V.G.OAK, C.J. - (1.) THE Income-tax Appellate Tribunal, Allahabad Bench, has referred the following two questions of law to this court. (1) Whether, on the facts and circumstances of the case, and having regard to the deed executed by the assessee on August 13, 1936, the whole of the income from the business styled as Radha Vilas Karyalaya is the income of the assessee and assessable in its hands or that half of the income belongs to a separate trusts styled as Sri Ram-Lakshman-Janki ? (2) Whether the order passed by the Tribunal dated July 8, 1958, under the signature of four of its members is valid in law ?
(2.) THIS reference governs six assessment years, viz., 1951-52, 1952-53, 1953-54, 1954-55, 1955-56 and 19956-57. For the first five assessment years, Sita Ram, deceased, was assessed as an individual. He died on April 1, 1955. An association of persons under the style of M/s. Radha Vilas Karyalaya was assessed for the 6th assessment year 1956-57. For the same assessment year 1956-57, Sita Ram, deceased,, was also assessed for a part of the accounting period. For each of these assessment year the question arose whether the assessee was liable for the whole of the income fro a certain business styled as Radha Vilas Karyalaya. The assessee took the position that half of the income belongs to a separate rust styled as Sri Ram-Lakshuman-Janki. THIS contention raised by the assessee was overruled by the Income-tax Officer. The assessee was assessed for the whole of the income from the business styled as Radha Vilas Karyalaya. THIS view of the Income-tax Officer was upheld in appeal and in further appeal by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal, respectively. Radha Vilas Karyalaya applied for reference to court on a number of question. The Tribunal was satisfied that two questions of law did arise out of its appellate decision dated July 8, 1958, The Tribunal accordingly referred to this court the two questions of law quoted above. We find it convenient to take up question No. 2 first. Annexure G to the statement of the case is a copy of the judgment of the Income-tax Appellate Tribunal of the case is a copy of the Judgment has been signed by four Members. Sri P. C. Mehrotra was the President and Accountant Member; while Sri S. C. Manchanda, Sri Vidya Sankaran and Sri Sriramulu were Judicial Members. The Applicants contention is that four Members could not constitute a Bench of the Appellate Tribunal. The answer of the department is that, in the first place, the appeal was actually decided by three Members, and not by four Members. In the alternative, it is suggested that the irregularity does not render the judgment of the Tribunal invalid. The Tribunal in the statement of the case has described the circumstances under which the appeal before the Tribunal was disposed of in July, 1958 : The Bench before which this case came up for hearing consisted of the President (Accountant Member) and Sri Manchanda (Judicial Member). When it came to the Knowledge of the President that this case had been previously death with by another Bench, he constituted a special Bench. At that time a new Judicial Member (Sri Sriramulu), had joined the Tribunal and was allowed to sit on the Bench with a view to gain experience. It is regretted that the President lost sight of the fact that he should not have been a party to the order. The main order is by the President and all the other members have signed that order. No one has differed with the view taken by the President.
(3.) AS already mentioned, the judgment of the Tribunal is signed by four members. Sri Mehrotra, President, signed it on July 6, 1958. The three Judicial Members including the new member, Sri Srirmaulu, signed the judgment on July 8, 1958. It is thus clear that all the four members including Sri Sriramulu participated in the disposal of the appeals before the Tribunal. Dr. Misra, appearing for the department, raised a preliminary objection that question No. 2 referred to this court by the Tribunal does not arise under section 66 of the Indian Income-tax Act, 192 (hereinafter referred to as the Act). Sub-section 66 of the Act states : Within sixty days of the date upon which he is served with notice of an order............. the assessee.......... may, by application in prescribed form............. require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall............ draw up a statement of the case and refer it to the High Court.............. Under sub-section (1) of section 66 of the Act, the Tribunal has to refer to the High Court any question of law arising out of such order. Now, if the applicants contention is correct, it would mean that the judgment of the Tribunal was invalid due to the defect in the constitution of the Bench. This circumstances alone would vitiate the judgment of the Tribunal. We overruled the preliminary objection raised by Dr. Misra, and hold that question No. 2 referred to this court does arise out of the judgment of the Tribunal dated July 8, 1958. ;