JUDGMENT This is a statement of a case submitted by the Income-tax Appellate Tribunal, Allahabad Bench, at the assessees instance, inviting this courts answer to the following question :
"Whether, on the facts and circumstances of this case, the appeal preferred before the Appellate Tribunal challenging the deletion by the Appellate Assistant Commissioner of the sum of Rs. 90,000 from the total computation of the income of the assessee was maintainable ?"
During the assessment proceedings pending before the Income-tax Officer a question arose about the nature of a deposit entry of Rs. 90,000 in favour of one of the partners of the assessee-firm in the accounts of the firm and the Income-tax Officer held that it was income from undisclosed sources and included it in the assessable income of the assessee. The assessee preferred an appeal to the Appellate Assistant Commissioner, who, after obtaining a report from the Income-tax Officer, after further enquiry, held that the amount of Rs. 90,000 was not income from undisclosed sources and excluded it from the assessable income. The Commissioner of Income-tax, U. P., directed the Income-tax Officer to prefer an appeal from the order passed by the Appellated Assistant Commissioner and the Income-tax Officer preferred an appeal to the Tribunal. The appeal came up for hearing before the Tribunal first on December 15, 1955. The Income-tax Officer raised the question about the amount of Rs. 90,000 and another amount and the assessee replied to the contentions advanced by the Income-tax Officer on merits. The assessee did not contend at all that the appeal filed by the Income-tax Officer, even though at the instance of the Commissioner of Income-tax, was incompetent because it was against an order passed by the Appellate Assistant Commissioner on the basis of his own report submitted under the instructions of the Appellate Assistant Commissioner after further enquiry. The Tribunal did not go into the question whether the appeal was competent or not. After hearing the arguments of the Income-tax Officer and the assessee on merits it found itself unable to decide the questions without calling for a further report from the Income-tax Officer. Therefore, on December 15, 1955, it passed an order calling upon the Income-tax Officer to submit to it a report on certain points. While the Income-tax Officer was receiving evidence and considering the points on which his report was called for, the assessee applied to the Tribunal under section 66(1) for reference of certain questions said to be questions of law arising out of its order dated December 15, 1955. That application is not before us and we do not know what questions were sought by the assessee to be referred by the Tribunal to this court; all we know is that the application was made. While this application was pending, the Income-tax Officer submitted his report and the Tribunal took up the appeal for final orders on January 24, 1957. On that date it was contended on behalf of the assessee that the appeal was incompetent for the reasons given above. The Tribunal rejected this contention and held that the Income-tax Officer had jurisdiction to file the appeal at the instance of the Commissioner of Income-tax. It then went into the merits of the appeal and set aside the assessment order and directed the Income-tax Officer to make a fresh assessment. Thereafter, it took up the reference application and allowed it and decided to state the case of this court. Then it submitted the statement.
It is clear that the question of law that has been referred to this court by the Tribunal is a question of law said to arise out of the earlier order dated December 15, 1955. The application made under section 66(1) was for reference of a question arising out of that order because that was the only order passed by the Tribunal that existed when that application was made. The application could not possibly be for a reference of a question of law arising out of the order dated January 24, 1957, for the simple reason that that order did not exist on the date of that application.
We may also mention the fact that when the Income-tax Officer was complying with the Tribunals order dated December 15, 1955, he was informed by the assessee itself that its reference application was pending before the Tribunal and was requested to sat further enquiry. This confirms what is stated in the statement of the case that the reference application was made for referring questions of law arising out of the Tribunals order dated December 15, 1955.
The application made by the assessee was not maintainable and the Tribunal had no jurisdiction to state the case on such an application, because the order dated December 15, 1955, was not an order passed under section 33(4) and the question that has been referred to us did not arise out of it.
An application under section 66(1) can be made only in respect of an order passed under section 33(4) and in respect of no other order of the Tribunal. We have no doubt that the order dated December 15, 1955, is not an order passed under section 33(4). Section 33 deals with appeals against order of the Appellate Assistant Commissioners. Under sub-section (1), an assessee aggrieved by an order passed by an Appellate Assistant Commissioner under certain sections has been given the right to appeal to the Tribunal within a certain time. By sub-section (2), the Commissioner of Income-tax has been give the right to direct the Income-tax Officer to appeal to the Tribunal if he is aggrieved by an order passed by the Appellate Assistant Commissioner under section 31. Sub-section (3) requires an appeal to the Tribunal to be in the prescribed form and prescribes other formalities. Sub-section (4) is : "The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such order thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner." Sub-section (6) provides that, subject to the provisions of section 66, an order passed by the Appellate Tribunal on appeal shall be final. The order referred to in sub-section (6) is clearly the order referred to in sub-section (4) because that is the order on appeal. Only one order by the Tribunal is contemplated by section 33, namely, an order under section 33(4). It is the order passed after hearing both the parties on the appeal preferred to the Tribunal; obviously it is final order on the appeal and no interlocutory order passed by it can be said to be such and order. There can be only one order under section 33(4) and that is the final order; all other orders previously passed by it are interlocutory orders and cannot be said to be order under section 33(4). In the instant case, the order dated January 24, 1957, by which the Tribunal, after hearing both the parties, passed the final order on the appeal, even though one of remanding the case for fresh assessment to the Income-tax Officer, was the order contemplated by section 33(4). It cannot be disputed that it was such an order and if it was such and order the earlier order passed on December 15, 1955, also could not be such an order because section 33(4) does not contemplate two orders to be passed by the Tribunal in one appeal. The order dated December 15, 1955, not having been made under section 33(4), no application for reference of any question of law arising out of it could be made under section 66(1).
The word used in section 33(4) and 33(6) is "orders"; this does not mean that more than one order can be passed under section 33(4). The word "orders" is often used in the sense of "order". "Pass orders" does not necessarily mean pass more than one order. We may refer to section 66(5) which uses the words "shall pass such orders". In the context in which they are used they cannot mean more that one order. This provision also suggests that on receiving the High Courts judgment the Tribunal is able to dispose of the appeal conformable to the judgment and it follows that the question referred to the High Court must be a question arising out of the final order passed in the appeal. If a question of law arising out of an interlocutory order is referred to the High Court, the High Courts judgment on that question will not enable the Tribunal to dispose of the appeal before it conformably to the judgment. The legislature is generally opposed to appeals against interlocutory order and one often comes across phrases like "final order". If the legislature is opposed to appeals from interlocutory orders, it stands to reason that it would be opposed also to reference applications in respect of questions of law arising out of interlocutory orders. There is nothing to indicated that the legislature intended that an application under section 66(1) could be made in respect of any order passed by the Tribunal and was not confined to the final order passed by it disposing of the appeal.
Sir R. L. Gulati relied upon Maharani Kanak Kumari Sahiba v. Commissioner of Income-tax in which Ramaswami and Ahmed JJ. held that an order like the order dated December 15, 1955, before us is an order under section 33(4), but we regret that we are unable to agree. The only reason given by the learned judges for their view is : ".... in a proper case the Income-tax Appellate Tribunal may remand an appeal for further investigation to the Income-tax Officer under the provisions of section 33(4). It cannot be doubted that the Appellate Tribunal has a great measure of discretion granted to it under section 33(4)...." There are two kinds of remand orders that may be passed by an appellate authority : (1) keeping the appeal pending before it and remanding the case for further enquiry and a further finding on an issue, and (2) allowing the appeal, setting aside the order of the inferior court and directing it to pass a fresh order. We have not the slightest doubt that the second kind of remand order passed by the Tribunal is an order under section 33(4); it is the final order on the appeal and it is an order contemplated by section 33(4), even though the assessment proceeding may remain pending before the Income-tax Officer. But the same cannot be said in respect of an interlocutory remand order which is not the final order disposing of the appeal, as the order dated December 15, 1955, and the order in the case Maharani Kanak Kumari Sahiba. Merely because the Tribunal can under section 33(4) pass an order remanding the case, it cannot be said that every order of remand passed by it comes within the scope of section 33(4). The learned judges have not noticed the difference between a final remand order and an interlocutory remand order. They have also not considered whether section 66(1) contemplates applications for referring questions of law arising out of interlocutory orders. The policy of the legislature is against appeals from interlocutory orders and we do not think that the legislature contemplated that reference applications can be made in respect of interlocutory orders passed by the Tribunal. Another decision which was relied upon is In re Trikamlal Maneklal but there the remand order passed by the Tribunal was an order finally disposing of the appeal like the order dated January 24, 1957, in the instant case. We have already said that the order dated January 24, 1957, passed by the Tribunal is an order under section 33(4).
As we point out, the order dated December 15, 1955, did not deal with question that has been referred to us. It was not contended before that order was passed that the appeal was incompetent; the statement of the case does not show that any such contention was raised before the Tribunal before that order was passed. It was raised for the first time after the reference application had been made. The Tribunal suo motu also did not deal with the question whether the appeal was competent or not. It did keep it pending and did call for a report from the Income-tax Officer but it did both these acts without finding that the appeal was competent. Therefore, it could not be said that the question about the competency of the appeal arose out of the order dated December 15, 1955. The Tribunal had no jurisdiction to refer to this court any question that did not arise out of the order passed by it on December 15, 1955, even if it was deemed to be an order under section 33(4).
The Tribunal stated in its order dated January 24, 1957, that it was a continuation of the order passed by it on December 15, 1955, but this statement did not confer any right upon the assessee to apply under section 66(1) if its provisions. Further, this statement was made after the application had already been made by the assessee; if the application, when made, did not lie, it could not be entertained by the Tribunal on the basis of what it said subsequently in another order. It was also not correct to say that the Tribunal passed one order; actually it passed two orders, one calling for a report from the Income-tax Officer on December 15, 1955, and the other disposing of the appeal finally on January 24, 1957. The assessee itself understood the Tribunal as having passed a distinct order on December 15, 1955, when it applied to it for reference of questions of law arising out of it. Had there been only one order passed by the Tribunal, it could have been the order dated January 24, 1957, and no application under section 66(1) could have been made before it was passed.
The Tribunal was wrong in saying that the question referred to us arose out of the order dated December 15, 1955, merely because it passed the final order under section 33(4) before it passed orders on the reference application. Even though the final order was passed before it passed the order on the reference application, it was bound to consider only the order passed by it on December 15, 1955, and decide whether a question of law arose out of it or not. It had no jurisdiction to consider whether any question of law arose out of the order passed by it on January 24, 1957, when the application was not for reference of any question arising out of it.
We, therefore, hold that the Tribunal had no jurisdiction to state the case to this court, and return the reference, unanswered. The Commissioner of Income-tax shall get his costs of this reference which we assess at Rs. 100. Counsels fee is assessed at Rs. 200.