Law: Income Tax Act, 1961

Section: 10

Income-tax Act, 1961----Reference--Tribunal finding assessee entitled to exemption under two provisions-Revenue making application to refer question of assessee's liability only under one of such two provisions-Tribunal, held, can reframe questions to include both provisions and cannot refute to refer merely for reason of no application having been made for reference being made with regard to other provision. The assessee, the senior Rajmatha of the Maharana of 'Udaipur, was in receipt of a monthly allowance as hath kharch allowance of Rs. 5,000 paid her by the Maharana of Udaipur out of the privy purse received by him. The Appellate Tribunal upheld the contentions of the assessee that the hath kharch allowance was exempt under both section 10(9) as well as under section 10(2) of the I.-T. Act, 1961. The C. I. T. applied to the Tribunal to make a reference to the High Court of the question whether the allowance of. Rs. 60,000 received by the assessee from her son out of the privy purse was not liable to Income-tax under section 10(9) of the Act. The Tribunal held that though the question sought to be raised by the Commissioner was certainly a question of law, as the Com­missioner had not challenged the alternative ground that the allowance received by the assessee would be allowable under section 10(2) of the Act, the question sought to be raised by the revenue was of an academic nature and no good purpose would be served by referring the question proposed. The Commissioner thereupon applied to the High Court under section 256(2) of the Act to direct the Tribunal to refer the question referred to above. Held, that the short question before the Tribunal was whether the hath kharch allowance of Rs, 60,000 received by the assessee from the Maharana of Udaipur out of the privy purse received by him was liable to Income-tax or was it exempt. The Tribunal conceded that the question sought to be raised by the revenue was undoubtedly a question of law. Merely because the question as framed was whether or not the hath kharch allowance was liable to Income-tax under section 10(19), it did not prevent the Tribunal from refraining the question, namely, whether it was so…

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