COMMISSIONER OF INCOME TAX Vs. S C NAGPAL

JUDGEMENT

(1.) The following question is required to be referred by the Tribunal, Amritsar Bench, to this Court for its opinion under s. 256(2) of the IT Act, 1961 (for short, the Act) :

(2.) The assessee was a development officer employed in the LIC of India and derived income from salary. The assessee received incentive bonus during the previous year relevant to the asst. yr. 1987-88 amounting to Rs. 11,821 from the said Corporation. At the time of assessment, the assessee claimed deduction on account of expenditure at the rate of 40 per cent amounting to Rs. 4,729. The balance amount of Rs. 7,092 was included in the total income for the purposes of tax. The AO, however, rejected the claim regarding the deduction on account of expenditure and brought the entire amount of incentive bonus to tax.

(3.) The petitioners main contention is that Instruction No. 1777 issued by the Board on 4th Nov., 1987 contains the guidelines to be followed while deciding the question whether an appeal should be filed or whether a reference be made. The Board advised the tax authorities that filing of the Departmental appeal/reference should be selective. The authorities were reminded that guidelines had been issued laying down monetary limit of revenue effect at Rs. 10,000 for filing appeals before the Tribunal, Rs. 30,000 for reference before High Court and Rs. 60,000 for appeals to the Supreme Court. These guidelines were, however, required to be adhered to subject to certain exceptions. One such exception was to arise where the cumulative revenue effect of the issue in the assessees case for all the years up to the year for which returns were filed was taken into consideration while working out the monetary limit as aforesaid. Where the same issue is involved in different cases of a group, the revenue effect of the group and not the individual cases has to be taken into account for the purpose of the monetary limit. It was further made clear therein that, while applying the monetary limits, the effect of carry-forward and consequential addition or the deletions in other years should be kept in view.