Report No. 58
Provision in Income-tax Act
6.5. We shall briefly deal with provisions in the Income-tax Act. The provisions in regard to reference to the High Court are contained in sections 256 to 260 of that Act. Section 256(1) provides that the assessee or the Commissioner may, within the prescribed period, move the Appellate Tribunal by an application made in that behalf in the prescribed form, for a reference to the High Court on any question of law arising out of such order. If further imposes upon the Appellate Tribunal an obligation to draw up a statement of the case and refer it to the High Court within the prescribed period.
6.6. Sub-section (2) of section 256 deals with cases where the Appellate Tribunals refuses to state the case on the ground that no question of law arises, and it lays down that in such cases, the assessee or the Commissioner may, within the prescribed period, move the High Court for a direction that the Tribunal be called upon to state a case an to refer it. If the application made by the assessee or the Commissioner under this clause succeeds and the High Court requires the Tribunal to state the case, the Tribunal shall state the case and refer it accordingly. That is the effect of the provisions of clauses (2). With sub-section (3) of section 256, we are not concerned.
6.7. Section 257 authorises the Appellant Tribunal to draw up a statement of the case and refer it, through its President, to the Supreme Court, if, on an application made to it under section 256 it is "of the opinion that on account of conflict in the decisions of the High Courts in respect of any particular question of law, it is expedient that such a reference should be made."
6.8. Section 258 empowers the High Court or the Supreme Court to refer the case back to the Tribunal for the purpose of making such additions to the reference already made by it or such alternations in such a reference, if the High Court or the Supreme Court is satisfied that the statement in the case referred to it is not sufficient to enable it to determine the question raised thereby. In other words, under this section, a further statement or a modification of the statement already made can be requisitioned by the High Court or the Supreme Court.
6.9. Section 259 provides for the manner in which the High Court should hear Income-tax reference and dispose of the same. Section 260 lays down that a copy of the judgment delivered by the High Court or the Supreme Court will be forwarded to the Tribunal in the manner indicated by the section and that on receipt of such a copy, the Tribunal shall pass such orders as are necessary to dispose of the case conforming to such act Clause (2) of section 260 deals with the question of costs with which we are not concerned.
6.10. Section 261 provides for an appeal to the Supreme Court against the judgment of the High Court delivered by it on a reference made to it under section 256 provided the High Court certifies the case to be a fit one for appeal to the Supreme Court. Section 262(1) lays down the procedure for the hearing of the appeals be fore the Supreme Court. Sub-section (2) and (3) of section 262 are not relevant for our purpose.
6.11. It may, incidentally, be pointed out that the order passed by the High Court calling upon the Tribunal to state a case for the decision of the High Court can be described as an "order in the nature of a mandamus".