S.K.MAL LODHA, J. - (1.) THESE three applications under S. 256(2) of the INCOME TAX ACT, 1961 (No. XLIII of 1961), which have been registered as D.B. Civil IT Cases Nos. 55, 56 and 109 of 1981, relate to the asst. yrs. 1973 -74, 1972 -73 and 1971 -72, respectively. As all the three applications have arisen in identical circumstances and the assessee is the same, we consider it proper to dispose of them by a common order. We shall notice the facts giving rise to D. B. Civil IT Case No. 55 of 1981.
(2.) THE petitioner -assessee is a partnership firm, having its office at Jodhpur and carries on business in automobiles and automobile parts. The assessee, in each of the assessment years, allowed to its employee, Gopal Das, who was working as salesman of the firm, a commission of 5 per cent on sales of automobile accessories and parts in lieu of remuneration for his services in addition to a salary of Rs. 250 per month. The commission was paid in accordance with the agreement dated November 11, 1969, between the said Gopal Das and the assessee. In the returns filed in respect of the assessment years under consideration, the assessee claimed the amount of commission paid to the said Gopal Das as business expenditure deductible from its gross income under S. 36(1)(ii) of the Act. The ITO, Special Ward, Jodhpur, disallowed the amount of commission claimed as business expenditure. On appeal by the assessee, the AAC, Jodhpur Range, Jodhpur, accepted the appeal and deleted the disallowance of the amount of commission paid by the assessee to the said Gopal Das. It was held by the AAC that the payment of commission was a genuine payment for the business of the assessee and was thus an allowable business expenditure. The ITO filed a further appeal before the Tribunal, Jaipur Bench, Jaipur (" the Tribunal " herein). The Tribunal set aside the order of the AAC and held that the amount of commission paid to Gopal Das was not an allowable business expenditure. In this connection, reliance was placed on Shazada Nand & Sons vs. CIT (1973) 90 ITR 91 (P & H). Thereafter, the ITO initiated penalty proceedings against the assessee in respect of the amount paid by the assessee to the said Gopal Das, which was disallowed as business expenditure by the Tribunal, and referred the matter to the IAC, Jodhpur, for passing an appropriate order under S. 271(1)(c) of the Act. The IAC, on transfer of the penalty proceedings to him, imposed a penalty on the assessee under S. 271(1)(c)(iii) of the Act. He was of the opinion that it was an ex gratia payment made by the assessee to the said Gopal Das. Thus, by claiming the commission paid to an employee by the assessee as an allowable business expenditure, the assessee concealed particulars of its income. The assessee filed an appeal before the Tribunal against the order imposing penalty. The Tribunal dismissed the appeal and maintained the penalty imposed by the IAC. A reference application under S. 256(1) of the Act was filed by the assessee requesting it to state the case and to refer the following questions of law arising out of its appellate order ot this Court for its opinion : "1. Whether, on the facts and in the circumstances of the case, the findings of the Hon'ble Tribunal that the assessee was guilty of any fraud or gross or wilful neglect in returning the income after deducting the cimmission payments made to Shri Gopal Das is contrary to the weight of the record and was arrived at without considering the entire evidence and material on record ? 2. Whether, on the facts and in the circumstances of the case and in view of the provisions contained in S. 271(1)(c) of the INCOME TAX ACT, 1961, and the Explanation thereto, the Hon'ble Tribunal was right in law in sustaining the penalty imposed on the assessee ? 3. Whether, on the facts and in the circumstances of the case and in view of the provisions contained in S. 271(1)(c) S. 274(2) and its amendment w.e.f. 1st April 1976, the Hon'ble Tribunal was right in law in rejecting the assessee's contention that the learned IAC had no jurisdiction to impose penalty upon the appellant ? 4. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in holding that there is positive evidence on record to show that the assessee furnished inaccurate particulars of its income and the expenses claimed by the assessee are also bogus and whether such findings are contrary to the weight of the record and have material on record ? 5. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal is justified in sustaining the penalty and the alleged charges of furnishing inaccurate particulars of its income, although the learned IAC had imposed penalty by holding that the assessee had concealed particulars of income ?"
(3.) THE facts in the other two Reference Applications Nos. 56 and 109 of 1981 under S. 256(2) of the Act are almost identical and it is not necessary to state them in detail. The assessee had filed these applications under S. 256(2) of the Act as the Tribunal has dismissed the application under s. 256(1) of the Act holding that no question of law arises out of its appellate order.;