- (1.) The Income Tax Appellate Tribunal, Allahabad has referred the following two questions of law under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), for opinion to this Court: Whether, on the facts and circumstances of the case, the Hon'ble ITAT was justified in deleting the disallowance of Rs. 1,22,687 made by assessing officer as per provisions of Section 43 B read with Explanation 2 of the Income Tax Act, 1961 Whether first proviso to Section 43B, inserted Finance Act, 1987 with effect from 1-4-1988 has got a retrospective effect or not
(2.) The reference relates to year 1986-87.
(3.) Briefly stated the facts giving rise to the present reference are asfollows: In this case, the return of income for assessment year 1986-87 was filed on 29-8-1986 (sic). The assessment was completed under Section 143 (1) on 7-11-1986 on total income of Rs. 92,540. Subsequently, assessment was reframed under Section 143(3)/148 at Rs. 2,15.230 on 26-3-1989 adding a sum of Rs. 1,22,687 shown as outstanding sales-tax liability in the Balance Sheet for the year as per provision of Section 43B;