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  • Mukerji
  • Niamatullah, JJ.
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  • Mukerji
  • Niamatullah, JJ.
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Smart Summary

Opinion Summary — Mukerji, J.

Factual and Procedural Background

The matter arose from an income-tax case decided by this Court on 9 July 1929 in which the Court awarded costs to the assessee. The assessee had deposited Rs. 100 as a fee for a reference under Sub-Section (2), Section 66 of the Income-tax Act. When the High Court office prepared the memorandum of costs, it omitted to include that Rs. 100 fee. The applicant (the assessee) applied to have that sum included in the memorandum of costs.

Legal Issues Presented

  1. Whether the Rs. 100 fee deposited for a reference under Sub-Section (2), Section 66 of the Income-tax Act is part of the costs awarded to the successful assessee and therefore should be included in the memorandum of costs.
  2. Whether the applicant's request to include the Rs. 100 fee effectively amounts to an impermissible review of the Court's judgment.
  3. Whether the High Court may deal with inclusion of the reference fee in the costs and whether the delay (belatedness) in making the application bars relief.

Arguments of the Parties

Applicant

  • The applicant requested that the memorandum of costs be amended to include the Rs. 100 deposited as fee for the reference under Sub-Section (2), Section 66 of the Income-tax Act.

Opposition (Mr. Verma / Income-tax Department)

  • The application effectively sought a review of the Court's judgment.
  • The High Court could not properly deal with the fee paid for the reference.
  • The application to amend the memorandum of costs was belated.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Radhey Lal Balmukand(1) That the fee paid for making the reference is part of the costs in the reference. The Court relied on this decision to conclude that the Rs. 100 fee must be deemed included in its prior award of all costs and therefore should be added to the memorandum of costs.

Court's Reasoning and Analysis

The Court considered and rejected each of the three objections raised by Mr. Verma:

  1. On whether the application sought a review: the Court held it was not a review. The original order awarded "all the costs without any exception"; consequently, if the reference fee is properly regarded as part of those costs (as held in Radhey Lal Balmukand), it must be taken to have been included in the original order. The present application merely seeks to correct the omission in the memorandum of costs.
  2. On whether the High Court could deal with the reference fee: the Court found this objection unsound. The Court reasoned that when an assessee succeeds in a reference against a departmental decision, there is no justification for the department to retain the Rs. 100 fee; it is "undoubtedly a part of the costs of the reference" and "therefore must go as such."
  3. On delay (belatedness): the Court acknowledged the delay as "somewhat strong" but observed that because the Court had awarded "all the costs to the assessee" there was no reason to penalize the assessee by withholding the Rs. 100 merely because the omission was discovered late. As a consequence, however, the Court exercised its discretion not to award costs to the applicant for bringing the present application.

Holding and Implications

Application allowed. The Court directed that the memorandum of costs prepared in the Court be amended by the addition of the Rs. 100 fee deposited by the assessee for the reference.

Consequences:

  • The Rs. 100 reference fee is to be included in the memorandum of costs and paid to the assessee as part of the costs previously awarded.
  • The applicant was not awarded any costs for the present application (despite the income-tax department opposing it unsuccessfully).
  • The opinion applies the principle from Radhey Lal Balmukand to the facts; it does not purport to set a new broader precedent beyond applying that principle to correct the omission in the costs memorandum.
K.S
Show full summary ...

    Lachhman Das Babu Ram v. Commissioner Of Income-Tax

    Mukerji, J.:— This is a very short matter and is concluded by a decision of this Court in Radhey Lal Balmukand(1). In an income-tax matter decided on 9th July 1929, this Court awarded to the assessee his costs against the opposite party. The costs would naturally include the amount of Rs. 100 deposited as fee for a reference under Sub-Section (2), Section 66 of the Income-tax Act, The High Court office in preparing the memorandum of costs omitted to include this sum. The applicant now asks that this sum should be included.

    2. Mr. Verma has argued three points against the application. One is that this virtually asks us to review our judgment. Secondly, it is not open to the High Court to deal with the fee paid for reference, and thirdly, that the application is a belated one. On the first point we do not think that it is an application for review of judgment. When we awarded costs to the assessee we awarded all the costs without any exception, and if, as was rightly held in the case quoted above, the fee paid for making the reference be a part of the costs in the reference, it must be deemed to have been included in our order.

    3. The second point of Mr. Verma is also not sound. When an assessee has to make a reference against a certain wrong decision of the income-tax department and he succeeds, there is no reason why the department should keep the sum of Rs. 100 in its pocket. It is undoubtedly a part of the costs of the reference and therefore must go as such. The third point no doubt is somewhat strong. But as the Court did award all the costs to the assessee, we do not see any reason to fine the assessee the sum of Rs. 100 because of the delay in discovering the fact thar the sum should have been included in the memorandum of costs. We however do this, that we shall not allow the applicant any costs for the present application, although it is opposed by the income-tax department and unsuccessfully.

    4. We direct that the memorandum of costs prepared in this Court be amended by addition of the fee of Rs. 100 deposited by the assessee for the reference.

    K.S

    5. Application allowed.

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    Comments

    Lachhman Das Babu Ram v. Commissioner Of Income-Tax
    (Mar 29, 1933)