Law:

Section:

Section 254, read with section 256, of the Income-tax Act 1961 - Appellate Tribunal - Powers of - Assessment year 1972-73 - Whether reference of questions of law at instance of non-applicant is void and Tribunal is not competent to refer such questions to High Court - Held, yes - Whether where, however, order made by Tribunal operates entirely in favour of one party, then on a reference application being filed by aggrieved party, it is open to non-applicant to ask for a reference of questions of law which arise on its submissions negatived in appeal by Tribunal - Held, yes - Whether where, Tribunal's order under section 254 was partly in favour of assessee and partly against him, non-applicant assessee could not have demanded reference of question without undergoing procedure of section 256 (1) - Held, yes FACTS The ITO, assessed the total income of the assessee at Rs. 52,360 as against the declared "nil" total income. In his return, the assessee had shown a receipt as "living allowance" but his contention was that the said income was exempt by virtue of the provisions of section 10 (14). The assessee had also shown in the return a receipt being retention remuneration. But his contention was that the said remuneration was not taxable as according to the assessee, the provisions of section 5 (1) (c) were not applicable to the said remuneration. The ITO negatived both the contentions of the assessee. On appeal, the AAC confirmed the order of the ITO. On second appeal, the Tribunal partially allowed the appeal insofar as the retention remuneration received during the relevant period by the assessee was concerned. So far as the assessee's contention regarding non-payability of tax on living allowance went the Tribunal held it against the assessee and took the view that the living allowance paid to the assessee during the relevant year constituted a "perquisite" within the meaning of Section 17(2) and consequently, was includible in his total income. The revenue being aggrieved by that part of the decision of the Tribunal by which the retention remuneration received by the assessee was held to be non-taxable, preferred a reference application under section 256(1)…

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