Decided on October 23,1982



K.B. Menon, Judicial Member - (1.) THIS appeal by the assessee relates to the assessment year 1973-74, for which the relevant previous year ended on 31-3-1973.
(2.) The only ground taken in the appeal is that the AAC erred in holding that a sum of Rs. 56,500 received by the assessee by way of reward from Customs Department is taxable. The assessee received a sum of Rs. 22,500 on 20-7-1972 and Rs. 34,000 on 30-6-1972, totalling Rs. 56,500, as reward from customs authorities. The assessee claimed that the amounts are exempt from tax under Section 10(17B) of the Income-tax Act, 1961 ('the Act'). Under the same, any payment made, whether in cash or in kind, as a reward by the Central Government or any State Government for such purposes as may be approved by the Central Government in this behalf in the public interest shall be exempt from tax. This provision was inserted by the Direct Taxes (Amendment) Act, 1974, but with retrospective effect from 1-4-1973. It cannot, therefore, be disputed that the provision would be available for the assessment year 1973-74. But the assessee in the present case cannot claim exemption merely because the provision is on the statute book. He can claime exemption only when the awards are approved by the Central Government as provided in the sub-section. The order in this behalf was issued by the Central Government only on 19-9-1975. It was stated in the order that the Central Government approves for the purpose of Clause (17B) of Section 10, the grant of awards in cash bytheCentral Government to persons who furnish to the Income-tax Department or the Central Excise and Customs Department information of tax evasion. The assessee now claims that this order approving the rewards granted by the Customs Department for the purpose of exemption will operate with effect from 1-4-1973 and that the assessee is, therefore, entitled to claim exemption. This contention was negatived both by the ITO and the AAC for the reason that the order takes effect only from 10-9-1975, the date on which it was issued. The assessee has, therefore, come up in appeal.
(3.) IT was contended by the learned counsel for the assessee that Clause (17B) of Section 10, though introduced by the Direct Taxes (Amendment) Act, 1974, was given retrospective effect from 1-4-1973, that this discloses an intention on the part of the Government to grant exemptions with effect from the assessment year commencing on 1-4-1973, that the fact that the order approving the rewards granted by the Customs Department was issued only on 19-9-1975 is immaterial and that the order will also have retrospective effect with effect from 1-4-1973.;

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