1978 (12) TMI 44

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..... of liability for gratuity payable to workmen. It was claimed that this was a statutory liability under s. 3 of the Industrial Disputes Act read with the Sugar Industries Workmen Gratuity Scheme. This claim was made before the ITO on account of the gratuity payable for the previous year and earlier years in terms of the Wage Board Award. The ITO repelled the claim because no details or materials w .....

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..... the company itself had not made provision in the relevant accounts for the assessment year in question, namely, 1973-74. The entire argument was based on the actuarial report which was made in May, 1973. On these findings, the Tribunal refused to entertain the claim at that stage. The Tribunal has, at the instance of this court, referred the following question of law for our opinion: "Whether .....

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..... Mahesh Sugar Mills (P.) Ltd. v. CIT [1973] 92 ITR 503, decided on August 4, 1972, held that though no part of the gratuity may have been payable by the assessee in any of the earlier years, the past services of the employees have to be taken into account merely to arrive at the quantum of the liability which became payable after the notification. The liability for payment of gratuity ascertained .....

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..... the Tribunal either. The claim for deduction of liability for gratuity was sought to be sustained on a different ground before the Tribunal. Originally the ground related to the liability under the Wage Board Award. Before the Tribunal the ground was in line with the decision of this court in Madho Mahesh Sugar Mills' case [1973] 92 ITR 503 (All), namely, on the basis of the actuarial valuation. .....

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..... ief is not restricted to the plea raised by him. It is thus apparent that the claim for gratuity could be sustained on a footing other than that on which it was based before the lower departmental authorities. Before the Tribunal, the assessee could justifiably change the ground. The Tribunal was under a duty to entertain this submission and decide on merits. Accordingly, we answer the question .....

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