Commissioner of Income Tax vs Balsara Hygiene Products

S.K. Desai, J.—The question which is sought 10 be raised in this application u/s 256(2) of the income tax Act, 1961 (''the Act''), is set out in paragraph 6 of the same. The question refers to commission of Rs. 3,03,410 paid by the assessee to Balsara & Co. (P.) Ltd. The payment was made in pursuance of clause 7 of two agreements, dated 1-4-1976 and 1-4-1977, respectively. According to paragraph 6 of the application, Exhibit ''D'' is a copy of the reference application which the Commissioner had made to the Tribunal for making a reference u/s 256(1). If Exhibit ''D'' is perused, it is found that the question, in respect of which the reference was sought, reads as under:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that expenditure of Rs. 25,000 paid by the assessee to RSSPI was an allowable revenue expenditure ?"

We may observe that the number of the reference application is not mentioned in Exhibit ''D'' and to that extent the income tax application suffers from an objection which has not been removed presumably because the officer scrutinising the application failed to note the above lacuna.

However, the fact that according to the applicant, the reference was sought from the Tribunal in respect of one question (as mentioned in Exhibit ''D''), whereas the High Court is required to compel the Tribunal to make reference for a totally different question (as stated in para 6). If the questions are so different and indeed they are, the application to the High Court u/s 256(2) must be held to be incompetent. It may be that there was another reference application, since the order of the Tribunal rejecting the reference, refers to Application Nos. 423 and 424 of 1984. We are, however, speculating and can only speculate as to whether there was any other reference application and if so, what it was? In any case, going by the annexures enclosed by the applicant to the income tax application, the application must be rejected. Order accordingly. Mr. Jetly on behalf of the Commissioner applied for adjournment. We have found that the appellate order of the Tribunal is one passed in December 1982. The reference application was rejected by the Tribunal in October 1983. To allow the Commissioner today to put the house in order might mean postponing the hearing of this application to the next session, which ought not to be permitted. The Commissioner obviously is not at all serious about this application. In any case, the point involved pertains to a specific agreement and no general question of importance involving the interpretation or application of income tax law is involved. Accordingly, we rejected the application for adjournment and have disposed of the application, rejecting the same for reasons already recorded.