Kerala High Court
Commissioner Of Income-Tax vs K.S.R.T.C. Pension And Gratuity Fund ... on 8 June, 1987
Author: K.S. Paripoornan
Bench: K.S. Paripoornan
JUDGMENT K. Sreedharan, J.
1. This is a petition under Section 256(2) of the Income-tax Act, 1961. The Revenue prays for directing the Income-tax Appellate Tribunal, Cochin Bench, to state the case and refer the following questions of law for decision by this court:
" (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the Commissioner of Income-tax (Appeals) that only the provisions of Section 161(1) should apply to the facts of the case ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in finding that the shares of the beneficiaries were not unknown and indeterminate ?"
2. The assessee is the Kerala State Road Transport Corporation Pension and Gratuity Fund Trust. It is the contention of the Revenue that the shares of the beneficiaries of the Trust Fund are unknown and indeterminate, that none of the beneficiaries has a right to the corpus of the Fund, and, therefore, the provisions of Section 164(1) of the Income-tax Act should be applied. This contention of the Revenue did not find favour with the Appellate Assistant Commissioner and with the Income-tax Appellate Tribunal, Cochin Bench. Hence this petition under Section 256(2) of the Income-tax Act.
3. We heard Sri. N.R.K. Nair, learned counsel appearing for the Revenue and learned counsel representing the assessee-respondent.
4. The order of assessment with which this original petition is related concerns the assessment year 1975-76. In the assessee's own case in the proceedings under the Wealth-tax Act for the assessment years 1968-69 to 1975-76, the Income-tax Appellate Tribunal took the view that the shares of the beneficiaries were not unknown and indeterminate. The said decision was made applicable to the case of assessment under the Income-tax Act as well. On that basis, the Income-tax Appellate Tribunal decided the liability of the assessee under the Income-tax Act for the assessment years 1971-72 to 1973-74. Even then, according to learned counsel appearing for the Revenue, a question of law arises from the decision rendered by the Income-tax Appellate Tribunal and that question has to be directed to be referred to this court for decision.
5. As observed earlier, the Income-tax Appellate Tribunal decided the claim put forward by the Revenue against them for the assessment years 1971-72 to 1973-74. The Revenue challenged that decision before this court in ITR Nos. 259 to 264 of 1980 (CIT v. K.S.R.T.C. General Provident Fund Trust [1986] 161 ITR 681). The questions referred to this court in those cases were identical to the questions sought to be referred in this petition. A Division Bench of this court by judgment dated January 15, 1986, answered the above questions in the said I.T.Rs. in the affirmative, i.e., in favour of the assessee and against the Department. The Revenue contends that the decision rendered by this court is pending in appeal before the Supreme Court. So, the matter is not beyond doubt, or the question of law now urged is an open question. Therefore, it is argued that this court should allow this original petition and direct the Income-tax Appellate Tribunal to state the case and to refer the questions. We are unable to agree to the said submission made by learned counsel appearing for the Revenue.
6. Section 256(2) of the Income-tax Act reads as follows :
"If, on an application made under Sub-section (1), the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may, within six months from the date on which he is served with notice of such refusal, apply to the High Court, and the High Court may, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and to refer it, and on receipt of any such requisition, the Appellate Tribunal shall state the case and refer it accordingly."
7. As per the above provision, the High Court may, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and to refer the same to the court. This means the High Court has got a discretion in the matter. If the High Court is satisfied with the correctness of the decision of the Appellate Tribunal, the High Court need not require the Appellate Tribunal to state the case and to refer the same. The satisfaction as to the correctness of the decision of the Tribunal need not be based on an authoritative pronouncement rendered by the Supreme Court of India.
8. In ITR Nos. 259 to 264 of 1980, (CIT v. K.S.R.T.C. General Provident Fund Trust [1986] 161 ITR 681) a Division Bench of this court decided the identical question in relation to the same assessee against the Revenue. The learned counsel appearing for the Revenue has not succeeded in canvassing the correctness of the conclusions arrived at by this court. No circumstance has been brought to our notice which necessitates a second look into the aspects covered by the earlier decision. Thus, as far as the questions of law involved in this case are concerned, the decision of this court governs the field. The Income-tax Appellate Tribunal decided the appeals before it in consonance with the view taken by this court. In other words, the law is settled by this court and while deciding the issue in controversy, the Tribunal merely followed the same. Then it is obvious that even though a question of law arises, it will be permissible for the High Court to reject the application under Section 256(2) of the Income-tax Act, on the ground that the decision of the Appellate Tribunal is correct, being in tune with the decision of the High Court. This view taken by us has been recognised by the Madras High Court in CIT v. Carborandum Universal Ltd. [1985] 156 ITR 1.
9. M.N. Chandurkar, C.J., speaking for the Bench, observed (p. 6):
" Where the law is settled by the High Court and while deciding the matters in controversy raised before the Tribunal, the Tribunal is merely following the decision of the High Court and applying the said decision, then it is obvious that even though a question of law may arise, it will be permissible for the High Court to reject the application under Section 256(2) on the ground that the decision of the High Court has been followed by the Tribunal."
10. The learned Chief Justice went on to state (p. 10);
" But, on principle, we do not think there is any difference because the mere fact that leave has been granted against the decision of this court would not automatically create any infirmity in the precedential value of the decision of this court or the value of the decision as laying down the law binding the assessee and the Revenue within the jurisdiction of this court."
11. Wo are in respectful agreement with this statement.
12. Since we are satisfied with the correctness of the decision of the Appellate Tribunal, we find no merit in this original petition. No referable question of law, therefore, arises out of the order of the Appellate Tribunal. We decline to direct the Appellate Tribunal to refer the questions of law for decision by this court.
13. The original petition is without merit and it is accordingly dismissed.