Commissioner of Income Tax vs Ratilal Popatlal Shah

Desai, J.—It would appear in this matter that the assessee had addressed a latter to the Prothonotary & Senior Master on 1-10-1983, that the assessee is unable to appear in the matter. Original letter sent to the Prothonotary does not appear to have been received by him but we have been shown a copy of the same received by the department from the concerned Income Tax Officer. Under the circumstances we may proceed in the absence of the assessee as it would appear that the question referred to us will have to be answered in the assessee''s favour.

The question referred to us by the Tribunal, Poona Bench, Poona is as under :

"Whether, on the facts and in the circumstances of the case, the sum of Rs. 2,806 being the collections made by the assessee on account of ''charity'' through sale bills was liable to be assessed as income of the assessee liable to tax ?"

The ITO in his assessment order for the asst. yr. 1970-71 added an amount of Rs. 2,806 which was described as ''charity account'' (Laga) Aggrieved by this addition the assessee carried the matter before the AAC, Kolhapur Bench, who accepted the contention of the assessee in view of the decision of the Allahabad High Court in the case of Bijli Cotton Mills Ltd. Vs. Commissioner of Income Tax, . The Officer carried the matter to the Tribunal but the Tribunal upheld the AAC''s decision.

On behalf of the Commissioner Mr. Joshi has drawn our attention to the decision of this High Court in Commissioner of Income Tax, Pune Vs. E.H. Kathawala and Company, We had noted in the said decision that the Allahabad decision had been subsequently confirmed by the Supreme Court in CIT (Central), Commissioner of Income Tax (Central), New Delhi Vs. Bijli Cotton Mills (P.) Ltd., .

The question referred to us may be answered in accordance with our earlier decision without further elaboration. In the present matter also the ITO has made a bald order without making necessary enquiries of the nature indicated in our decision in Kathawala''s case (supra). Such addition was obviously not permissible. Accordingly, we answer the question referred to us in the negative and in favor of the assessee. Parties to bear their own costs of the reference.