Commissioner of Income Tax vs Subhash Chand Chudhary

G.S. Singhvi, J.

This is a petition by the revenue u/s 256(2) of the Income Tax Act, 1961 (hereinafter referred to as, ''the Act'') for directing Income Tax Appellate Tribunal, Delhi Bench ''A'', New Delhi (hereinafter referred to as, ''the Tribunal'') to refer the following question of law for the opinion of this Court:

"Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the adjustment made in respect of incentive bonus on the basis of documents accompanying the return was outside the scope of section 143(1)(a) of the Income Tax Act, 1961 and should have been made only after issue of notice u/s 143(2) ?"

The respondent-assessee, who was employed as Development Officer in Oriental Insurance Company and was posted at Narnaul, received a sum of Rs. 46,045 as incentive bonus. He reflected the same in the return of income filed for the assessment year 1994-95 and also claimed deduction of 40%. After issuing notice u/s 143(1)(a) of the Act, the assessing officer disallowed the deduction claimed by the assessee. The appeal filed by the assessee was allowed by Deputy CIT(A), Faridabad. He referred to the circular issued by the Central Board of Direct Taxes vide letter No. 689, dated 24-8-1994 and observed that the provisions of section 143(1)(a) of the Act could not have been invoked by the assessing officer for disallowing the deduction.

Feeling aggrieved by the appellate order, the revenue filed an appeal before the Tribunal which was dismissed on 5-8-1997 with the observation that the point at issue is not only covered by CBDT circular but also concluded by the judgments in Kamal Textiles and Others Vs. Income Tax Officer and Others, , S.R.F. Charitable Trust v. Union of India (1992) 193 ITR 95 and Khatau Junkar Ltd. and another Vs. K.S. Pathania and another, .

We have heard Shri Rajesh Bindal and perused the record. In Commissioner of Income Tax Vs. Saurabh Kulshreshtha, this Court considered a similar issue and held that the question sought by the revenue cannot be treated as a question of law requiring determination by this Court. The facts of that case were that while he was working as Development Officer in the Life Insurance Corporation of India, the assessee filed return declaring an income of Rs. 54,710. During the relevant year, he had received incentive bonus amounting to Rs. 46,012 out of which he claimed deduction at 40% as expenses. The assessing officer invoked section 143(1)(a) of the Act and disallowed the deduction. Deputy CIT(A), Faridabad upheld the claim of deduction made by the assessee. The appellate order was confirmed by the Tribunal. This court held that section 143(1)(a) of the Act could not have been invoked by the assessing officer because divergent views had been expressed by various High Courts and Benches of the Tribunal in regard to the assessee''s claim for deductions.

In view of the aforementioned judgment, we hold that no referable question of law arises in this petition which is liable to be dismissed. Ordered accordingly.