RAJ PAUL DUGGAL LIC ,KHANNA vs. CIT LUDHIANA

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ITR/177/1998HC Punjab & HaryanaPHHC01037971199809 November 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the learned counsel for the Revenue was prepared to argue the case and had cited precedents supporting the revenue's position. However, no one appeared on behalf of the assessee to present their arguments. In the absence of any assistance from the assessee, the High Court deemed it inappropriate to delve into the question of law. Consequently, the reference was returned unanswered. The court did not decide the substantive issue of whether the incentive bonus was taxable as salary or eligible for deductions beyond the standard deduction under Section 16(1).

What were the facts?

This case involves a reference to the High Court of Punjab and Haryana at Chandigarh concerning Income Tax Reference No. 177 of 1998. The assessment year in question is 1991-92. The dispute pertains to an order passed by the Income Tax Appellate Tribunal, Chandigarh Bench, in I.T.A. No. 626 and C.O. No. 116/Chandi/93. The assessee is Raj Paul Duggal, a development officer of the Life Insurance Corporation of India, and the respondent is the Commissioner of Income-tax, Ludhiana. The core issue is the taxability of an incentive bonus received by the assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in taking the view that the amount received as incentive bonus by a development officer of the Life Insurance Corporation of India was taxable under the head 'salary' and not entitled to any deduction on account of expenditure other than the standard deduction available u/s 16(1) of the Income-tax Act, 1961? Assessee's contentions: No arguments were recorded for the assessee as no one appeared on their behalf. Revenue's contentions: The learned counsel for the Revenue stated that the question of law should be answered against the assessee, relying on the High Court's judgment in B. M. Parmar v. C. I. T., (1999) 235 ITR 679, and a subsequent judgment in I.T.R. No.15 of 1995 – The Commissioner of Income Tax, Haryana, Rohtak v. Kamal Kishore Batra DO, LIC, Kalanaur, Rohtak, decided on 5.9.2006.

Which sections of the Income-tax Act were involved?

Section 16(1)

AI-generated summary — verify with the full judgment below

I.T.R. No.177 of 1998 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R.No. 177 of 1998 Date of decision: 9.11.2006 Raj Paul Duggal, Khanna Applicant through

Nemo v. Commissioner of Income-tax, Ludhiana Respondent through Mr. S. K.Garg Narwana, Advocate CORAM: Hon'ble Mr.Justice Ajay Kumar Mittal Hon'ble Mr.Justice Rajesh Bindal

1.

Whether Reporters of local papers may be allowed to see the judgment ?

2.

To be referred to the Reporters or not ?

3.

Whether the judgment should be reported in the Digest? Rajesh Bindal, J. Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench (for short, `the Tribunal'), arising out of its order in I.T.A. No. 626 and C.O. No. 116/Chandi/93, in respect of assessment year 1991-92: “Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in taking the view that the amount received as incentive bonus by a development officer of the Life Insurance Corpn. of India was taxable under the head `salary' and not entitled to any deduction on account of expenditure other than the standard deduction available u/s 16(1) of the Income-tax Act, 1961 ?” At the very out-set, learned counsel for the Revenue stated that the question of law, referred to this Court, deserves to be answered against the assessee in view of the judgment of this Court in B. M. Parmar v. C. I. T., (1999) 235 ITR 679, which has been subsequently followed by this Court in I.T.R. No.15 of 1995 – The Commissioner of Income Tax, Haryana, Rohtak v. Kamal Kishore Batra DO, LIC, Kalanaur, Rohtak, decided on 5.9.2006. I.T.R. No.177 of 1998 [2] However, when the case was called for hearing, no one has put in appearance on behalf of the assessee. In the absence of any assistance by the assessee, we do not deem it appropriate to go into the question. Accordingly, the reference is returned unanswered. ( Rajesh Bindal ) Judge (Ajay Kumar Mittal) Judge 9.11.2006 mk

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