M.H. Beg, J. - (1.) THIS is an application by the Commissioner of Income-tax, U.P., for grant of a certificate, under Section 66A(2) of the Indian Income-tax Act (hereinafter referred to as "the Act"), of fitness of the case for an appeal to the Supreme Court. The question raised in the reference out of which this application arises was framed as follows : "Whether, on a true interpretation of Section 4, Sub-section (3)(viii) of the Income-tax Act, the sum of Rs. 20,000 received by the assessee as remuneration was revenue income liable to tax under the Indian Income-tax Act?"
(2.) THE answer of a Bench of which one of us (i.e., Beg J.) was a member, is in Malick v. Commissioner of Income-tax, 1968 67 ITR 616. It is true that, in order to give our opinions on the particular facts of the case of the assessee, who happened to be a former Chief Justice, this court had to interpret the provisions of Section 4 of the Income-tax Act. THEse provisions are reproduced in Section 10(3) of the Income-tax Act of 1961, with slight alteration in phraseology, which was held by us to be intended only to clarify and not to alter the law. It was contended, on behalf of the department, that, although the assessee, a High Court judge, was permitted by the President of India and had agreed, under exceptional circumstances, to act as an arbitrator, the question of taxability of whose fees paid for arbitration was considered in this case by us, our interpretation of Section 4(3)(viii) of the Income-tax Act, was likely to affect cases of assessees claiming either the benefit of the provision interpreted by us or of Section 10(3) of the Act of 1961 in either and less exceptional or special circumstances. In other words, the submission was that the applicability of the interpretation we had placed upon Section 4(3)(viii) of the Act of 1922 was much wider than one confined to the special facts of the case. Our attention was drawn to the difficulty felt by Manchanda J., due to certain observations in a decision of the Supreme Court in P. Krishna Menon v. Commissioner of Income-tax, [1959] 35 I.T.R. 48 ; [1959] Supp. I S.C.R. 133 (S.C.), in interpreting the word "occupation", and to the fact that I had some difficulty in determining the precise meaning of the word "casual" and its applicability to a case where there was an understanding to pay a certain amount for working as an arbitrator before the work was undertaken. But, each of us (i.e., Manchanda J., and myself) had overcome this difficulty after perusing the tentative opinion of the other. Thus, the case did present us with some difficulties in arriving at the interpretation we finally reached as better than other possible interpretation of Section 4(3)(viii) of the act. We had also dissented from some of the observations of the Madras High Court in Commissioner of Income-tax v. V.P. Rao, 1950 18 ITR 825 and had also distinguished that case on facts. A decision of the Calcutta High Court in Commissioner of Income-tax. v. Kamal Singh Rampuria, 1967 64 ITR 527 was cited on behalf of the department. In this case, after a review of a number of authorities on the question, twelve classes were given (at pages 538 to 539) of the types of cases in which certification under Section 66A(2) of the Act could be said to be proper. The case before us would certainly come under several of those classes, so that, if we were to agree with the views expressed there, this would be a fit case for certification.
(3.) MR. Shanti Bhushan, appearing for the opposite party, however, not only vehemently urged that the kind of question we had decided, on the very special and peculiar facts of this case, could not be expected to arise again, but relied on a Division Bench decision of this court in Mishrimal Gulab Chand v. Commissioner of Income-tax, [1951] 20 I.T.R. 91, 93 (All.), where it was held that the tests of fitness for certification of a case under Section 66A(2) of the Act are the same as those under Section 109(c) of the Civil Procedure Code. Reliance was placed there on the pronouncements of the Privy Council on cases falling under Section 109(c) of the Civil Procedure Code to hold that the case must raise questions of wide public importance. He pointed out that we had based our opinions on the ratio decidendi of a Full Bench decision of this very court in In re Lala Indra Sen, (1940] 8 I.T.R. 187 (All.), where question whether a vocation or an occupation of an assessee existed, which could be said to have yielded an income, was declared to be a question of fact for a determination of which no single decisive or conclusive test could be laid down. He submitted that, as our opinions were specifically confined to the special and peculiar facts of the case before us, and these could not be expected to recur in the case of any assessee in future, no question deserving a certificate of fitness of the case for an appeal to the Supreme Court arose. In reply, it was contended for the department that the illustrations given, in a passage cited in Mishrimal Gulab Chand's case, of questions of wide public importance, such as, "those relating to religious rites and ceremonies, to caste and family rights, or such matters as the reduction of the capital of companies as well as questions of wide public importance in which the subject-matter in dispute cannot be reduced into actual terms of money", were of a type which was not likely to arise at all under the Indian Income-tax Act. Hence, it was suggested that the test of fitness of a case for certification under Section 66A(2) of the Act is bound to be different from that under Section 109(c) of the Civil Procedure Code. It was also said that a question affecting the revenues of the State would be, for that reason alone, one of public importance.;