THANIKKACHALAM, J. :
In this tax case petition the Department requests this Court to direct the Tribunal to refer the following question of law said to arise out of the order of the Tribunal for the opinion of this Court under s. 256(2) of the IT Act, 1961 :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to exemption under s. 11 of the IT Act in view of the amended provisions of s. 13(1)(d) of the Act extending the time limit upto 31st March, 1993 for converting the deposits into permissible mode of investments even though the non-specified assets had not been acquired during the previous year ?'
2. Before the Tribunal the question was whether the assessee is entitled to exemption under s. 10(22) of the IT Act, 1961. The Tribunal following the decision of this Court in the case of CIT vs. Aditanar Educational Institution (1975) 118 ITR 235 held that the assessee is entitled to exemption under s. 10(22) of the IT Act, 1961. Aggrieved by this order, the Department filed a reference application under s. 256(1) of the Act, wherein the Department framed another question which is as under :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to exemption under s. 11 of the Act extending the time limit upto 31st March, 1993 for converting the deposits into permissible mode of investment even though the non-specified assets had not been acquired during the previous year ?'
While considering the reference application filed by the Department, the Tribunal pointed out that the real question that arose for consideration out of the order of the Tribunal was whether the assessee is entitled to exemption under s. 10(22) of the Act. However, the Department pointed out before the Tribunal that the real question that came up for consideration before the Tribunal was whether the assessee is entitled to exemption under s. 11 of the Act in view of the amended provisions of s. 13(1)(d) of the Act. Even in the statement of facts drawn by the Department in the reference application, it went on saying that the Tribunal was not correct in granting exemption to the assessee under s. 11 of the IT Act in view of the amended provisions of s. 13(1)(d) of the Act.
3. In a petition filed under s. 256(2) of the IT Act before this Court also, a similar question as raised before the Tribunal was raised along with a statement of facts stating that the Tribunal was not correct in granting exemption under s. 10(22) of the Act. It was also requested in the statement to reframe the question, since the question framed and suggested by the Department does not reflect the true controversy that arises between the assessee and the Department.
4. The learned standing counsel appearing for the Department submitted that due to inadvertence the question was framed mistakenly and which does not reflect the true controversy that arose between the assessee and the Department. This Court according to the learned standing counsel has got ample jurisdiction to reframe the question so as to reflect the true controversy that arises between the contesting parties. However, the learned counsel appearing for the assessee submitted that the question as framed and suggested by the Department does not arise out of the order of the Tribunal and therefore the tax case petition is liable to be dismissed in limine. It was further submitted that this Court can reframe any question only within the framework of the question suggested by any one of the parties. If the reframing of the question is not possible within the framework of the question suggested by the parties, it would not be possible for this Court to frame altogether a new question.
5. In Law of Income-tax by Sampath Iyengar Eighth, Edn., Vol. 5 p. 5581, the pre-conditions for a reference are stated, in the following manner :
There are three pre-conditions for a reference :
1. There must be an order under s. 254 (of the Tribunal).
2. A question of law should arise therefrom, and
3. That question of law should have been raised before, and decided by the Tribunal. The preconditions have been specifically enacted to ensure that the High Courts are not flooded with such applications. They should be strictly complied with before the High Court will entertain any question under the Section.
When these three ingredients co-exist, a reference to the High Court is permissible.
6. In the case of CIT vs. Modipon Ltd. (1995) 212 ITR 656 while considering the reframing of the question the Delhi High Court held that :
'We cannot also accept the suggestion of counsel for the Revenue that the question may be reframed because, it is beyond the jurisdiction of this Court in these proceedings to alter the basic frame of the question'.
7. In the case of CIT vs . Union Bank of India : [1990]186ITR129(Bom) the Bombay High Court while considering the reframing of the question held that :
'While the High Court had power to reframe questions to bring out the real controversy between the parties, the question to be reframed must be a question which is sought to be raised by the party. The manner in which the Department suggested reframing of the question meant the framing of an altogether new question which could not be raised by the High Court under s. 256(2) of the Act'.
8. In the case of CIT vs. Shadi Lal Puri (1995) 214 ITR 552 while considering the provisions of s. 256 of the IT Act, 1961 the Punjab & Haryana High Court held that :
'For exercise of the powers under s. 256 of the IT Act, 1961, it is required that a question of law should arise from the order passed by the Tribunal and that such question of law has not been decided earlier either by the jurisdictional High Court or the Apex Court. It is also a condition precedent that such a question of law should have been raised before the Tribunal by the party seeking reference to the High Court.'
9. However, the learned standing counsel appearing for the Department relied upon a decision of Jammu & Kashmir High Court reported in the case of Shiv Parkash vs . CIT In that case it was held that :
'The powers of the High Court under s. 256 of the IT Act, 1961, for directing a reference to be made to the Court, are not confined only to the form of the question as raised before the Tribunal. The Court can also direct the Tribunal to refer such other question which was debated before the Tribunal and which arises out of the appellate order provided, of course, it is a question of law. The Court can even reframe the question of law so as to bring out the real nature of the controversy'.
10. In the present case the question that came up for consideration before the Tribunal was whether the assessee is entitled to exemption under s. 10(22) of the Act. The Tribunal held following an earlier decision of this Court in the case of Aditanar Educational Institution (supra) that the assessee is entitled to exemption under s. 10(22) of the Act. But, while framing the question in the reference application, the Department stated that the Tribunal was not correct in granting exemption under s. 11 of the Act as per the amended provisions of s. 13(1)(d) of the Act, In fact, the Tribunal has not dealt with the question relating to exemption under s. 11 r/w s. 13(1)(d) of the Act. Even in the statement of facts submitted before the Tribunal in the reference application, the Department has stated that the Tribunal decided a question relating to exemption under s. 11 r/w s. 13(1)(d) of the Act. In the course of the hearing of the reference application, the Tribunal pointed out that the real question is with regard to exemption under s. 10(22) of the Act.
11. Even before this Court in a petition filed under s. 256(2) of the Act in the question framed it is stated that the real controversy is with regard to the exemption granted by the Tribunal under s. 11 r/w s. 13(1)(d) of the Act. However, in the statement of facts the Department, after realising the mistake, requested this Court to reframe the question so as to reflect the true controversy that arises between the parties. The Tribunal has not decided whether the assessee is entitled to exemption under s. 11 r/w s. 13(1)(d) of the IT Act, 1961. The Tribunal decided the question whether the assessee is entitled to relief under s. 10(22) of the Act. As against the question framed and suggested before this Court, it is not possible to frame altogether a question which is extraneous to the order of the Tribunal. If the question framed by the parties does not reflect the real controversy that arises out of the order of the Tribunal, it is not possible to frame or reframe a question as suggested by the Department, since that would go beyond the jurisdiction of this Court. This was the view expressed by the Supreme Court and various High Courts cited supra.
12. In view of the foregoing reasons we are unable to accede to the request made by the learned standing counsel appearing for the Department to reframe the question. In the result, the tax case petition is rejected, since the question suggested by the Department does not arise out of the order of the Tribunal.