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TMI Blog2021 (8) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction under Section 10 (14) of the Act. If the expenditure is incurred by the Development Officer, he cannot claim deduction u/s 10 (14) of the Act. It appears that LIC devised a proforma for the development officer to fill up certifying the expenditure incurred by them for development of insurance business. A portion of the allowance thus granted was then treated as exempt under Section 10 (14) of the act. Way back on March 12th, 1997 the CBDT informed the Chairman LIC that such procedure was not in accordance with Section 10 (14) of the Act read with Rule 2 BB (i) of the IT Rules and that unless an allowance is notified u/s 10 (14) (i) of the Act no portion of it can qualify for tax exemption. The Court finds no ground made out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.K. Jena, learned counsel for the Petitioners and Mr. S.S. Mohapatra, learned Senior Standing Counsel for the Opposite Parties (Department). 5. It is submitted by learned counsel for the LIC that the impugned order was passed by the ITO without even a show cause notice being issued to it. He submits that against the impugned order a revision petition under Section 264 of the Act was filed before the Commissioner of Income Tax, Bhubaneswar (Opposite Party No.2) on 28th January, 2002. The Commissioner dismissed the said revision petition by order dated 30th September, 2002 relying inter alia on the CBDT circular dated 1st February, 2001 where it was mentioned that conveyance/additional allowance being taxable are liable for deduction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duties of an office or employment. Rule 2BB (1) of the Income Tax Rules ('IT Rules') has only prescribed such allowance and not the extent of its allowability. It is accordingly contended by the Department that the submission of the Petitioner Assessee that the conveyance and additional conveyance allowance were not to be included in the total income and the Rules framed thereunder had only restricted the allowance is a misrepresentation of the legal position. 8. It is further pointed out that the Central Board of Direct Taxes (CBDT) instructions dated 18th March, 1991 followed by another circular issued on 23rd March, 1995 states that consequent upon the amendment to Section 10 (14) of the Direct Taxation Laws (Amendment), 1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 23rd March, 1995 consequent upon the amendment to Section 10 (14) of the Direct Taxation Laws (Amendment), 1980 with effect from 1st April, 1989 all circulars/instructions and clarifications earlier issued by the CBDT as regards Section 10 (14) of the Act would cease to have with effect from AY 1989-90 onwards. Therefore, it is to no avail for LIC to rely on its earlier instructions which were based on earlier circulars. A clarification to this effect was issued by the CBDT to the LIC on 4th January, 2001. 14. As pointed out by the Department, the relevant Rule 2BB (1) of the IT Rules only prescribes the types of allowances and not the extent of their allowability. After the aforesaid amendment to Section 10 (14) of the Act, the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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