Commissioner of Income Tax vs Ram Pyare Bhagwati Prasad

R.K. Gulati, J.—This is bunch of twelve applications filed at the instance of the Commissioner, Allahabad u/s 256(2) of the income tax Act, 1961 (''the Act'') relating to the assessment years 1967-68 to 1970-71, and 1972-73 to 1974-75. In all these applications a common question has been proposed which reads as under:

Whether the Tribunal was correct in law on the basis of material on record in presuming that while cancelling the penalty the AAC had intended to rely upon the provisions of section 274(1) and not on section 274(2) of the income tax Act, 1961 when the revenue had challenged the finding of the AAC that the Assessing Officer had violated the provisions of section 274(2) while imposing the penalty and thereby the Tribunal upholding the finding of the AAC?

These applications are directed against a consolidated order passed by the Tribunal. The assessee was subjected to two sets of penalties in the aforesaid years, one u/s 271(1)(a) of the Act, and the other u/s 271(1)(c). The orders imposing penalties were cancelled by the first appellate authority on the ground that the same were imposed in violation of the provisions contained in section 274(2) of the Act. The revenue filed appeals to the Tribunal which sustained the appellate orders but on different grounds. The grounds on which the penalty orders were cancelled by the first appellate authority did not find favour with the Tribunal. It seems that before the Tribunal the levy of penalty orders were assailed on an alternative ground that the same were passed in violation of section 274(1), inasmuch as the assessee, was not given any opportunity of being heard before the penalty orders were made. This contention prevailed with the Tribunal and, therefore, it upheld the cancellation of the penalty order passed by the first appellate authority. The Tribunal also observed that in view of the decision of this Court in Commissioner of Income Tax Vs. Bhudhar Singh and Sons, , the matter could not be remanded for a fresh order where the time prescribed for imposition of penalty had already expired during the pendency of the appeal. In taking the view, the Tribunal also noticed a contrary view taken by the Madhya Pradesh High Court. The applications made by the revenue u/s 256(1) for the years in question were also rejected by the Tribunal saying that it would be academic to make a reference as there was already a decision of this Court on the view which prevailed with it. It is in this background that the present applications have been made.

We have heard the learned counsels for the parties. The learned counsel for the assessee took a preliminary objection that the common question reproduced above is misconceived and it proceeds on the controversy on which the first appellate authority had knocked off the penalty orders which did not find favour with the Tribunal. As regards the grounds on which the relief was granted by the Tribunal, no question to that effect in these applications has been raised nor any such question was formulated in the applications filed u/s 256(1) before the Tribunal.

The learned standing counsel did not contest that the question is misconceived but he urged that this court may reframe the question and issue a mandamus to the Tribunal accordingly directing it to make a reference to this Court. We cannot accept this submission. The scope and ambit of section 256(2) under which these applications have been made is co-extensive with those u/s 256(1). To put it differently only those questions which were sought to be ref erred u/s 256(1) before the Tribunal alone can be canvassed in these proceedings. The power to reframe the question is not unlimited. In the garb of reframing a question, the Court cannot raise a new question which has not been set out in the application. The power to reframe a question may be exercised where a situation demands without raising a new and different question so as to bring out the real issue between the parties. It is settled that the jurisdiction of this Court u/s 256 is advisory on specific points on which it is sought. As no question has been raised on the point on which the Tribunal rested its decision, we cannot direct the Tribunal to make a reference to this Court even though the order of the Tribunal may give rise to such a question. For what has been stated above, all these applications are rejected. There shall be no order as to costs.