Commissioner Of Income-Tax vs Escorts Employees' Welfare Trust
1988 Latest Caselaw 20 Del

JUDGMENT

1. These two application under section 256(2) of the Income-tax Act, 1961, pertain to the assessement years 1979-80 cand 1980-81, respectively. The petitioner prays herein that we direct the Tribunal to draw up a statement of case and refer the two question of law.

2. For the previous assessment years 1977-78 and 1978-79, this court, by an order dated May 27, 1987, in I.T.C's Nos. 158 to 161 of 1985 (see page 106 infra) directed the Tribunal "to make a consolidated statement of case" and "refer for the decision of this Court" identical questions of law. We are informed that the assessed challenged this order by way of a special leave petition, but the same has been dismissed by the Supreme Court on November 3, 1987 (see [1988] 169 ITR (St.) 12).

3. Mr. Bishamber Lal has strenuously argued that the present applications should be rejected as question No. 1 is squarely covered by a decision of this court in CIT v. Eternal Science of Man's Society and the answer to question No. 2 is self-evident.

4. The present case pertains admittedly to a private discretionary trust which is for the benefit of the employees of Escorts Ltd., which is the contributor, whereas the case of CIT v. Eternal Science of Man's Society is that of a charitable trust. In any case, we are of the opinion that in order to maintain consistency and in view of the fact that for these years, the authorities have just followed the composite order made for the assessment years 1977-78 and 1978-79, we direct the Tribunal to draw up a consolidated statement of case for the assessment years 1979-80 and 1980-81 and refer for the decision of this court, the following questions of law :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 28,00,000 received by the assessed in the assessment year 1979-80 and Rs. 72,50,000 received in the assessment years 1980-81 did not constitute income liable to tax ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in holding that the assessed ought to be taxed at a rate applicable to an association of persons and not at the flat rate of 65 per cent. as held by the Income-tax Officer ?"

5. The applications are disposed of. There will be no order as to costs.