- (1.) THIS application is under Section 256(2) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax, Jaipur. The applicant requires this court to direct the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, to refer the following questions said to be questions of law arising out of the Tribunal's order dated January 13, 1988, in Income-tax Appeal No. 949/JP of 1985 and Cross-objection No. 1/JP of 1986 for the assessment year 1982-83. "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in entertaining the additional grounds of appeal ?
(2.) WHETHER, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee-Corporation is constituted for carrying out the activities as laid down in Section 10(20A) of the Income-tax Act, 1961 ? Whether, on the facts and in the circumstances of the case, the Tribunal was right in not reversing the Commissioner of Income-tax (Appeals) finding that the income from the assessee's income from business ?" 2. The respondent is the Rajasthan Land Development Corporation which is constituted under the Rajasthan Land Development Corporation Act, 1975. The respondent-assessee claimed exemption of its income from being subjected to tax under Section 10(20A) of the Act claiming that it is a Corporation established under a statute under the competent legislative action for the purpose of dealing with the planning, development and improvement of villages in Rajasthan. 3. This contention was not raised before the Assessing Officer. The assessment has taken place subjecting the income of the respondent to tax. The Assessing Officer computed net loss under the head "Profit and gains from business" and has also assessed interest income and other miscellaneous receipts as income from other sources making the net taxable income at Rs. 5,68,666. The Commissioner of Income-tax (Appeals) in Appeal No. 15/85-86 held that the loans and advances were given to the cultivators in Rajasthan Canal Project area and Chambal Project area for development of agricultural land. He also upheld the contention of the assessee regarding holding the income from interest as an income from business and not from other sources. However, the assessment of income on the merits was not interfered with and the appeal was partly allowed. Before the Tribunal the assessee pointed out that since the Corporation is established under a statute and has been established for the purpose of rural development its entire income is exempted under Section 10(20A) of the Act. The Tribunal entertained this plea and examining the scheme of the Act of 1975 accepted the contention of the assessee and set aside the assessment. The application under Section 256(1) of the Revenue for making reference of the aforesaid questions to this court was rejected by the Tribunal vide its order dated August 26, 1988, by holding that since it has been held by the Rajasthan High Court in Chand Behari Lal v. State of Rajasthan in SBCWP No. 6 of 1980 decided on March 14, 1980, that the Rajasthan Land Development Corporation is a Corporation established by a- statute to improve the land for facilitating better cultivation with proper irrigation facilities, roads, water channels, levelling of the area and making the fields regular, where they are irregular areas and by referring to the preamble of the Act of 1975 held that the respondent is a Corporation which falls within the scheme of Section 10(20A) of the Act to claim exemption from income-tax in respect of its income. It is a finding of fact and is founded on a decision rendered by the jurisdictional High Court therefore no question arises from the Tribunal's order.
(3.) IN the aforesaid circumstances, this application under Section 256(2) has been made by the Revenue on the ground that the order of the Tribunal rejecting the application under Section 256(1) is erroneous. It was urged by learned counsel for the applicant that the questions raised in the present application involve questions relating to the ambit and scope of the Tribunal's powers to entertain additional plea and interpretation of statute ; it cannot be said that such questions are not questions of law. The questions stated in the application do arise from the appellate order of the Tribunal. Having heard learned counsel for the applicant, we are of the opinion that in the facts and circumstances of the present case, the Tribunal has not committed any error in rejecting the application for making a reference to this court on the aforesaid questions. ;