THE COMMISSIONER OF INCOME TAX vs. ONGC

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ITA/186/1998HC UttarakhandUKHC01025199200306 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 revenue and directed the Tribunal 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 1986-87. The High Court did not decide the merits of the tax perquisites issue itself but rather the procedural issue of whether the question should be referred.

What were the facts?

This matter comes before the High Court of Uttaranchal at Nainital as an application by the Commissioner of Income Tax, Meerut (the applicant/revenue) under section 256(2) of the Income Tax Act, 1961. The application is directed against the Income Tax Appellate Tribunal (ITAT) which had refused to refer a question of law to the High Court. The assessee is Oil and Natural Gas Commission (ONGC) as agent of Melland International Inc., Dehradun. The assessment year in question is 1986-87. The dispute concerns the includability of tax perquisites obtained by ONGC in its total income.

What were the issues?

1. Whether the Tribunal erred in refusing to refer the question of law to this Court under section 256 of the Income Tax Act, 1961, concerning the includability of tax perquisites in the assessee's total income. Assessee's Contention: The assessee contended that tax perquisites obtained by ONGC were not includable in its total income. Revenue's Contention: The revenue contended that in view of section 44BB of the Income Tax Act, such perquisites were includable in the total income of the assessee. Alternatively, the revenue argued that such perquisites were stipulated under section 28(iv) and therefore includable in the total income on that ground as well.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Application No.418 of 2001 (Old No. 186 of 1998)

The Commissioner of Income Tax, Meerut

………… Applicant

Vs.

Oil and Natural Gas Commission As agent of Melland International Inc., 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 1986-87, 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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