Bombay High Court
Commissioner Of Income-Tax, Poona-Ii vs Smt. Nirmalabai K. Darekar on 19 December, 1988
Equivalent citations: [1990]186ITR242(BOM)
Author: S.P. Bharucha
Bench: S.P. Bharucha
JUDGMENT S.P. Bharucha, J.
1. Two questions are raised by the Revenue in this reference. They read thus :
"(1) Whether section 140A(3) of the Income-tax Act, 1961, is confiscatory and violative of article 19(1)(f) of the Constitution of India as held by the Madras High Court in the case of A.M. Sali Maricar v. ITO [1973] 90 ITR 116 ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in relying upon the said decision of the Madras High Court A.M. Sali Maricar v. ITO [1973] 90 ITR 116 ?"
2. Taking the second question first, it must be answered in the affirmative and in favour of the assessee, having regard to this court's judgment in CIT v. Smt. Godavaridevi Saraf [1978] 113 ITR 589. The question there arose in the context of the judgment of the Madras High Court referred to in the question. It was held that the concerned provision having been declared ultra vires by a High Court, the Income-tax Appellate Tribunal acting anywhere in the country was obliged to respect the law laid down by the High Court, though of a different State, so long as there was no contrary decision of any other High Court on the question. It is not disputed that at the time when the Tribunal delivered the judgment out of which this reference arises, there was no decision of any other High Court on the question of the validity of section 140A(3) of the Income-tax Act, 1961. Accordingly, the Tribunal was justified in following the Madras High Court's judgment in A.M. Sali Maricar's case [1973] 90 ITR 116.
3. The tribunal did not decide the vires of section 140(3) in the judgment out of which this reference arises, and it could not have done so. The question, therefore, does not arise out of its judgment. Nor is this court competent to decide the constitutional validity of a provision in the exercise of its reference jurisdiction.
4. The first question is, accordingly, not answered.
5. No order as to costs.