POLISETTI NARAYANA RAO Vs. COMMISSIONER OF INCOME TAX

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 :

(3.) NOW it is true that the proviso to Art. 225 removes the bar upon the exercise of