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TMI Blog1983 (5) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 256(2) of the I.T. Act (for short, called " the Act ") for a mandamus directing the Tribunal to refer the following two questions of law to this court for its opinion: " (1) Whether, on the facts and in the circumstances of the case, the assumption by the Appellate Tribunal, that the cash payments made by the assessee, in contravention of s. 40A(3) of the I.T. Act, 1961, were made to identifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shown to have been incurred by the assessee to that extent was hit by the prohibition contained in s. 40A(3) of the Act, inasmuch as it consisted of payments exceeding Rs. 2,500 made otherwise than by crossed cheque or crossed draft to 34 persons. It may be mentioned that the ITO did not doubt that such payments had been genuinely made by the assessee to identified payees. He, however, refused t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal, the Revenue moved an application under s. 256(1) of the Act for reference of the above-noted two questions to this court which was declined, holding that question No. 1 did not arise from its order and question No. 2 related purely to a finding of fact. As would be apparent from the order dated March 1, 1976, of the Tribunal, the finding of the assessing authority that the payments were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al prosecution and not the payments simpliciter. It was further contended that the exceptional circumstances must be such as arise from a lawful activity. On the proved facts, the question thus raised, according to the learned counsel, was a question of law and not of fact, Whatever may be the merits in the contention raised, there can be no manner of doubt that a question of law does arise from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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