Voluntary contributions and income tax reference: each assessment year is separate, and res judicata does not bar a later reference.

Voluntary contributions were treated as a referable question of law on whether they are taxable as income despite section 2(24)(ii)(a) of the Income-tax Act, 1961, and the Tribunal was directed to state the case on that issue. The earlier failure to pursue the point for one assessment year did not bar reference for a later year, because each assessment year is a separate proceeding and res judicata does not apply in terms to income-tax assessments. The formulated legal question was therefore referred to the High Court.

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Issues: Whether the Tribunal should be directed to state the case and refer the question whether voluntary contributions are taxable as income notwithstanding section 2(24)(ii)(a) of the Income-tax Act, 1961, and whether the fact that the issue was not pursued for an earlier assessment year barred the reference for the subsequent year.

Analysis: The question sought to be referred arose from the Tribunal's order and was a question of law fit for reference. It was also noted that each assessment year is a separate proceeding and the principle of res judicata does not apply in terms to income-tax assessments, so the absence of a pursued reference for one year did not take away the right to seek reference for the next year.

Conclusion: The Tribunal was directed to draw up the statement of case and refer the formulated question to the High Court.

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