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Civil Petition for Special Leave to Appeal No. 179 of 1968, decided on 17th October 1968.

(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 16th January 1968, in Civil Miscellaneous No. 3159 of 1967).

Ss. 66 (2) & 26‑Income‑tax Officer refusing registration under S. 26 holding that partnership deed produced was a made up document‑Instrument whether genuine, a finding of fact if finding based upon evidence‑Income tax Appellate Tribunal and High Court, in circumstance, held justified in holding that no question of law involved.

Dr. Sardar Bahadur Sir Sunder Singh Majithia v. Commis sioner of Income‑tax, United and Central Provinces A I R 1942 P C 57 ref.

Muhammad Amin Butt, Advocate Supreme Court instructed by Maqbool Ahmad Rana, Attorney for Petitioner.

Iftikharuddin Ahmad, Attorney on record (absent) for Respondent.

Date of hearing : 17th October 1968.

This is a petition for special leave to appeal from the judgment and order of a Division Bench of the High Court of West Pakistan, refusing to direct the Income‑tax Tribunal to state a case for the opinion of the High Court, under section 66 (2) of the Income‑tax Act.

The petitioner‑firm, claiming that it was a partnership firm, consisting of one Shah Nawaz Khan and two of his sisters Mst. Alam Khatoon and Mst. Khadija Bibi applied for the registration of the firm under section 26 of the Income‑tax Act. It was claimed by the firm that the three partners had invested Rs. 10,000, Rs. 8.000 and Rs. 8,000 respectively, but Shah Nawaz Khan had a half share in the business and the two ladies had a one fourth share each.

It transpired in evidence that neither the partnership deed was registered nor was the firm registered with the Registrar of Firms. Again the only evidence adduced as to the source of the investment was that the ladies had inherited some 47 acres of land each from their father some 8 years ago. Jamabandis were produced to support this but no books of accounts were shown nor was any other evidence led to indicate as to what was the average annual yield of these lands or the surplus income which accrued there from to the said ladies.

As against this it transpired that Shah Nawaz Khan was also a 5 arenas shareholder in the firm Messrs Muhammad Azam Khan & Sons, Multan and that the petitioner‑firm was using the premises of the said firm as also its telephone, for trans acting its business which consisted almost entirely of purchases of wool made from the firm Messrs Muhammad Azam Khan & Sons.

Upon this evidence the Income‑tax Officer came to the conclusion that the firm was not a genuine firm, that the deed of partnership produced was a made up document and that it exhibited no proper contractual transaction. The application was, accordingly, rejected. This order was upheld in appeal by the Appellate Assistant Commissioner as also in second appeal by the Income‑tax Appellate Tribunal. The latter also rejected an application under section 66(1) of the Income‑tax Act for referring certain questions, formulated by the assessee, to the High Court on the ground that the questions involved facts and not law. '

The assessee then came to the High Court under section 66(2) of the Income‑tax Act. The High Court also dismissed the petition holding that the questions raised were patently questions of fact, and hence no direction of the nature sought could be made.

The assessee now seeks special leave to appeal and it has been strenuously contended on his behalf that the questions framed by him did raise a substantial question of law, namely, as to whether there was any evidence upon which the decision of the Income‑tax Officer could be based. In support of this contention reliance was placed on the decision of Privy Council in the case of Dr. Sardar Bahadur Sir Sunder Singh Majithia v. Commissioner of Income‑tax, United and Central Provinces (AIR 1942 P C 57).

In that case the Judicial Committee had itself pointed out that the decision that an instrument is not genuine is a finding of fact, if such a finding is based upon evidence. In the present case it will be patent from what we have already stated that there were sufficient facts upon which the decision of the Income tax authorities could be based and, therefore, their decision was clearly a decision on a question of fact and no question of law a all arose.

This petition is, in our opinion, without any substance and is, accordingly, dismissed.

Appeal dismissed.

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