POLISETTI NARAYANA RAO Vs. COMMISSIONER OF INCOME TAX
LAWS(APH)-1955-9-4
HIGH COURT OF ANDHRA PRADESH
Decided on September 02,1955

POLISETTI NARAYANA RAO Appellant
VERSUS
COMMISSIONER OF INCOME TAX Respondents


Referred Judgements :-

NEELAVENI VS. NARAYANA REDDI [REFERRED TO]
MOTI LAL VS. THE STATE ILR [REFERRED TO]
STATE OF ORISSA VS. MADAN GOPAL RUNGLA [REFERRED TO]
ELECTION COMMISSION INDIA VS. UNION OF INDIA [REFERRED TO]
WARYAM SINGH VS. AMARNATH [REFERRED TO]
MANICKAM CHETTIAR VS. INCOME TAX OFFICER [REFERRED TO]
BEERAM ANKALU REDDI VS. BEERAM CHINNA ANKALU REDDI [REFERRED TO]
HUKUM CHAND BOID VS. KAMALANAND SINGH [REFERRED TO]
DALMIA JAIN AIRWAYS LTD. VS. SUKUMAR MUKHERJEE [REFERRED TO]
GNANAPRAKASAM FERNANDA VS. M S RATNASAMI NADAR [REFERRED TO]



Cited Judgements :-

SRIDHAR DECD VS. COMMISSIONER OF WEALTH TAX [LAWS(ALL)-1985-3-56] [REFERRED TO]
BHARAT LITHO PRESS VS. STATE OF ANDHRA PRADESH [LAWS(APH)-1987-4-39] [REFERRED TO]
INCOME TAX OFFICER VS. MOHAMMED KUNHI [LAWS(SC)-1968-9-34] [REFERRED TO]
COMMISSIONER OF INCOME TAX DELHI COMMISSIONER OF INCOME TAX BIHAR PATNA VS. BANSI DHAR AND SONS:CHATHURAM BHADANI [LAWS(SC)-1985-12-10] [OVERRULED]
DWARKA PRASAD BAJAJ VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1979-5-3] [REFERRED TO]


JUDGEMENT

- (1.)THIS is a petition to direct the stay of the collection of income tax arrears pending the disposal of a reference under S. 66(2) of the IT Act. The petitioner was assessed as a Hindu joint family. It consists of two branches, one branch represented by Polisetti Narayana Rao and the other by his brother Govinda Rao. Narayana Rao was the kartha of the family and in that capacity submitted returns for the asst. years 1946 47, and 1947 48 on 7th Nov., 1946, and 15th Sept., 1947, respectively. In the assessment proceedings, the assessee claimed that there was a partial partition in the family and that certain specific items, viz., house properties, cloth and yarn business and Sudarsana Oil Mill business were divided between the two branches. The ITO negatived the claim of division, but on appeal to the AAC it was upheld. On further appeal by the Department, it was held by the Tribunal that there was division as regards some of these properties and that there was none as regards certain others. The assessee thereupon applied to the Tribunal to state a case and refer to the High Court a question formulated by him. There were two appeals before the Tribunal, I. T. A. Nos. 5831 and 5832, arising out of two assessments for the above mentioned assessment years. The Tribunal declined to do so and the matter was brought before us by the assessee under S. 66(2) of the IT Act. This Court directed the Tribunal to state a case and submit for the opinion of this Court a question of law arising out of their decision. That order of this Court was passed on C. M. P. Nos. 4391 and 4392 of 1954. The present petition is filed as an interlocutory application in C. M. P. No. 4392 of 1954, which was the main petition and seeks stay, as above stated, of the collection of the arrears "pending disposal of the case directed to be referred by C. M. P. No. 4392 of 1954." Now, it is to be noticed that C. M. P. No. 4392 of 1954 is the application referred to in cl. (2) of S. 66 of the Act and that has already been ordered by this Court, requiring the Tribunal to state the case and to refer a question. In due course, a reference will be made by the Tribunal upon the requisition so issued and the case when it is so stated and referred will be taken on the file of this Court as a "referred case". The C. M. P. as such has been ordered and the referred case as such is yet to be on the file of this Court. How far it can be said that there are, in these circumstances, any proceedings pending on the file of this Court is a matter which has however, not been argued before us and we are not to be supposed as expressing any opinion on it.
(2.)THE learned Advocate General for the CIT, Hyderabad, questioned the jurisdiction of this Court to issue any such order as is sought by the assessee. He referred to cl. (7) of S. 66 which runs as follows :
"Notwithstanding that a reference has been made under this section to the High Court, income tax shall be payable in accordance with the assessment made in the case : Provided that, if the amount of an assessment is reduced as a result of such reference, the amount overpaid shall be refunded with such interest as the CIT may allow (unless the High Court, on intimation given by the CIT within thirty days of the receipt of the result of such reference that he intends to ask for leave to appeal to his Majesty in Council makes an order authorising the CIT to postpone payment of such refund until the disposal of the appeal to his Majesty in Council)."

He argues that the power of this Court under S. 66(2) is merely consultative and advisory, that this Court has no power to pass a decree or order under the IT Act, that the above non obstante clause debars the passing of any order directing a stay, and that the only power that the High Court has to direct stay with respect to any matter concerning the tax is what is contained in the above proviso whereby the High Court is entitled to make an order postponing payment of any refund payable by the CIT. This argument is countered by the learned counsel appearing for the petitioner by invoking our jurisdiction under S. 151 of the CPC and Art. 227 of the Constitution of India. The learned counsel points out that the proviso to Art. 225 of the Constitution of India removes the limitations previously in force upon the power of the High Court because of S. 226(1) of the Government of India Act, 1935 (corresponding to S. 106 of the earlier Act of 1919).

(3.)NOW it is true that the proviso to Art. 225 removes the bar upon the exercise of
"original jurisdiction by any of the High Courts with respect to any matter concerning the Revenue or concerning any act ordered or done in the collection thereof", but it is obviously not an article conferring jurisdiction. All that this proviso does is to take away the restrictions which were imposed by S. 226. So long as that section was in force, the High Court could not have acted under s. 151 of the CPC to stay the collection of income tax pending a reference, there being little doubt that the High Court would be exercising original jurisdiction in answering a reference. The question, therefore, now is whether the inherent power vested in the High Court under S. 151 is wide enough to apply to a case like the present. Reference has been made by learned counsel to the decision in Hukum Chand Boid vs. Kamalanand Singh (1906) ILR 33 Cal 927, where Woodroffe, J., observed as follows :

"The Court has, therefore, in many cases, where the circumstances require it, acted upon the assumption of the possession of an inherent power to act ex debito justitiae and to do that real and substantial justice for the administration, for which it alone exists."

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