COMMISSIONER OF INCOME TAX Vs. KAMARHATTY CO LTD

JUDGEMENT

(1.) IN this reference under S. 256(2) of the IT Act, 1961 (the Act') for the asst. yr. 1981-82, the following question has been referred to this Court:

(2.) SHORTLY stated, the facts are that the ITO in his order of assessment dt. 8th Aug., 1981 allowed deduction of Rs. 22,20,834 being ad hoc payment made to the workers over and above the minimum bonus payable under the payment of Bonus Act, 1965. The CIT found that the ITO allowed the said deduction without application of mind. He initiated proceedings under S. 263 of the Act and came to the conclusion that the order of the ITO allowing the aforesaid deduction was erroneous and prejudicial to the interests of the Revenue. The CIT, accordingly, withdrew the said deduction wrongly allowed by the tax officer.

(3.) THE Tribunal considered the rival submissions. The Tribunal following the decision of this High Court in the case of General Beopar Co. (P) Ltd. (supra) held that the CIT could not revise the order of assessment dt. 8th Aug., 1981 since it got merged with the order of the CIT (A) dt. 31st March, 1985. Accordingly, the Tribunal set aside the order of CIT passed under S. 263.