Delhi High Court
Commissioner Of Income-Tax vs Arvind Construction Co. Pvt. Ltd on 24 January, 1991
Bench: B Kirpal, S Duggal
JUDGMENT
1. The petitioner seeks reference of the following questions to this court :
"1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that expenditure of Rs. 3,64,13,337 on which weighted deduction under section 35B was allowed by the Income-tax Officer amounting to Rs. 1,21,37,945 was covered by the assessed's appeal before the Commissioner of Income-tax (Appeals) and thereby cancelling the order under section 263 of Income-tax Act ?
2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the expenditure incurred in actual performance of contract, and not for promotion of sales outside India of goods and services is entitled to deduction under section 35B of the Income-tax Act ?"
2. On behalf of the respondent, it is contended that the application under section 256(2) is barred by time. The order under section 256(1) was sent to the Chief Commissioner of Income-tax, Central Revenue Building, and was received by him on May 22, 1989, and, therefore, the period should be computed from that date. If this is done, the present application is barred by time.
3. It is, however, contended by the petitioner that the Commissioner of Income-tax, Delhi Central II, who is the petitioner in the present case, received the order from the Income-tax Appellate Tribunal only on August 14, 1989. It is, therefore, submitted that the limitation should be computed with effect from August 14, 1989, and not with effect from May 22, 1989, when the order under section 256(1) was sent to the Chief Commissioner of Income-tax.
4. With the increase in the volume of work over the recent years, the number of Commissioners in some of the cities has increased manifold. Delhi is no exception. Apart from various Commissioners to whom different jurisdictions have been allocated, we have in Delhi three Chief Commissioners of Income-tax who are stated to be the administrative head in their respective charges.
5. Section 256(1) gives the right to a Commissioner to file an application for stating the case to this court. Even though an appeal against the order of the Commissioner of Income-tax (Appeals) is filed to the Income-tax Appellate Assistant Tribunal by the Assessing Officer, namely, the Income-tax Officer or the Inspecting Assistant Commissioner, as the case may be, the reference application under section 256(1) has to be filed not by the Income-tax Officer but only by the Commissioner of Income-tax. It is obviously the Commissioner of Income-tax who is in charge of the Assessing Officer who would have the jurisdiction to file an application under section 256(1). He would be regarded as "the Commissioner" referred to in section 256(1) as well as section 256(2). The reference application under section 256(1), in the present case, was filed by the Commissioner of Income-tax (Central II). The order rejecting the application under section 256(1) should, therefore, have been served on the Commissioner was of no consequence. It is only when the order was served on the Commissioner of Income-tax (Central II), that the limitation would commence. It may happen that, after the filing of the application under section 256(1), the jurisdiction of the Commissioner may change. But, we are not, in the present case, dealing with such a controversy. It is not in dispute that it is the Commissioner of Income-tax (Central II) only who had filed the application under section 256(1) and, therefore, the order should have been served on the Commissioner of Income-tax (Central II) and not on the Chief Commissioner. The petitioner has, therefore, rightly computed the period of limitation with effect from the date when the order was served on them.
6. As regards the merits of the case, in our opinion, the questions of law do arise and we, therefore, direct the Tribunal to state the case and refer the aforesaid questions of law to this court.
