appellate Tribunal was justified in holding that the property in the goods passed in the customers in erstwhile part A and C States, because the railway receipts in respect of the sale of goods of the vale (sic) of Rs. 94,037/- were made out in the name of 'self and were sent to the purchasess in erstwhile part A and C States, after endorsing the same in their favour 2. Whether on the facts and in the circumstances of the case, the entire profits and gains amounting to Rs. 93,019/- arisen to the assessee firm in part A and part C States should be taken into account for the purpose of applying the test laid down under S. 4A (C) (h) (sic) or only that profit of the profits (sic) which can be determined after the application of S. 42 (3) of the Act as reasonably be attributable to that part of the operations carried on in British India - It appears that a notice was sent by the High Court to the appellant to file paper books within three months of the receipt of the notice. The notice was received by a clerk of the appellant firm on May 9, 1970. According to the affidavit filed on behalf of the appellant, the aforesaid clerk misplaced that notice. The necessary paper books were consequently not filed in the High Court. The reference came up for hearing on August 26, 1970. On that date, counsel for the department was present. No one appeared on behalf of the appellant, apparently because the notice sent by the High Court had been misplaced. The High Court in a brief order observed that the assessee at whose instance the reference had been made had not put in appearance and had also not filed the paper books in spite of the service of notice. The High Court accordingly declined to answer the reference.
(3.) The affidavit filed on behalf of the appellant shows that the clerk, who had misplaced the notice received from the High Court, while proceeding on leave and handing over the charge to another clerk, discovered on September 21, 1970 that the above mentioned notice had been received from the High Court. Counsel was then engaged on behalf of the assessee-appellant. On enquiry it was found that the matter had been disposed of on August 26, 1970. On September 24, 1970 an application was filed on behalf of the appellant stating that the paper books had not been filed because of bona fide mistake. Prayer was made for permitting the appellant to file the paper books and for re-hearing the reference. The High Court, as per order dated February 22, 1971, dismissed the aforesaid application after observing that it had become functus officio to entertain the application because of its earlier order declining to answer the reference. It is this order which is the subject-matter of the appeal.;