Commissioner of Income Tax v. L. K. S. Ganee — 1998 DIGILAW 478 (MAD)

Judgment :- JANARTHANAM J. This tax case petition, at the instance of the Commissioner of Income-tax, Coimbatore, is for the issuance of a direction to the Tribunal to state a case and refer the question of law as below for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified and had valid materials in cancelling the penalty levied under section 271(1)(c) of the Income-tax Act, 1961 ?" The assessee has been served with the process of this court. Notwithstanding the service of process, the assessee did not choose, to engage a counsel of his choice. When the, matter is listed for hearing today (25-3-1998), neither the assessee nor any one on his behalf is present before us to defend him in this action. In such a situation, there is no other go for us except to dispose of the matter on its merits, after hearing the arguments of Mrs. Chitra Venkataraman. The rationale for the rejection of the reference application is traceable to the relevant portions of paragraphs 3 and 4 of the order of the Tribunal, which run as under: "3. The Tribunal noticed the circumstances in which the income was estimated both by the assessee and the Assessing Officer and also took notice of the fact that the authorities have been holding that it would not be possible in this line of business to have proper accounts nor was it possible to verify the expenses or the claims for unsold tickets as persons in this trade had to deal with a large, number of hackers and petty traders who do not themselves maintain accounts. Thus, verification was not possible in this line of business and necessarily income had to be estimated. The Tribunal further stated that this feature of the trade has been noticed by the Tribunal in the case of S. S. Manian and Co. (ITA No. 2347/M of 1986), in its order dated March 13, 1989, and a similar feature was also noticed by the Commissioner of Income-tax in the assessee's own case for the assessment year 1982-83 in his order dated September 10, 1985. (ITA No. 2347/M of 1986), in its order dated March 13, 1989, and a similar feature was also noticed by the Commissioner of Income-tax in the assessee's own case for the assessment year 1982-83 in his order dated September 10, 1985. Taking judicial notice of the peculiar features obtaining in this business of lottery sales, the Tribunal upheld the order of the Commissioner of Income-tax (Appeals) for the reasons that in such a state of affairs estimate was inevitable at each stage of the proceedings and merely because there was variation in the estimate of the income mens rea cannot be attributed to the assessee. Thus the Tribunal dismissed the Revenue's appeal. 4. From the facts narrated above and the reasoning of the Tribunal arising from these facts, we hold that no question of law arises on the same. The reference application rejected." The main plank for the rejection of the reference application as traceable to the order of the Tribunal is the taking of judicial notice of the peculiar features obtaining in the business of sale of lottery tickets. Mrs. Chitra Venkataraman, learned counsel appearing for the Revenue, could mount a frontal attack on such rationale having been seized by the Tribunal in rejecting the reference application. What she would say is that the Tribunal went wrong in taking judicial notice of the peculiar features obtaining in the business of sale of lottery tickets inasmuch as such taking of judicial notice is not permissible under law, and for this, she would rely upon sections 56 and 57 of the Indian Evidence Act, 1872. Section 56 prescribes that facts judicially noticeable need not be proved. Section 57 provides the necessary and requisite facts of which courts must take judicial notice and the section runs as under: "57. Facts of which court must take judicial notice. Section 56 prescribes that facts judicially noticeable need not be proved. Section 57 provides the necessary and requisite facts of which courts must take judicial notice and the section runs as under: "57. Facts of which court must take judicial notice. - The court shall take judicial notice of the following facts (1) All laws in force in the territory of India; (2) All public Acts passed or hereafter to be passed by Parliament of the United Kingdom, and all local and personal Acts directed by Parliament of the United Kingdom to be judicially noticed; (3) Articles of War for the Indian Army, Navy or Air Force; (4) The course of proceeding of Parliament of the United Kingdom, of the Constituent Assembly of India, of Parliament and of the Legislatures established under any laws for the time being in force in a Province or in the States; (5) The accession and the sign manual of the Sovereign for the time being of the United Kingdom of Great Britain and Ireland;(6) All seals of which English courts take judicial notice; the seals of all the courts in India and of all courts out of India established by the authority of the Central Government or the. Crown Representative; the seals of courts of Admiralty and Maritime jurisdiction and Notaries Public, and all seals which any person is authorised to use by the Constitution or an Act of Parliament of the United Kingdom or an Act or Regulation having the force of law in India; (7) The accession to office, names, titles, functions and signatures of the persons filling for the time being any public office in any State, if the fact of their appointment to such office is notified in any Official Gazette; (8) The existence, title and national flag of every State or Sovereign recognised by the Government of India; (9) The divisions of time, the geographical divisions of the world, and public festivals, fasts and holidays notified in the Official Gazette; (10) The territories under the dominion of the Government of India; (11) The commencement, continuance and termination of hostilities between the Government of India and any other State or body of persons; (12) The names of the members and officers of the court, and of their deputies and subordinate officers and assistants, and also of all officers acting in execution of its process, and of all advocates, attorney, proctors, vakils, pleaders and other persons authorized by a law to appear or act before it; 13. The rule of the road on land or at sea. In all these cases, and also on all matters of public history, literature, science or art, the court may resort for its aid to appropriate books or documents of reference. If the court is called upon by any person to take judicial notice of any fact, it may refuse to do so, unless and until such person produces any such book or document as it may consider necessary to enable it to do so." On the face of the provisions contained in sections 56 and 57 of the Indian Evidence Act, it appears that taking judicial notice of peculiar features obtaining in the business of sale of lottery tickets by the Tribunal, is not permissible. In this view of the matter, we are rather satisfied that the question of law, as set out above, is a referable question of law, and, therefore, it is, we direct the Tribunal to state a case and refer the question of law as set out above. This tax case petition is thus disposed of.