Judgment BANERJEE, J. 1. IN this reference we are required to give our opinion on the following question :-- "Whether in the facts and circumstances of these cases, the Tribunal was right in holding that the directors of the respondent company had a controlling interest in it as contemplated by s. 2(21) of the EPT Act." This reference has been made at the instance of the CIT of Excess Profits Tax Act, West Bengal, and arises out of five consolidated applications made under the Excess Profits Tax Act covering the chargeable accounting periods ended 31st Dec., 1939, to 31st Dec., 1943. The point involved in them is the same. The dispute before the AAC and the Tribunal was whether the respondent company was or was not a director controlled company within the meaning of s. 2(21) of the Excess Profits Tax Act, 1940, during the chargeable accounting periods in question. The material portion of that section is as follows : "Statutory percentage" means--(a) in relation to a business carried on by a body corporate (other than a company the directors whereof have a controlling interest therein), eight per cent. per annum ; . . . . (c) in relation to a business to which sub-cl. (a) does not apply, ten per cent per annum. If the respondent company is a director controlled company, then on the increase in its average capital, the statutory percentage allowed under that section will be 10 per cent. and if not, it will be 8 per cent. The respondent company was incorporated under the INdian Companies Act having a capital of Rs. 36 lacs divided into 3,60,000 shares of Rs. 10 each. During the chargeable accounting periods in question, these shares were held as follows :-- Article 90 of the Articles of Association of the respondent company is as follows :-- Name of shareholder. Number of shares held in C. A. Ps. ended 31-12-1939 and 31- 12-1940 Number of shares held in C. A. Ps. ended 31-12-1941,31-12- 1942 and 31-12-1943 1.M/s Aluminium Ltd. MONTREAL 3,59,790 3,59,600 2. Mr. L. G. Bash 10 ... 3. " P. J. Pathak 100 100 4. " Manu Subhedar 100 100 5. " H. K. Shah ... 100 6. " Kenneth Hall ... 100 "90. ended 31-12-1939 and 31- 12-1940 Number of shares held in C. A. Ps. ended 31-12-1941,31-12- 1942 and 31-12-1943 1.M/s Aluminium Ltd. MONTREAL 3,59,790 3,59,600 2. Mr. L. G. Bash 10 ... 3. " P. J. Pathak 100 100 4. " Manu Subhedar 100 100 5. " H. K. Shah ... 100 6. " Kenneth Hall ... 100 "90. Where a company registered under the provisions of the INdian Companies Act or not is a member of this company a person duly appointed to represent such company at a meeting of this company in accordance with the provisions of s. 80 of the INdian Companies Act, 1913, shall not be deemed to be a proxy but shall be entitled to vote for such company on a show of hands and to exercise the same powers on behalf of the company which he represents as if he were an individual member of this company including the power to appoint a proxy whether special or general and the production at the meeting of a copy of such resolution appointing such representative duly signed by one director of such company and by the secretary (if any) and certified by them or him as being a true copy of the resolution shall on production at the meeting be accepted by this company as sufficient evidence of the validity of his appointment." Article 105 empowers Aluminium, Ltd., to appoint three permanent directors on the board of directors. Article 113 provides that the nominee director appointed by Aluminium, Ltd., shall act as chairman of the meeting of the directors. 2. THE first directors were Mr. Jeewanlal Motichand and Mr. Ramji Hansraj nominated by the respondent company, and Mr. L. G. Bash, Mr. C. G. Bowen and Mr. R. E. Powell nominated by Aluminium, Ltd. THE articles also provide that the directors nominated by Aluminium, Ltd., were entitled to retain office for life. All the life directors except Mr. Bash ultimately retired. Mr. Bash continued in that office. By several resolutions passed by the directors of Aluminium, Ltd., between 23rd May, 1935, and 20th October, 1942, it was resolved that Aluminium Ltd., "a corporation organised and existing under the Companies Act of the Dominion of Canada, hereby constitutes and appoints Mr. All the life directors except Mr. Bash ultimately retired. Mr. Bash continued in that office. By several resolutions passed by the directors of Aluminium, Ltd., between 23rd May, 1935, and 20th October, 1942, it was resolved that Aluminium Ltd., "a corporation organised and existing under the Companies Act of the Dominion of Canada, hereby constitutes and appoints Mr. Lawson G. Bash its true and lawful agent and attorney-in-fact for it and in its name, place and stead to vote and/or from time to time to appoint special or general proxy to vote the said shares on behalf of Aluminium, Ltd., at any general or special meetings of the shareholders of Jeewanlal (1929), Ltd." The resolutions recite Article 90 set out above. The "said shares" in the resolutions refer to the shares owned by Aluminium, Ltd. and Jeewanlal (1929), Ltd. is the respondent company. The AAC held that Mr. Bash functioned in the dual capacity of a director of the assessee company and as an agent of Aluminium, Ltd. and that he was controlling the assessee company by exercising the voting rights in respect of the shares held by the foreign company as agent of the said company and not as a director of the assessee company, and on that view, he, in agreement with the ITO, treated the assessee as not a directorcontrolled company within the meaning of s. 2 (21) of the Excess Profits Tax Act. From this order there was an appeal to the Tribunal. The Tribunal held that in view of the power-of- attorney given to Mr. Bash by the Aluminium, Ltd., there was no room for doubt that the respondent company was a director controlled company and set aside the order of the Appellate Asstt. CIT. 3. THE Commissioner of the Excess Profits Tax thereupon asked the Tribunal to make a reference saying that the following question of law, among others, arose out of the order of the Tribunal :-- "Whether on the facts and in the circumstances of the case and on the construction of the power- of-attorney, the Tribunal was right in holding that the assessee was a company the directors whereof had a controlling interest therein." THE Tribunal accordingly has made the reference and has asked for our opinion on the question formulated by it is stated above. This is the question of which we have to express our opinion. 4. This is the question of which we have to express our opinion. 4. ON behalf of the CIT, a point was taken by Dr. S. K. Gupta that Article 90 in the Articles of Association was ultra vires the Indian Companies Act and, therefore, was invalid, and consequently the power-of-attorney given to Mr. Bash was of no effect. Counsel referred to s. 80 of the Act, which is as follows :-- "A company which is a member of another company may, by resolution of the directors, authorise any of its officials or any other person to act as its representative at any meeting of that other company, and the person so authorised shall be entitled to exercise the same powers on behalf of the company which he represents as if he were an individual shareholder of that other company." The "company" in the section means a company incorporated under the Indian Companies Act. Aluminium, Ltd., is not a company incorporated under the Indian Companies Act. Applicant's counsel Dr. S. K. Gupta said that s. 80 of that Act had no application to the case of Aluminium, Ltd. He also pointed out that apart from s. 80 there was no other provision in the Act which authorised Aluminium, Ltd., to give such a power-of-attorney and so the power given to Mr. Bash was invalid. It is true that s. 80 does not apply and there is no provision in the Companies Act which expressly authorises the company to give such a power-of-attorney. But that does not mean that Aluminum, Ltd., cannot give such a power-of-attorney. A corporation has no body nor a soul and must, ex necessitate rei, act through some human agency. If this is so, I do not see any reason why Aluminium, Ltd., could not give such a power-of- attorney to Mr. Bash. Indeed the form of the power-of-attorney is taken from the Encyclopedia of Forms edited by Dr. Underhill and is also given in Palmer's Company Precedents. 5. BOTH counsel agree that the English Companies Acts do not contain any express provision authorising an English company to execute a general power-of-attorney like the one under consideration. If a corporation has no authority to execute such a power, I do not see any meaning in the great authorities giving the forms. I have above referred to, as specimen forms. BOTH counsel agree that the English Companies Acts do not contain any express provision authorising an English company to execute a general power-of-attorney like the one under consideration. If a corporation has no authority to execute such a power, I do not see any meaning in the great authorities giving the forms. I have above referred to, as specimen forms. But in the reference before us we are not called upon to decide the question raised by Dr. Gupta. We are of opinion that the applicant before us is not entitled to take the point as to the invalidity of the power. The point the applicant took before the Tribunal was not that the power was invalid but that on the true construction of the power given to Mr. Bash, he was not entitled to vote as a director in respect of the shares held by Aluminium, Ltd. There the applicant argued that by virtue of the power given to Mr. Bash, he could only vote as an agent of Aluminium, Ltd., and, therefore, the respondent company was not a director controlled company. It is clear, therefore, that the argument was based on the validity of the power. 6. BUT now Dr. Gupta seeks to argue that such a power is invalid. We are clearly of opinion that the point as to the invalidity of the power having not been taken before the Tribunal, it does not arise out of the order. It must be remembered that the reference has been made under s. 66 of the Indian IT Act. That section authorises the High Court to issue a mandamus to an inferior Court or a public officer to show cause why a particular act should not be done or forborne. One of the principles of mandamus is that the Court never issues a mandamus unless it is shown that it is incumbent on the inferior Court to do an act or forbear from doing an act. In this case how could it possibly be said that it was incumbent on the Tribunal to make a reference as to the invalidity of the power when that point was not raised before it ? Further no mandamus is issued unless it is just so to do. In this case how could it possibly be said that it was incumbent on the Tribunal to make a reference as to the invalidity of the power when that point was not raised before it ? Further no mandamus is issued unless it is just so to do. As I have said before, the applicant before us proceeded before the Tribunal, the AAC, and the ITO on the footing that the power was valid. How can the applicant now be allowed to argue his case on the footing that the power is invalid ? It would be most unjust for this Court to allow such a point to be taken. We have been referred to a recent decision of the Bombay High Court as an authority for the proposition that even if a point is not taken before the Tribunal, such a point can be said to arise out of the order of the Tribunal. We are unable to take that view. It has been clearly laid down in Abboy Chetty vs. CIT, Madras (1947) 15 ITR 442 AIR 1948 Mad 181, that a question of law can be said to arise out of an order of the Tribunal only if such order discloses that the question was raised before the Tribunal. A question of law not raised before the Tribunal cannot be said to arise out of its order even if on the facts of the case appearing from the order, the question fairly arises. 7. WE respectfully agree with the view expressed by the Madras High Court. The decision of the Madras High Court accords with the principle underlying a mandamus. Dr. Gupta argued that the question framed by the Tribunal was in very wide terms and as such he was entitled to take the point before us. WE do not agree. The matter surely does not rest on the words used by the Tribunal in framing the question but on the substance of the matter. The only point, therefore, for our consideration is whether in view of the fact that Mr. Bash had a valid power-of- attorney from Aluminium, Ltd., to vote on the shares held by that company, the respondent company can be said to be a director controlled company. The question depends on the meaning to be given to the words "controlling interest" in s. 2(21). Bash had a valid power-of- attorney from Aluminium, Ltd., to vote on the shares held by that company, the respondent company can be said to be a director controlled company. The question depends on the meaning to be given to the words "controlling interest" in s. 2(21). The control of a company resides in the voting power of its share-holders. "Controlling interest" means the extent to which the share-holders have the power of controlling the decisions of the company by vote. The fact that the beneficial interest in the shares is in a third party is immaterial. 8. NO distinction can be made between the case when the director trustee has, and when he has not, a beneficial interest in the shares. This is the decision of the House of Lords in IRC vs. J. Bibby and Sons, Ltd (1945) 1 All ER 667 14 ITR Suppl 7. In this case the issued capital of the company concerned consisted of 750,000 1 pre ference shares and 500,000 1 ordinary shares. The preference shares carried no votes. Each ordinary share carried one vote on a poll. There were eight directors who were respectively beneficial owners and registered holders of ordinary shares which amounted to a total of 209,332 shares. Three of the directors were registered as joint holders of 57,500 other ordinary shares which they held as trustees of their sister's marriage settlement. The company employed in its business in the chargeable accounting period from 1st April, 1939, to 31st Dec., 1939, an average amount of capital greater than the average amount in the standard period and was, therefore, by virtue of the Finance (NO. 2) Act, 1939, s. 13(3), entitled to have its standard profits increased by a percentage of the increase in its capital. Sub- s. (9) of the same section provided that if the directors have a "controlling interest" in the company, the standard profits might be increased by 10 per cent., but where they had no such interest, only by 8 per cent. The question for the determination of the Court was, therefore, whether the 57,500 shares ought to be added to the 209,332 shares for the purpose of determining whether the directors had a controlling interest in the respondent company. The question for the determination of the Court was, therefore, whether the 57,500 shares ought to be added to the 209,332 shares for the purpose of determining whether the directors had a controlling interest in the respondent company. The House of Lords, affirming the decision of the Court of Appeal, held that on a true construction, the words "controlling interest"" did not refer to the directors' beneficial interest in the company, but to the power of controlling by votes the decisions binding on the company in the shape of resolutions passed at a general meeting. The fact that a vote carrying share was vested in a director as trustee was, therefore, as far as the company was concerned, immaterial. Accordingly, the directors were entitled to include the shares held by them as trustees in computing the total number of the shares held by them for the purpose of ascertaining whether they had a controlling interest in the company. 9. AGAIN, the expression "controlling interest" has been explained by the House of Lords in F. A. Clark and Sons, Ltd. vs. IRC (1943) 11 ITR SUPPL 29 Tax Cas 49 at p 67. Viscount Simon, L. C., made the following observations at page 67 :-- "The case turns on the meaning of the words ' controlling interest ' in the context in which they are used. The appellant argues that, in order that one company should have a controlling interest in another, it must be the beneficial owner of a requisite number of shares in that other company, either registered in its own name or in the name of its nominees ; and that if company No. 1 owns all the shares in company No. 2, which in turn owns all the shares in company No. 3, company No. 1 has no interest, controlling or otherwise, in company No. 3. It is true that in such circumstances company No. 1 owns none of the assets of company No. 2, and a fortiori owns none of the assets of company No. 3, and in that sense neither owns, nor has an interest in, company No. 3. But that is to treat the phrase ' controlling interest ' as capable of connoting only a proprietary right, that is, an interest in the nature of ownership. But that is to treat the phrase ' controlling interest ' as capable of connoting only a proprietary right, that is, an interest in the nature of ownership. The word ' interest ', however, as pointed out by Lawrence, J., is a word of wide connotation and I think the conception of ' controlling interest ' may well cover the relationship of one company towards another, the requisite majority of whose shares are, as regards their voting power, subject, whether directly or indirectly, to the will and ordering of the first mentioned company. If, for example, the appellant company owns one-third of the shares in company X, and the remaining two-thirds are owned by company Y, the appellant company will none the less have a controlling interest in company X if it owns enough shares in company Y to control the latter. In my opinion this is the meaning of the word ' interest ' in the enactment under consideration, and where one company stands in such a relationship to another, the former can properly be said to have a controlling interest in the latter. This view appears to me to agree with the object of the enactment as it appears on the face of the Act. I find it impossible to adopt the view that a person who (by having the requisite voting power in a company subject to his will and ordering) can make the ultimate decision as to where and how the business of the company shall be carried on, and who thus has in fact control of the company's affairs, is a person of whom it can be said that he has not in this connection got a controlling interest in the company." 10. IN CIT, Bombay vs. Bipin Silk Mills, Ltd.(1946) 14 ITR 344 AIR 1947 Bom 45, the same view was taken. IN that case out of the 100 shares of the assessee company 43 were held by the directors in their own right. Twenty shares were held by five persons as trustees, one of them A being also a director. It was argued that interest contemplated by s. 2(21)(a) of the Excess Profits Tax Act, 1940, was beneficial interest and, therefore, the trustees could not be said to have an interest in the shares within the meaning of that section. Twenty shares were held by five persons as trustees, one of them A being also a director. It was argued that interest contemplated by s. 2(21)(a) of the Excess Profits Tax Act, 1940, was beneficial interest and, therefore, the trustees could not be said to have an interest in the shares within the meaning of that section. The High Court (Stone, C. J., and Kania, J.) held that the interest of the trustees in the shares was interest within the meaning of the section and that as under the trust deed and also the Articles of Association of the company the trustee A had the right to vote as he pleased at a meeting as between the company and the shareholder, he had a controlling interest in respect of the 20 shares, and the company, therefore, was a director controlled company within the meaning of the section. Dr. Gupta referred us to a later Bombay case, New Shorrock Spinning and Manufacturing Co., Ltd. vs. CIT, Bombay North (1950) 18 ITR 712, in which a contrary view was taken. In this case the High Court (Chagla, C. J., and Tendolkar, J) has taken the view that if the directors can influence the ultimate decision of the company, they have a controlling interest. But the ultimate control must be brought about by directors having a majority of votes on the register and not by any extraneous circumstances which may result in the majority against them being reduced to a minority. With respect, we are unable to agree with the view expressed in the later Bombay case. 11. IT is to be noted that this case does not make any reference to the earlier Bombay case and it does not appear that their Lordships' attention was drawn to that case. The material words in the section which is now under consideration are "directors whereof have a controlling interest therein." The section does not make any reference to any register. There is nothing in the section to show that such control must be brought about by directors having a majority of votes on the register. 12. IT is unnecessary to discuss other cases which were cited by counsel because in my humble opinion the two decisions of the House of Lords and the earlier Bombay case very clearly decide the meaning of the expression "controlling interest" in the section under consideration. 12. IT is unnecessary to discuss other cases which were cited by counsel because in my humble opinion the two decisions of the House of Lords and the earlier Bombay case very clearly decide the meaning of the expression "controlling interest" in the section under consideration. IT is clear, therefore, on the principle stated above that the respondent is a director controlled company. IT is quite true that Mr. Bash had no beneficial interest in the shares which were owned by Aluminium, Ltd., but by virtue of the power he held from that company, he, a director, was in a position to control the decision of the respondent company by votes at a general meeting. The applicant has referred us to Article 88 to show where the voting right was. That article is fatal to the applicant's case because, if each shareholder is taken to have a vote, it is clear that of the six shareholders, the directors have the majority votes. The answer to the question asked, therefore, must be in the affirmative. The applicant must pay the costs of the reference.