- (1.) ON an application under Section 256(2) of the Income-tax Act, 1961, this court has directed the Tribunal to refer the following question set out at page 2 of the paper book for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the order passed by the Commissioner of Income-tax under Section 263 of the Income-tax Act, 1961, is legal and valid and whether the Tribunal is justified in holding that the additional sum of Rs. 1,45,595 was not in the nature of bonus and in setting aside the order passed by the Commissioner of Income-tax under Section 263 of the Income-tax Act, 1961 ?"
(2.) IN compliance with our direction, the aforesaid question has been referred for our opinion. The assessee is a limited company. The relevant assessment year is 1981-82. The total income assessed in this year is Rs. 9,24,771. On a scrutiny of the assessment records, the Commissioner of Income-tax noticed that the Assessing Officer has allowed the claim of the assessee regarding the deduction of Rs. 1,45,595. In this regard, the provision of Section 36(1)(ii) of the Act, the amount relates to the customary bonus and he set aside the assessment order of the Assessing Officer with the direction to disallow the amount of Rs. 1,45,595 which has been paid as bonus to the assessee's employees/workers.
(3.) IN appeal before the Tribunal, the Tribunal has followed the decision of this court in the case of General Beopar Co. (P.) Ltd. v. CIT [1987] 167 ITR 86, and held that the Commissioner of INcome-tax has no jurisdiction to exercise his revisionary power under Section 263 of the Act. None appeared for the assessee. Heard learned counsel for the Revenue. Learned counsel for the Revenue fairly admits that the controversy is whether the ex gratia payment of bonus is a bonus under Section 34 read with Section 31A of the Payment of Bonus Act, 1965. Their Lordships held that the statutory bonus and customary bonus operate in two fields and do not clash with each other.;