Mathur, Ag. C.J. - (1.) THIS is a reference under Section 66 (J) of the Income-tax Act, 1922, made by the Delhi Bench of the Income-tax Appellate Tribunal. It relates to the assessment year 1957-58. The Delhi Bench of the Income-tax Appellate Tribunal had made a similar reference in respect of the assessment years 1955-56 and 1956-57 which was answered by this Court in Commr. of Income-tax, U. P. v. Ram Laxman Sugai Mills, (1970) 76 ITR 123 (All).
(2.) CONSIDERING that the question of law involved is the same and the reference pertains to the same assessee as in the earlier reference, it is not necessary to give the facts of the case in detail. It can simply be mentioned that the assessee. M/s. Ram Laxman Sugar Mills, Mohiuddinpur, is a firm manufacturing sugar; owning mills at Mohiuddinpur in the district of Meerut, The firm comprises of two groups of partners. On account of certain differences between the partners the Government of India was compelled to take action under Section 3 (4) of the Essential Supplies (Temporary Powers) Act, 1946 (Act No. XXIV of 1946) and appointed Sarvasri Suraj Bhan and Maidhan Gupta at Authorised Controllers to work jointly for the running of the sugar mills. Under another order the remuneration payable to the Authorised Controllers was determined by the Government of India. Subsequently the Government of India constituted a Board of Management for the running of the said sugar mills, consisting of four persons who were some of the partners of the assessee firm. From the facts as reported in (1970) 76 ITR 123 (All) it appears that the appointment of the Board of Management was in supersession of the 'earlier order. During the assessment year 1957-58 a total sum of Rupees 28,422/- was paid to the members of the Board towards remuneration of the Managing Directors, Sri Sheo Prasad and Sri Suraj Bhan, conveyance allowance, driver's salary and for attending meetings of the Board of Management at Delhi. The assessee firm claimed a deduction of this amount, but it was disallowed by the revenue authorities under Section 10 (4) (b) of the Income-tax Act, 1922, as it constituted payments made by the firm to partners, and it Was consequently added to the total income. The appeal preferred by the assessee was dismissed by the Appellate Assistant Commissioner, but the Income-tax Appellate Tribunal took a contrary view and held that the claim could not be disallowed. At the instance of the Commissioner of Income-tax, U. P. the Income-tax Appellate Tribunal has referred to this Court the following question of law for its opinion : "Whether on the facts and in the circumstances of the case the sums aggregating to Rs. 28,422/- claimed as payments as per details vide para. 3 supra, made to partners for performing certain functions under the Essential Supplies (Temporary Powers) Article was not inadmissible under Section 10 (4) (b) of the Income-tax Act, 1922?" The reference came up for hearing before a Division Bench of this Court which expressed the opinion that the decision in (1970) 76 ITR 123 (All) required reconsideration. The matter has now been referred to a Full Bench.
(3.) THE question referred by the Tribunal is not general. It proceeds with the assumption that the partnership continued even during the period an Authorised Controller or the Board of Management was appointed by the Government of India under the Essential Supplies (Temporary Powers) Act, 1946 and the members of the Board of Management were partners of the partnership firm. Tn fact, the assessee appears to have submitted the return as a partnership firm. THE referring order and also the earlier order of the Tribunal shows that no one raised the question that the partnership was in abeyance during the period the management was in the hands of the Authorised Controller or the Board of Management. While entertaining a reference under Section 66 (1) of the Income-tax Act, 1922, the High Court acts as an advisory body and does not have the jurisdiction to consider any new fact not raised before and decided by the Tribunal. See Kusumben D. Mahadevia v. Commr. of Income-tax., Bombay City, 39 ITR 540 = (AIR 1960 SC 907) and Commr. of Income-tax, Delhi and Rajasthan v. Mewar Textile Mills Ltd., 1966 60 ITR 423. This Court must, therefore, regard the assessee firm as a partnership firm and the members of the Board of Management appointed under the Essential Supplies (Temporary Powers) Act, 1946 to be still continuing as partners of the firm.;