SHYAMLAL PRAGNARAIN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS case has been referred to a Full Bench on a difference of opinion.

(2.) PROVISO (2) to S.66 -A, Indian Income -Tax Act is to the effect that when there is a difference of opinion between the Judges hearing a reference the point of law upon which they differ and the case shall then be heard upon that point only by one or more of the other Judges of the High Court and such point shall be decided according to the opinion of the majority of the Judges who have heard the case including those who first heard it. By reason of this proviso we had some doubts whether one of us who was a member of the Division Bench should be on this Full Bench but Mr. Pathak on behalf of the assessee has urged that the proviso only refers to a case where a point of law has been referred for decision and, in such a case, the opinion of the Judge to whom the point has been referred has to go back to the Bench which had heard it and the order has to be passed by it. But that where the whole case has been referred to a new Bench this proviso does not apply and that we can hear the whole reference afresh and give our own decision. This view has been supported by Mr. Jagdish Swarup, counsel for the other side, and both the learned counsel have made a request that even if there be any irregularity they are waving the same and have prayed that the case may be heard and decided by this Bench.

(3.) IN the year 1943 the assessee firm made a profit of Rs.4,58,957/ - and paid commissions to the Manager and the Assistant Manager totalling a sum of Rs.68,842/ -. The sum of Rs.4,58,957/ -was the total profit without deducting the income -tax or the excess profit tax payable. The Income -tax Officer accepted the contention of the assessee that the sum of Rs.68,842/ - was an allowable deduction under S.10 Indian Income -tax Act, but whether he allowed the deduction under S.10(2) (X) or 10(2) (XV) of the Act is not clear and the counsel for the parties are not agreed on the point. The Excess Profits Tax Officer, however, while accepting the figure that had been worked out by the Income Tax Officer disallowed a sum of Rs.33,525/ - out of the sum of Rs.68,842/ - paid by the assessee firm to the Manager and the Assistant Manager.