Commissioner of Income Tax vs Pepsu Road Transport Corporation

Petition u/s 256(2) of the Income Tax Act, 1961, praying that this High Court be pleased to direct the Income Tax Appellate Tribunal to refer to this court the following question of law which arises out of the Tribunal''s order dated October 7, 1991.

"The contributory provident fund of the assessee was recognised with effect from April 30, 1984. As such this fund was not recognised for the assessment year 1977-78. Therefore, the question of law arises whether on the facts and circumstances of the case, the Appellate Tribunal is right in law in directing the Assessing Officer to allow deduction in lieu of payments actually made under the head of this expenditure to the employees which direction is contrary to the provisions of Section 36(1)(iv) of the Income Tax Act, 1961."

No one has appeared for the respondent despite service which shows that they are not serious in contesting the claim of the petitioner seeking reference of the question of law raised in the application filed under subsection (2) of Section 256 of the Income Tax Act, 1961.

We have heard learned counsel for the petitioner who has taken us through the order of assessment passed by the assessing authority as also the order of the Commissioner of Income Tax. The prayer of the Revenue for making a reference was declined mainly on the ground that the question sought to be referred to this court now was allegedly not raised before the Commissioner of Income Tax. It may not be out of place to mention that despite the order of assessment, the respondent-appellant had not sought judgment on the point now sought to be referred even though its determination was necessary for the purposes of adjudicating the plea raised by the assessee. As the appeal had not been filed by the Revenue, there was no question of its being specifically raised at the time of filing of the appeal. After going through the provisions of Section 36(l)(iv) of the Income Tax Act, we are of the opinion that the point sought to be referred is a question of law requiring reference to this court for opinion.

Accordingly, the petition is accepted with a direction to the Income Tax Appellate Tribunal to make a reference, to this court, of the question of law raised by the Revenue in the application filed before it under subsection (1) of Section 256 of the Income Tax Act.