COMMISSIONER OF INCOME TAX vs. ONGC

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ITA/154/1998HC UttarakhandUKHC01025182200306 August 2003Author: OTHER1 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Tribunal erred in not referring the question of law to the High Court under Section 256 of the Income Tax Act. The Court allowed the application made by the department. The Tribunal was directed to draw a statement of case and refer the question of law to the High Court under Section 256(1) of the Act. The Court requested the Tribunal to expedite the procedure for drawing the statement of case, given that the matter pertains to assessment year 1985-86. The operative direction is to refer the question of law to the High Court for decision. No finding was reached on the merits of the tax perquisites issue itself.

What were the facts?

The Commissioner of Income Tax, Meerut (the applicant/revenue) filed an application under Section 256(2) of the Income Tax Act, 1961, before the High Court of Uttaranchal at Nainital. This application was made because the Income Tax Appellate Tribunal (ITAT) had refused to refer a question of law to the High Court. The assessee is Oil and Natural Gas Commission (ONGC) as agent of M/s Swire Craneship Corporation, Dehradun. The assessment year in question is 1985-86. The dispute concerns the includability of tax perquisites obtained by ONGC in its total income.

What were the issues?

1. Whether the assessee was right in contending that tax perquisites obtained by ONGC were includable in its total income (question of law). The revenue contended that tax perquisites were includable in the total income of the assessee, relying on Section 44BB of the Income Tax Act. Alternatively, the revenue argued that such perquisites were covered under Section 28(iv) of the Act, and therefore, should be includable in the total income on that ground as well. The judgment does not record any specific contentions from the assessee regarding these points, other than their general contention that the perquisites were includable in total income.

Which sections of the Income-tax Act were involved?

Section 256(2),Section 44BB,Section 28(iv),Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Application No.405 of 2001 (Old No. 154 of 1998)

The Commissioner of Income Tax, Meerut

………… Applicant

Vs.

Oil and Natural Gas Commission As agent of M/s Swire Craneship Corporation, Dehradun …..……

Respondent

……..

Sri S.K.Posti, Advocate for the appellants Sri J.P. Joshi, for the respondents

Coram: Hon. S.H.Kapadia, C.J. Hon. P.C. Verma, J.

Date: 06.08.2003

PC:

This is an application made by the department under section 256(2) of the Income Tax Act. This application is made because the Tribunal has refused to refer the question of law to this Court. A short point which arises for determination in this case is whether the assessee was right in contending that Tax perquisites obtained by the O.N.G.C. was includable in its total income. The department took the view that in view of section 44BB of the Income Tax Act, such perquisites were includable in the total income of the assessee. In the alternative, the department took the view that such perquisites stipulated under section 28(iv) and, therefore, even on that ground on alternative basis such benefits were includable in the total income of the assessee. This point needs to be decided by this Court. The Tribunal erred in not referring the question to this Court under section 256 of the Income Tax Act. In the circumstances, we allow the application made by the department and direct the Tribunal to draw statement of case and refer the above question of law to this Court under section 256 (1) of the Act. Since this matter pertains for the assessment year 1985-86, we request the Tribunal to expedite the procedure and process of drawing of statement of case. Application is finally disposed of. No order as to costs.

(P.C. Verma, J.) (S. H. Kapadia, C.J.) AK

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