# SUNDARAM & COMPANY (P,) LTD. MADURAI v. COMMISSIONER OF INCOME·TAX, MADRAS

- **Citation:** [1967] 3 S.C.R. 798
- **Court:** Supreme Court of India
- **Decided:** 1967-04-25
- **Bench:** J. C. Shah, V. Ramaswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sundaram-company-p-ltd-madurai-v-commissioner-of-income-tax-madras-4023
- **Pages:** 10

## Headnote

Income-tax Act, 1922 (11 of 1922), ss. 34(1) (b), 66-Finance Act,
1956, proviso 2, Paragraph D-Notlce to
reopen
assessment on the
ground of "excessive relief' but reduction of rebale on super tax on the
ground "assessed at too low a rate" -Duty to enquire whether proceedings validly initlated-"Rate" in s. 34( 1)
if means fraction
of total
income-Reference-.:..Duty to decide all aspects of the question of law
referred even though not specifically argued before the Tribunal.
The Income-tax Officer jssued a notice to the assessee far reopening
the assessment for the year 1956-57 on the ground that "excessive relief"
within the meaning of s. 34(1) (b) of the Income-tax Act, 1922 had been
granted to the assessee. Rejecting the contention of ·the assessee that the
income had not been the subject of "excessive relief" and therefore the
proceedinJ!!' were unauthorised and that the amount deemed
to have
been distributed under orders under s. 23A could not be taken into consideration for the purpose of reducing the rebate of super-tax admissible
under proviso 2 to paragraph D of the Finance Act, 1956, the Incometax Officer ordered that the rebate of super-tax granted be reduced. The
Appellate As.istant Commissioner held that only a part of the amount
of dividend deemed to have been declared by the assessee could be taken
into consideration in withdrawing the rebate of super-tax.
On appeal
by the Commissioner, the Tribunal held that the case of the asses..ee did
-not fall within any of the situations contemplated by s. 34(1)(b), but
confirmed the order of the Appellant Assistant Commissioner.
On the
question "whether the setting aside of the assessment under s. 34(1)(bJ
was correct in law" the High Court was of the opinion that the claim
of the department to initiate proceedings under s. 34(1) (b)
on the
grotmd that excessive relief was allowed could not be sustained, but held
that the proceedings under the section could be initiated on the ground
that the income profits and gains of the assessee were "assessed at too
low a rate". The High Court did not record. its decision on the plea of
the assessec that in a proceeding to re-assess income initiated on a notice
that income had been subject to "excessive relief", the Income-tax Officer
was incompetent to re-assess income on the footing
that income
was
assessed at too low a rate. In appeal to this Court the assessee contended that (i) the High Court was in error in enlarging the scope of the
enquiry and entering upon a question never mooted before the Tribunal
an<l (ii) by. the use of the expression "assessed at too Jow ·a rate" it was
intended that the jurisdiction of the Income-tax Officer would be attracted only when the wrong fraction had been applied in the determination
of super-tax 3nd not when the computation of tax depended on other
factors.
HELD : (i) The case must be remanded to the High Court to determine whether the proceedings were ·validly initiated on the notice issued
a~ainst the a.sessee. [807B]
B
c
D
G
A
B
c
SUNDARAM & CO, V. C.I.T. ·(Shah, J,)
79~
The scope of the enquiry arising out -0f lhe arguments before
the
Tribunal was not whether the assessment was proper, but, whether the
Income-tax Officer was in the circumstances of the case competent to
initiate the proceeding under s. 34(1) (b) of the Income-tax Act
for
bringing to tax the excessive rebate granted to the assessee. The question referred to the High Court had to be reframed accordingly.
The
4 uestion, as framed by the Tribunal, though defective, included
that
enquiry. The High Court was,. therefore, bound to decide all aspects
of that question and it was wrong in making the assumption that because a pa:rticular aspect of the question of law raised was not ~ecifi
cally argued before the Tribunal the High Court could not deal with it.
[8020-E; 806F-H; 807A-Bl
P. S. Subramanyan, Income-tax. Officer, Companies Circle I (1) and
Anr. v. Simplex Mills Ltd, 48 l.T.R. 182 (S.C.), referred to.
(ii) The High Court was

## Text

SUNDARAM & COMPANY (P,) LTD. MADURAI
A
v.
COMMISSIONER OF INCOME·TAX, MADRAS
April 25, 1967
(J. C. SHAH AND V. RAMASWAMI, JJ.]
Income-tax Act, 1922 (11 of 1922), ss. 34(1) (b), 66-Finance Act,
1956, proviso 2, Paragraph D-Notlce to
reopen
assessment on the
ground of "excessive relief' but reduction of rebale on super tax on the
ground "assessed at too low a rate" -Duty to enquire whether proceedings validly initlated-"Rate" in s. 34( 1)
if means fraction
of total
income-Reference-.:..Duty to decide all aspects of the question of law
referred even though not specifically argued before the Tribunal.
The Income-tax Officer jssued a notice to the assessee far reopening
the assessment for the year 1956-57 on the ground that "excessive relief"
within the meaning of s. 34(1) (b) of the Income-tax Act, 1922 had been
granted to the assessee. Rejecting the contention of ·the assessee that the
income had not been the subject of "excessive relief" and therefore the
proceedinJ!!' were unauthorised and that the amount deemed
to have
been distributed under orders under s. 23A could not be taken into consideration for the purpose of reducing the rebate of super-tax admissible
under proviso 2 to paragraph D of the Finance Act, 1956, the Incometax Officer ordered that the rebate of super-tax granted be reduced. The
Appellate As.istant Commissioner held that only a part of the amount
of dividend deemed to have been declared by the assessee could be taken
into consideration in withdrawing the rebate of super-tax.
On appeal
by the Commissioner, the Tribunal held that the case of the asses..ee did
-not fall within any of the situations contemplated by s. 34(1)(b), but
confirmed the order of the Appellant Assistant Commissioner.
On the
question "whether the setting aside of the assessment under s. 34(1)(bJ
was correct in law" the High Court was of the opinion that the claim
of the department to initiate proceedings under s. 34(1) (b)
on the
grotmd that excessive relief was allowed could not be sustained, but held
that the proceedings under the section could be initiated on the ground
that the income profits and gains of the assessee were "assessed at too
low a rate". The High Court did not record. its decision on the plea of
the assessec that in a proceeding to re-assess income initiated on a notice
that income had been subject to "excessive relief", the Income-tax Officer
was incompetent to re-assess income on the footing
that income
was
assessed at too low a rate. In appeal to this Court the assessee contended that (i) the High Court was in error in enlarging the scope of the
enquiry and entering upon a question never mooted before the Tribunal
an<l (ii) by. the use of the expression "assessed at too Jow ·a rate" it was
intended that the jurisdiction of the Income-tax Officer would be attracted only when the wrong fraction had been applied in the determination
of super-tax 3nd not when the computation of tax depended on other
factors.
HELD : (i) The case must be remanded to the High Court to determine whether the proceedings were ·validly initiated on the notice issued
a~ainst the a.sessee. [807B]
B
c
D
G
A
B
c
SUNDARAM & CO, V. C.I.T. ·(Shah, J,)
79~
The scope of the enquiry arising out -0f lhe arguments before
the
Tribunal was not whether the assessment was proper, but, whether the
Income-tax Officer was in the circumstances of the case competent to
initiate the proceeding under s. 34(1) (b) of the Income-tax Act
for
bringing to tax the excessive rebate granted to the assessee. The question referred to the High Court had to be reframed accordingly.
The
4 uestion, as framed by the Tribunal, though defective, included
that
enquiry. The High Court was,. therefore, bound to decide all aspects
of that question and it was wrong in making the assumption that because a pa:rticular aspect of the question of law raised was not ~ecifi
cally argued before the Tribunal the High Court could not deal with it.
[8020-E; 806F-H; 807A-Bl
P. S. Subramanyan, Income-tax. Officer, Companies Circle I (1) and
Anr. v. Simplex Mills Ltd, 48 l.T.R. 182 (S.C.), referred to.
(ii) The High Court was right in holding that the rebate of tax and
the reduction of such rebate were essentially matters of measure or standards of -rate. The expression rate in s. 34( I) does not mean a fraction of total income; it is often used in the sense of standard or measurer
Provided the tax is computable by the application of a prescribed stan·
dard or measure, though not di'rectly related to taxable income, it may
D
be said that the tax is computed at a certain rate. The aim and object
•of the Finance Act, 1956, is to prescribe the standard or measure of
income-tax or super-tax, and an assessee escaping some of its provisions
and failing to pay the full measure of tax is "assessed at too low a rate''.
[806B-C]
E
F
G
H
C1v1L APPELLATE JuR1so1cnoN : Civil Appeal No. 2453 of
1966.
Appeal from the judgment and order dated August 9 1963
of the Madras High Court in T.C. No. 152 of 1961.
'
R. Venkatram and R. Ganapathy Iyer, for the appellant.
B. Sen and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by
Shah, J. In Sundaram & Company (Private) Ltd.-hereinafter called. "~he Compa1.1y''-the public are not substantially
interested within the i;iiean11!-g of s. 23A of the Indian Income-tax
Act, 1922. In deahng with the assessment of income of the
Company for the assessment years 1946-47 to
1951-52
the
Income-tax Officer, Central Circle, Madras, passed orders 'under
~· 23A of the Income-tax Act, 1922, and direct.ed that the total
mcome of the Company as detennined in the years of assessment
less tax payable be deemed to have been distributed amongst the
shareholders of. the Company as on the relevant dates of the General ~ody Meetings.
The following table sets out the relevant
details :
.soo
Assessment
year.
1946-47
1947-48
1948-49
1949-50
I95u-51
1951-52
SUPREME COURT REPORTS
Amount of dividend deemed to
have b~en declared.
46,563
43,959
47,829
97,875
92,591
25,899
3,54,716
[1967] 3 S.C.R
Date of order passed
under s. 23A deeming
dividend to have
been declared.
March 18, 1952
-do-
-do-
-do-
-doMarch 30, 1955
-On July 7, 1955 the Company in a general° ineeting resolved
tha\ the amount of Rs. 3,54,716/- which was under the orders
of the Income-tax Officer deemed to have been distributed as
dividend amongst the shareholders pursuant to orders under s. 23A
of the. Income-tax Act, be distributed as dividend to the shareholders, and in pursuance of that resolution proportionate part of
the dividend due to each shareholder was credited to his account.
The Income-tax Officer completed the assessment
of • the
Company for the year 1956-57 and determined Rs. 5,69,396/·
as its total income. The Income-tax Officer computed the supertax payable by the Company under the Finance Act, 1956, at the
rate of six annas and nine pies in the rupee of the total income
and granted a rebate at the rate of four annas in the rupee in
accordance with the provisions of Cl. D proviso ( i) ( b) & (ii)
of the Schedule to that Act. · Sometime thereafter the Income·
tax Officer being of the opinion that excessive relief had been
granted to the Company within the meaning of s. 34 ( 1 )(b) of
the Income-tax Act, issued a notice on January :n, 1959 for
reopening the assessment for the year 1956-57. The Company
filed its return,of income in compliance with the notice and contended that the proceedings commenc~d by the Income-tax Officer
were unauthorised, because the income of the Company had not
been the subject of "excessive relief" within the meaning of
s. 34(1)(b), and that actual distribution of dividends already
deemed to have been distributed in accordance with the orders
passed under s. 23A cannot be taken into consideration for the
purpose of reducing the rebate of .super-tax admissible under the
proviso 2 to Paragraph D of the Finance Act,
19S6. The
Income-tax Officer rejected the contentions and on;lered that the
rebate of super-tax to the extent of Rs. 80,978/ · be withdrawn.
In appeal to the Appellate Assistant Commissioner it was held
-that in the circumstances of the case, assessment could be reopened under s. 34(1)(b) on the ground that the income had
been made the subject of "excessive relief", but only Rs. 77,600/-
and not the whole amount of Rs. 3,54,716/- which was deemed
to -be distributed under orders under s. 23A could be taken into
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SUNDARAM & CO. V, C.I.T. (Shah, J.)
801
consideration as dividend distributed by the Company during the
previous year relevant to the assessment year 1956-57.
The Commissioner of Income-tax appealed to the Income-tax
Appellate Tribunal.
He contended that in. the circumstance~ .of
the case the amount of Rs. 3,54,716/- was liable to be taken mto
consideration for the purpose of Withdrawing the rebat.e of supertax admissible under the Finance Act, 1956.
The Tribunal held
that the case of the Company "did not fall within any of the
situations contemplated by s. 34( 1 )(b)" and the
Company's
income had not been the subject of excessive relief as th,e rebate
of super -tax originally granted was out of 'the tax otherwise, computable and not from the assessed income.
But the Tnbunal
continued the order of the Appellate Assistant Commissioner
directing that Rs. 77,600/- be taken into account in withdrawing
rebate Of super-tax.
The Tribunal then referred three questions to the High Court
. of Judicature at Madras ·
"1. Whether the Tribunal was justified in disposing
of 'the appeal as it did ?
2. Whether the Tribunal was right in law in entertaining the ·assessee's. contention relating to the applicability of s. 34(1) (b) under Rule 27 of the Appellate
Tribunal Rules ?
3. Whether the setting aside of the assessment under
s. 34( 1) (b) was correct in law?"
The High Court decided in favour of the Company on the first
two questions.
In considering the third question the High Court
observed that the plea of the Company that re-assessment proceedings under s. 34 ( 1 )(b). on the ground of "excessive relief cannot be initiated, must be accepted.
The Court then proceeded
to consider whether allowance of rebate to which the assessee was
not entitled, did not amount to assessing income at too low a rate,
and observed that "there can be no question that the rebate of
tax rate and a reduction of such rebate is essentially the arithmetic
ot rate.
Reading however the provisions of the Finance Act,
I 9,'6, as a :whole in the pe~spective that its chief aim and object
is to prescnbe the rate of mcome-tax and super-tax, it seems to
us that an assessee escaping some of its provisions and failing to
p~y the full measure of tax is assessed at too low a rate". The
High ~urt accordingly held that proceedings under s. 34 (1 )(b)
c&uld l:!e initiated when rebate in the payment of super-tax was
granted to the assessee without reducing it in the circumstances
set out in the second proviso to Part n of the First Schedule
Paragraph Din the Finance Act, 1956, on the ground that the
income, profits and ·gains ·Of the Company were assessed to tax
802
SUPREME COURT REPO.RTS
[1967] 3 S.C.R
at too low a rate.
The High Court answered the third question
in favour of the Commissioner. Against the order passed by the
High Court on the third question, thi; appeal is preferred by the
Company. The Commissioner of Income-tax has not challenged
the correctness of the decisions on Questions 1 & 2.
We are unable to agree with counsel for the assessee that the
first question raised an enquiry not only as to the correctness of
the procedure followed by the Tribunal,. bub also to the right of
the Income-tax Officer to initiate a proceeding under s. 34(1) (b)
to bring to tax rebate which was not reduced.
In . terms, the
first question relates· to a matter of procedure : an.d in the answer
recorded to that question it is not implied that the Income-tax
Officer had no power to initiate the proceeding under s. 34 (1) (b).
The third question raised by the Tribunal was defective. The
true scope of the enquiry arising out of the argument before the
Tribunal was not whether the order of assessment was proper,
but whether the proceeding for re-assessment was properly initiated under s. 34(1)(b). That is how the High Court also understood the question.
We therefore re-frame the question as
follows:
"Whether the Income-tax Officer was in the circumstances of the case competent to initiate the proceeding
under s. 34 (1 )(b) of the Indian Income-true Act for
bringing to tax the excessive rebate granted to the
assessee ?"
Section 34( 1) (b) of the Indian Income-tax Act, as it stood at the
relevant time, provided :
"If-
( a)
(b) notwithstanding that there has been no omission
or failure as mentioned in clause (a) on the
part of the assessee, the Income-tax Officer has
in consequence of information in his possession
reason to believe that income, profits or gains
chargeable to income-tax have escaped assessment for any year, or have been under-assessed,
or assessed at too low a rate, or have been made
the subject of excessive relief under this Act or
that excessive loss or depreciation has
been
computed,
he may in cases falling under clause (a) a~ any ~e
and in cases falling under clause (b) at any time w1thm
four years of the end of that year, serve on the assessee,
or, if the assessee is a company, on the principal officer
A
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SUNDARAM & CO. v. C.I.T. (Shah,/.)
80 3
thereof, a notice containing all or any of the requirements which may be included in a notice under subsection (2) of section 22 and may proceed to assess or
reassess such income, profits or gains or recompute the
loss or depreciation allowance; and the provisions of this
Act shall, so far as may be, apply accordingly as if the
B
notice were a notice issued under that sub-section :
c
D
E
F
G
H
"
It was held by the High Court df Bombay in P. S. Subramanyan, Income-tax Officer, Companies Circle I ( 1) Bombay and
Another v. Simplex Mills Ltd.(') that "the relief referred to in
s. 34(1)(b) of the Income-tax Act, 1922, can only be such relief
as is granted to ·the assessee by reason of hi~ income, profits and
gains being chargeable to tax. It is, therefore, referable to the
various kinds of relief afforded to the assessee under the Act in
respect of his income, profits and gains, such, for instance, as arc
granted under ss. 15A, 15C, 49A, 49B, 49C, 490 and 60 of the
Act."
This Court affirmed the judgment of the Bombay High
Court in P. S .. Subramanyan, Income-tax Officer, Companies
Circle I ( 1) and Another v. Simplex Mills Ltd.('). In Simplex
Mills'(2 ) case advance tax paid by the ass~see for the assessment
year 1952-53 was found refundable and the Income-tax Officer
allowed interest on the tax paid under s. 1 SA ( 5) of the Incometax Act, 1922, as it then stood.
The Act was amended by the
Income-tax (Amendment) Act, 1953, with retrospective effect
from April 1, 1952, and it was found that interest allowed to the
Company was excessive.
The Income-tax Officer then initiated a
proceeding under s. 34(1 )(b) to reassess the tax on the ground
that income for that year had been under-assessed and had been
made the subject of excessive relief. The Bombay High Court
rejected the claim of the Income-tax Officer, and this Court held
that the original assessment could not be reopened under s. 3'4,
because it could not be said either that there was under-assessment of the income, or that excessive relief was granted.
In the
light of that judgment, the High Court opined that the claim of
the Department to initiate a proceeding under s. 34 (1 ) (b) on the
ground that excessive relief was allowed could not be sustained.
But the High Court held that a proceediitg for reassessment could
be initiated on the ground that income had been assessed at too
low a rate.
Counsel for the Company contends that the High
Court was in error in proceeding to enlarge the scope of the
enquiry and in entering upon a question which was never mooted
before the Tribunal.
Section 2 of the Finance Act, 1956, provides insofar as it is
material, that :
(I) 48 l.T.R. 980.
(2) 48 1.T.R. 182 (S. C.)
804
SUPREME COURT REPORTS
[1967] 3 s.c.R.
"Subject to the provisions of sub-sections (2), (3),
( 4) and ( 5), for the year beginning on the 1st day of
April, 19S6,-
( a) income-tax shall be charged at the rates specified in Part I of the First Schedule . . • • •
(b) rates of super-tax shall, · for the purposes of
section SS of the Indian Income-tax Act, 1922
(XI of 1922)
. . . , be those
specified in
Part II of the First Schedule ............... "
A
B
Part II of the First Schedule specifies the rates of super-tax.
C
Clause D provides :
"In the case of every companyon the whole of total income
Rate
Provided that-
(i)
Six annas and nine
pies in the rupee.
(ii) a rebate at the rate of four annas per rupee of
the total income shall be allowed in the case of
E
any company which satisfies condition (a), but
not condition (b) of the preceding clause; and
(iii)
Provided further that-
(i) the amount of the rebate under clause (i) or
clause (ii), as the case may be, of the preceding
proviso shall be reduced
by the sum, if any,
equal to the amount or the aggregate of the
amounts, as the case may be, computed as here·
under:-
(a) on the amount representing the
face value of any bonus shares or
the amount of any bonus issued to
its share-holders during the previous year with a view to increasing
the paid-up capital, except
to the extent to which such bonus
shares or bonus have been issued
out of premiums received in cash
on the issue of its shares; and
at
the rate
of two annas
per rupee.
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(b)
SUNDARAM & CO. v. C.I.T. (Shah, I.)
in addition, in the case of a Company referred to in clause (ii) of
the preceding proviso which has
distributed to its shareholders
during the previous year dividends in excess of six per cent
of its paid-up capital, not being
dividends payable at a fixed
rateon that part of the said dividends which exceeds 6 per cent.
but does not exceed 10 per
cent. of the paid-up capital;
on that part of the said dividends which exceeds 10 per cent
of the paid-up capital;
80$
.. at the rate
of two annas
per rupee.
.. at the rate of
three annas
per rupee.
"
Paragraph-Dread withs. 2(b) of the Finance Act, 1956 fixes the
rate of super-tax payable by Companies for the purpose of s. 55
of the Indian Income-tax Act.
From the super-tax declared
payable, in certain conditions rebate is granted, and that rebate
is also related to the total income of the assessee. By the second
proviso, part of the rebate may be withdrawn, if the Company has
in the previous year issued bonus shares or bonus or has distributed
dividend in excess of six per cent. of its paid-up capital.
The
super-tax and the rebate admissible are both related to the total
income, whereas the reduction of rebate is related to the face
value of the bonus shares or of the value of bonus or the amount
of dividends distributed. Super-tax payable by a. Company is
therefore determined as a fraction of the total income, reduced
by a percentage of the value of the bonus shares or bonus or
dividends distributed.
Counsel for the Company contends that the expression "too
low a rate" used in s. 34 (I )(b) must, having regard to the context in which the expression is used and in the scheme of the
Indian Income-tax Act, be regarded merely as the fraction which
determines. ta~ .liability of the assessee, but when in computing
super-tax hab1hty, the Income-tax Officer has after detenninin"
the amount by applying the fraction to reduce the resultant by
reference to a factor unrelated to total income it cannot be said
that. tax is charged at a certain rate.
Couns;I says that the
Legislature has not used the expression "assessed at too low an
amount" but the expression used is "assessed at too low a rate" :
therefore says counsel for the Company the jurisdiction of the
T ncome-tax Officer will be attracted only when the wrong fraction
806
SUPREME COURT REPORTS
[1967] 3 S.C.R.
has been applied in the determination of super-tax, and not when
the computation of tax depends on other factors.
We are unable to accept this contention.
'.!'he assumption
that the expression "rate" has been used in s. 34(1) as meaning
a fraction of total income is, in our judgment, not warranted. By
the use of the expression "rate" in the context in which it occurs,
undoubtedly a relation between the taxable income and the tax
charged is intended, but the relation need not be of the nature
of proportion or fraction.
The expression "rate" is often used in
the sense of a standard or measure. Provided the tax is computable by the application of a prescribed standard, or measure,
though not direc!ly related to taxable income, it may be called
tax computed at a certain rate. We agree with the High Court
that the rebate of tax and the reduction of such rebate are essen-
. tially matters of measure or standards of rate.
The chief aim and
object of the Finance Act, 1956, is to prescnbe the standard or
'measure of income-tax and super-tax and it seems that an assessee
escaping some of its provisions, and failing to pay the full measure
of tax is assessed at too low a rate.
But the view we have taken is not sufficient to dispose of the
appeal. It may be reca!Jed that the question arising out of the
order of the Tribunal was· about the competence of the Income-tax
Officer•to initiate proceedings under s. 34(1) (b). It is true that
it was not argued before the Tribunal on behalf of the Company
that on the notice served by the Income-tax Officer proceedings
for reassessment could only be initiated 'on the ground that
income had been. the subject of excessive relief, and not on any
other ground.
But the Company did contend that the initiation
of the reassessment proceeding was invalid, and the plea, that the
initiation was invalid because the notice was defective was only
an aspect of the plea raised by the Company. The question as
originally raised by the Tn'bunal, and as reframed by us, includes
that enquiry.
Counsel for the Company did argue before the High Court
that in a proceeding to reassess income initiated on a notice that
incomt; has been subject to excessive relief, the Income-tax
Officer was incompetent to reassess income on the footing that
income was assessed at too low a rate, but the High Court did
not record their decision on that plea : they merely suggested that
it will be open to the Company. to raise the question when the
matter is again taken up for consideration. If however the question arising out of the order of the Tribunal was, as correctly
pointed out by the High Court, one about the "validity of initiation of proceeding under s. 34(1)(b)", the High Court was
bound to decide all aspects of that question raised before them.
before recording an answer : if they did not, the Tribunal would
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SUNDARAM & CO. v. C.I.T. (Shah,/.)
807
be powerless to enter upon an enquiry of any other aspect of the
question after answer to the question is recorded by the High
Court. We are unable to agree with the assumption made by the
High Court that because a particular aspect of the question of law
raised was not specifically argued before the Tribunal, the High
Court cannot deal with that aspect.
We are, in the state of the record before us, unable to record
an answer to the question, and the case must be remanded to the
High Court to determine whether the proceedings were validly
initiated on the notice issued against the Company. The notice
which was served upon the Company is not included in the paper
book prepared for use in this Court. The notice must of necessity be part of the record of the Income-true Officer, even if it
be not on· the record of the Tribunal. It will be open to the·
High Court, in determining the contention raised by the Company, to call for a supplementary statement of the case relating
to the form and contents of the notice and the validity thereof
from the Tribunal. After receiving the supplementary statement, if any, the High Court will proceed to dispose of the third
question in the light of the reasons set out by us in this judgment.
Costs of this appeal will be costs in the High Court.
Y.P.
Appeal remanded.
L9SupCl/67-8