Chakravartti, C.J. - (1.) This reference relates to a re-assessment under Section 34, Indian Income-tax Act and comprises two points taken by the assessee, one of which seeks to make out that the entire re-assessment proceedings were without jurisdiction and the other of which seeks to make out that, in any event, the income brought to tax under the re-assessment was not taxable. The contention in the first case is that the Income-tax Officer had no "definite information" on which he could legally proceed under Section 34. In the second case, it is that the income concerned, is agricultural income.
(2.) Before dealing with the reference on the merits, it is necessary to dispose of a preliminary point. Section 66(1), Income-tax Act provides that the Commissioner or the assessee may, by an application made within a certain time, require the Appellate Tribunal to refer to the High Court any question of law arising out of its order and further provides that "the Appellate Tribunal shall, within ninety days of the receipt of such application, draw up a statement of the case and refer it to the High Court." In the present case the reference was not made within ninety days from the receipt of the application. As this was happening in too many cases, it appeared to this Court that the statutory direction contained in Section 66(1) of the Act was being disregarded by the Tribunal and, accordingly, it was directed by an administrative order that references made after the expiry of the period prescribed by the Act, should be accepted only provisionaliy, subject to all just exceptions thab might be taken at the hearing on the ground of limitation. The order was directed to be incorporated in the Paper-Book of every case in which the question was involved so that the matter might be judicially examined. The present case is the first in which the matter has come up for consideration and we have heard the learned counsel for the Commissioner of Income-tax and the assessee. Both contended that the provision contained in Section 66(1) as to the time within which the reference was to be made was not mandatory, but only directory and, therefore, although a reference might be made after the expiry of the period prescribed, the validity of the reference would not thereby be affected. We are of opinion that that contention is correct. The act which the statute enjoins to be done within a particular period is an act to be done by the Tribunal and it is a settled principle of construction that when the effect of construing such provisions as mandatory would be to affect the rights of individuals, they ought not to be so construed: -- 'Canadian Pacific Rail. Co. v. Parke', (1899) AC 535 (A). The principle was stated by the Privy Council more elaborately in --'Montreal Street Railway Co. v. Normandin', AIR 1917 PC 142 (B), which is the leading case on the subject. As stated there, the principle is that where the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of that duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, such provisions should be construed as being directory only and not imperative. It is true that the act which the Privy Council was considering was an act of a different kind, but it appears to us that the principle laid down is none the less applicable here, because the object of the Legislature is to provide that questions of law arising out of the order of the Tribunal shall be further considered by the High Court, if either of the parties so desires and it is in furtherance of that object that a duty has been laid on the Tribunal to place such questions before the High Court. The Tribunal is a judicial body and over its actings, the parties have no control. In those circumstances, to construe the time-limit for the submission of the case as mandatory might in a case be to deprive a party of his right to have a question of law considered by the High Court which the Act intends to be so considered and in view of that possibility, the provision should be construed as only directory so that a party may not be deprived of a statutory right for no fault of his own, but for the fault of a public body over which he has no control. Apart from the true construction of Section 66(1), it is also settled law that a party cannot be made to suffer prejudice by any default or negligence on the part of the Court. It appears to us further that no question of limitation affecting the rights of the parties can really arise in circumstances like the present, because the basis of all rules of limitation is that a party, being required or being at liberty to do a certain thing within a certain time, fails to do it within the time limited, whereas, in the present case, the default or negligence is of a third party. We accordingly hold that Section 66(1), in so far as it provides that a reference shall be made by the Tribunal within ninety days from the date of the application, is only directory and we hold further that for that reason as also the other reasons we have given, the present reference is valid, although made after the expiry of ninety days.
(3.) We desire to add, however, that although the validity of a reference may not be affected by the expiry of the period prescribed by Section 66(1), it is not proper for the Tribunal to disregard that provision. The Act, although it may not command the Tribunal to make a reference within ninety days, at least directs it to do so. Proper respect to that direction should be shown. I am not unmindful of the fact that the Tribunal, having to deal with applications from all the States in India, must have its own difficulties in coping with them, but still it ought not to make it a habit to make belated references. Fortunately, the time-limit has been or is going to be extended by an Amending Act and we hope that hereafter we shall not come across any, or at least many, references made after the expiry of the prescribed period.;