COMMISSIONER OF INCOME TAX Vs. G D SHARMA

JUDGEMENT

(1.) ON an application filed under Section 256(1) of the IT Act, 1961, the Tribunal has referred the following question for the opinion of this Court :

(2.) WHILE processing the return under Section 143(1)(a) of the IT Act, 1961, the AO made disallowance of Rs. 12,054 claimed as deduction by the assessee from incentive bonus earned by him, in his capacity as Development Officer of LIC. The assessee moved an application under Section 154 seeking rectification of the intimation to the effect that incentive bonus was separate from salary income and hence that expenditure incurred to earn the same should have been allowed. The AO rejected the application of the assessee vide his order dt. 12th July, 1991. In appeal before the Dy. CIT(A), the Dy. CIT(A) has allowed the claim of the assessee on the ground that the allowability of expenses from the income of incentive bonus was a debatable issue and hence could not fall within the scope of proviso as contemplated in Section 143(1)(a) of the Act. In appeal before the Tribunal, the Tribunal has confirmed the view taken by Dy. CIT(A).

(3.) THE facts stated above are not in dispute that assessee has claimed the deduction of expenditure from incentive bonus received by him. The fact is also not in dispute that assessee is an employee of LIC. Consistent view has been taken by this Court since the case of CIT v. Shivraj Bhatia, that when Development Officer of the LIC is an employee of the LIC and he received any amount in the form of incentive bonus, no deduction can be allowed to the employee. If he received anything from the employer, only standard deduction can be allowed to the employee and no other type of deduction in the form of expenditure can be allowed. That view has been taken by the AO in this case, though in intimation under Section 143(1)(a). Thereafter, assessee moved an application under Section 154. Section 154 provides only for corrections of apparent mistakes. As there was no apparent mistake and issue involved is debatable, AO cannot correct the mistake on a debatable issue under Section 154 of the Act.