Jurisdiction of authorised tax officer and proof of services for commission deduction determine validity of assessment and disallowance

A Tax Recovery Officer authorised under the Income-tax Act was treated as competent to complete the assessment, and the challenge to jurisdiction based on the transfer of case was rejected because the authorisation and transfer were in force when the assessment was made. The note also states that commission expenditure is deductible only where actual services rendered are proved; disclosure of the recipients' income or allowance in other years is insufficient. On the facts described, no supporting evidence of services was produced, so the disallowance was upheld and the assessment remained undisturbed.

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Issues: (i) Whether the assessment framed by the Tax Recovery Officer was without jurisdiction; (ii) Whether the disallowance of commission expenditure was justified for want of evidence of services rendered.

Issue (i): Whether the assessment framed by the Tax Recovery Officer was without jurisdiction.

Analysis: The definition of "Assessing Officer" and the statutory scheme under the Income-tax Act, 1961 were read to include an Income-tax Officer authorised to function as a Tax Recovery Officer. The Court treated the power to conduct the assessment as a procedural matter and noted that the relevant transfer and authorisation were in force when the assessment was completed. It also held that the challenge to the transfer of case under section 127(2) could not be sustained in the present forum.

Conclusion: The objection to jurisdiction was rejected and the assessment was held to be valid.

Issue (ii): Whether the disallowance of commission expenditure was justified for want of evidence of services rendered.

Analysis: Deduction for commission payment requires proof that services were actually rendered. Mere disclosure of the recipients' income or allowance in other years was not enough. As no supporting evidence of services rendered was produced before the authorities, the claim for commission deduction was not established.

Conclusion: The disallowance of commission expenditure was upheld.

Final Conclusion: The appeal failed on both issues and the assessment order as affirmed by the appellate authority remained undisturbed.

Ratio Decidendi: A statutory officer authorised to act as a Tax Recovery Officer does not lose the character of an Income-tax Officer for assessment purposes, and commission expenditure is deductible only on proof of actual services rendered.

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