- (1.) THE Income Tax Appellate Tribunal, New Delhi has referred the following three questions of law under Section 256(2) of the Income Tax Act,1961, hereinafter referred to as 'the Act', for opinion of this Court: (i) Whether die Hon'ble ITAT was legally justified in confirming the relief allowed by the learned Commissioner (Appeals) in respect of additions made by the assessing officer under Section 40A(5)? (ii) Whether the Hon'ble ITAT was legally justified in confirming the reliefs allowed by the learned Commissioner (Appeals) in respect of additions made by the assessing officer under Section 43B? (iii) Whether the Hon'ble ITAT was legally correct in confirming the directions of the learned Commissioner (Appeals) to the assessing officer not to charge interest under Section 216? The reference relates to the assessment year 1986 -87. Briefly stated facts giving rise to the present reference are as follows: The assessee, a limited company made following allowances to its managerial personnel:(a) Gratuity paid to legal he r of deceased employee (Managing Director) Rs. 75,000(b) Reimbursement of medical expenses paid to Managing Director Rs. 2,766(c) H.R.A. Paid to Managing Director Rs. 27,000 The assessing officer was of view that the above amount was hit by provision of Section 40A(5) of the Income Tax Act read with Section 40(c). He accordingly made appropriate disallowance under the above provision.
(2.) ON appeal, the assessee submitted the disallowance could not be made in view of following decisions: (a) D.S. Mistry v. Second ITO (1989) 44 Taxman 19 (Bom.); (b) CIT v. Ashoka Marketing Co. Ltd. : [1990]181ITR493(Cal) ; (c) CIT v. Indian Oxygen Ltd. (1978) 184 ITR 339 (Cal.). The learned Commissioner (Appeals) following the above decisions deleted the disallowance. On further appeal, the Appellate Tribunal agreed with Commissioner (Appeals). The assessing officer further found that following liabilities were outstanding and not paid by the assessee till the end of the previous year: (a) Purchase Tax Rs. 7,15,038(b) PF, GPF and administration charges Rs. 92,442(c) Electricity Charges Rs. 10,862 The assessing officer disallowed and added back above amounts by invoking provision of Section 43B of the Income Tax Act. On further appeal, the Commissioner (Appeals) deleted the disallowance with the reasoning given in para 19 of his order which is reproduced in the order of the Tribunal. The revenue being aggrieved brought the issue in appeal before the Appellate Tribunal. The Tribunal found that certain decisions of Hon'ble Patna High Court in the case of Jamshedpur Motor Accessories Stores v. Union of India : [1991]189ITR70(Patna) and Hon'ble Orissa High Court in the cast of CIT v. Pyarilal Kasam Manji & Co. : [1992]198ITR110(Orissa) have held that amendment introduced by Finance Act, 1987 to Section 43B was merely of clarificatory nature and applicable with retrospective effect with effect from 1 -4 -1984. The learned Commissioner (Appeals) had followed the view expressed by the Orissa, Calcutta and Patna High Courts. The Tribunal held that as there is no direct infirmity in the order of Commissioner (Appeals). The Tribunal accordingly confirmed his action.
(3.) THE assessing officer had charged interest under Section 216 of the Income Tax Act as assessee had paid first two instalments of advance tax at Rs. 10,84,700 each whereas in the third instalment the assessee paid Rs. 17,45,600. The assessee had first filed statement then an estimate under Section 209A(4) for the reasons given in paras 26 to 29 of his order held that no interest under Section 216 was chargeable. The revenue being aggrieved brought the issue in appeal before the appellate Tribunal.;