Law:

Section:

Section 10(17B) [since substituted by section 10(17A)(ii) with effect from 1-4-1989 of the Income-tax Act, 1961 - Exemptions - Rewards approved by Government - Assessment year 1976-77 - In appreciation of meritorious work done by assessee, an ITO, Central Government paid certain amount by way of reward to him - Whether in absence of any material to show that purpose for which reward had been given, had been approved by Central Government in public interest, section 10(17B) was not applicable and aforesaid amount was, thus, not exempt from income-tax - Held, yes FACTS In appreciation of the meritorious work done by the assessee, an ITO, in regard to Voluntary Disclosure Scheme, the Government of India made payment of cash reward to him. The assessee claimed exemption under section 10(17B). The ITO rejected the assessee's claim. On appeal, the AAC allowed the assessee's claim, and the Tribunal, on further appeal, upheld the order of the AAC. On reference: HELD From a perusal of the provisions of section 10(17B) it is clear that a payment made as reward by the State or the Central Government is not includible in computing total income only when the reward is for such purposes as may be approved by the Central Government in this behalf in the public interest. It was no doubt true that the payment had been made by the Central Government to the assessee as a reward and that the said payment was also in the public interest. But there was no material on record for holding that the purpose for which the reward in question had been given had been approved by the Central Government in public interest for the applicability of clause (17B) of section 10. Therefore, such reward would not qualify for exemption under section 10(17B). The Tribunal was, therefore, wrong in allowing the assessee's claim. JUDGMENT 1. By this reference under section 256(1) of the Income-tax Act, 1961 ('the Act'), the Tribunal, 'A' Bench, Patna, has referred the following question of law to this Court for its opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the award of Rs. 1,150 received by the assessee is exempt from income-tax under section…

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