JUDGMENT
B.R. Arora, J.
1. The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, at the instance of the Revenue, has referred the following question of law under Section 26(1) of the Gift-tax Act, 1958 :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the reopening of the assessment was illegal, invalid and, consequently, the cancellation of the reassessment ?”
2. The assessee, H.H. Maharaja Gaj Singh, is the ex-Ruler of the erstwhile Jodhpur State. He was assessed under the Gift-tax Act for the years 1971-72 and 1972-73. According to the Gift-tax Officer, certain gifts had escaped assessment and, therefore, he, after issuance of the notices to the assessee for both these assessment years, reopened the assessment and reassessed the assessee. The assessee, thereafter, filed an appeal before the Commissioner of Gift-tax (Appeals) which was partly allowed. The assessee thereafter preferred an appeal before the Income-tax Appellate Tribunal. The Revenue also filed cross-objections. The Income-tax Appellate Tribunal, by its judgment dated April 16, 1984, allowed the appeals of the assessee for both the assessment years and cancelled the reassessments. The cross-objections filed by the Revenue, which pertain to Rs. 12,000 for the assessment year 1972-73, were, however, dismissed as the Tribunal did not find any merit in the cross-objections. The Revenue thereafter filed an application under Section 256(1) of the Act before the Tribunal to refer nine questions of law mentioned in the application for the opinion of the High Court. The learned Members of the Tribunal referred the abovementioned question for the opinion of the High Court as, according to the Tribunal, it will cover questions Nos. 2, 3, 4 and 8 and questions Nos. 5, 6, 7 and 9 are based on the findings of fact and, therefore, the Tribunal declined to refer questions Nos. 2 to 9 and referred question No. 1 only.
3. It is contended by learned counsel for the Revenue that the Tribunal was not right in holding that the reopening of the assessment was illegal and invalid and committed an error in cancelling the assessment. The gifts made by the assessee escaped assessment as the assessee had sold several properties at prices lower than the market value and, therefore taxable gifts escaped assessment. Learned counsel for the assessee, on the other hand, has submitted that the correct value of the property was mentioned by the assessee and it was rightly assessed by the Gift-tax Officer
and no case for reopening of the assessment was made out. It is further contended by learned counsel for the assessee that it is not necessary to answer the question referred to the High Court because the findings arrived at by the Tribunal that the properties were not sold for inadequate consideration or below the market value, are findings of fact and the question relating to those findings, which was question No. 9 which was sought to be referred, was not referred by the Tribunal and, therefore, the answering of the question of law will be academic only and the courts are not expected to answer purely academic questions in their advisory jurisdiction.
4. We have considered the submissions made by learned counsel for the parties.
5. The Revenue, in its application for making the reference, requested the Tribunal to refer nine questions of law. Question No. 9, which was sought to be referred, was as under :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in a holding that the properties were not sold either for inadequate consideration or below the market value and thereby no deemed gifts can arise under Section 4 of the Gift-tax Act ?”
6. The Tribunal refused to refer this question for the opinion of the High Court as it was based on findings of fact. The Tribunal, in its judgment dated July 16, 1984, while considering the case of the “deemed gift” and whether the properties were sold for inadequate consideration or below the market value, observed as under :
“We have considered the rival contentions, On facts, we are of the opinion that the report of the Departmental Valuation Officer, which has been placed on such a high pedestal by the authorities below is not entitled to that respect because, though under the Wealth-tax Act it may be binding on the Wealth-tax Officer, it does not bind the Gift-tax Officer under the Gift-tax Act. Each valuation has to be considered on its own merits. The Departmental Valuation Officer has not considered the defects in the title of the assessee, particularly when at least one of the properties was not even recorded in the assessee’s name and the purchasers have not been able to get possession so that the matter is now in court. The assessee had dealings with third parties and in spite of all the arguments addressed on behalf of the Department, we are totally unable to hold that the assessee has charged even a penny more than he has shown in the sale deeds. The sales are to third parties and are at arm’s length. The assessee would necessarily charge the best price available. That would be
surely in his own interest. The properties, when they are in the possession of tenants, do not fetch a good price, which they would fetch if they were vacant. Similarly, a property to which the seller’s title is defective or doubtful cannot fetch a price which would be the normal market price which would be paid if the purchaser could get a title free from all doubts. All these matters have not been properly considered by the Departmental Valuer. ”
7. The Tribunal, in paragraph 41 of the judgment, finally observed as under :
“In our opinion, the sales being here for adequate consideration and there being no attempt at tax evasion, no question of assessment under Section 4(1)(a) of the Gift-tax Act for deemed gift can arise in respect of the sales effected in both the years. We also hold that they were not sold either for inadequate consideration or below the market value.”
8. In view of the findings given by the Tribunal that the sales effected in both these two years were not for inadequate consideration or below the market price and no question of assessment under Section 4(1)(a) of the Gift-tax Act of deemed gift can arise, that question, which was covered under question No. 9 has not been referred for the opinion of the High Court and as such the answering of the question will be purely academic. The correctness of the order, by which the Tribunal has chosen not to refer question No. 9 even though asked by the Revenue, has not been challenged by the Revenue by way of filing application under Section 256(2) of the Act. Question No. 9, which is, according to the Tribunal, a question of fact, was, therefore, closed by the Tribunal. In the absence of the reference of question No. 9, it is not necessary to answer the question referred for the opinion of the High Court because it will be purely academic to answer the same and the answer will not dispose of the real controversy in view of the findings of the Tribunal, mentioned above, and the refusal of the Tribunal to refer question No. 9. Under Section 260 of the Act, though the words used are that “the High Court or the Supreme Court upon hearing such case shall decide the question of law raised therein, and shall deliver its judgment thereon” but it does not mean that the High Court is bound to answer it or to give its decision where the question raised is purely of academic interest and does not resolve the real controversy. In such circumstances, where the question is purely academic or it is unnecessary or does not completely resolve the controversy, the High Court may refuse to answer such question. The answer in the present case to the question referred will not dispose of the real controversy in issue. We are, therefore, of the opinion that it will be futile and meaningless for the court to decide an academic question — the answer to which would not affect the position of the parties in view of the findings of the Tribunal given in paragraphs 40 and 41 of its judgment.
9. It has been held by the Supreme Court in the case of CIT v. Smt. Anusuya Devi [1968] 68 ITR 750 that “the High Court is, however, not bound to answer the question merely because it is raised. It is well-settled that the High Court may decline to answer a question of fact or a question of law which is purely academic, or has no bearing on the dispute between the parties or though referred by the Tribunal does not arise out of its order; The High Court may also decline to answer a question arising out of the order of the Tribunal, if it is unnecessary or irrelevant or is not calculated to dispose of the real issue between the taxpayer and the Department”.
10. We are, therefore, of the opinion that it is not mandatory for the High Court, when once a reference is made, that the High Court must proceed to answer the question stated in the reference and to decide it though the question may be purely academic in nature and unnecessary to decide. In view of the findings arrived at by the Tribunal, which have not been challenged, the answer will not change the result of the case.
11. For the reasons stated above, we are of the opinion that it is not necessary to answer the question referred by the Tribunal because the answer to the question will be purely academic and it will be an exercise in futility to answer the question and remit the case back to the Tribunal. We, therefore, decline to answer the question referred by the Tribunal,
12. Consequently, the reference is returned unanswered.