Commissioner of Income Tax, Rohtak vs K.L Saluja

G.S. Singhvi, J.

The Income Tax Appellate Tribunal, Delhi Bench ''A'', New Delhi (hereinafter referred to as ''the Tribunal'') has referred the following question of law for the opinion of this Court:

"Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was right in law in holding that the assessing officer was not justified in invoking the provisions of section 154 for adding the unpaid sales-tax liability outstanding as on the close of accounting year in exercise of powers u/s 43B of the Income Tax Act, 1961?"

For the assessment year 1984-85, the assessee filed return on 30-7-1984 declaring an income of Rs. 22,300. The assessment was completed on 26-8-1987 at an income of Rs. 32,300. After some time, the assessing officer issued notice u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as ''the Act) proposing to disallow the deduction of Rs. 5,935 representing unpaid sales tax liability u/s 43B of the Act. The assessee filed reply to contest the notice. By an order dated 26-8-1987, the assessing officer confirmed the proposed disallowance. The Appellate Assistant Commissioner (hereinafter described as''the Appellate Authority'') allowed the appeal filed by the assessee and held that action u/s 154 of the Act could not have been taken because the issue was debatable. The relevant extract of order dated 28-7-1988 passed by the Appellate Authority reads as under: ,

"From cases relied upon by the appellant it is seen that in such circumstances when the payment had not actually fallen due to different views have been taken by different judicial authorities. Therefore, the issue involved in debatable point of law on which more than one view are possible. In this view of the matter, I am of the opinion that the Income Tax Officer would not have carried out rectification u/s 155. The action of the Income Tax Officer is not justified."

The Tribunal approved the view taken by the Appellate Authority and held that when debatable issue was involved. Section 154 of the Act could not have been invoked by the assessing officer.

We have heard Shri Rajesh Bindal, counsel for the revenue and perused the record. In our opinion, the question referred by the Tribunal does not require consideration by this court because the amount involved is too small. For taking this view, we can appropriately draw support from the judgment of the Delhi High Court in Commissioner of Income Tax Vs. Blaze Advertising (Delhi) (P) Ltd., in which the court declared to answer the question on the ground that the amount involved was only Rs. 18,823.

In the result, we decline to answer the question and accordingly dispose of the reference.