TaxTMI 
TaxTMI 
1996 (7) TMI 183
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....refore, urged that the incentive scheme of DESU for awarding generation incentive should also be covered in the same spirit for the assessment year 1988-89. The Assessing Officer did not agree with the contentions of the assessees and disallowed the claimed exemption by observing that the CBDT had not notified these exemptions, and that in view of the Board's instructions No. 1788 dated22-11-1986, no deduction was admissible except the standard deduction. 3. On appeal, while the ld. DCIT(A) Range-I, New Delhi observed in the case of Shri Rajinder Tiku that the Generation Reward (incentive) Scheme framed by DESU had not been specifically approved by the Central Government, as no notification by the Board had been issued for the assessment year 1988-89. The ld. DCIT(A) Range-II, New Delhi in the case of Shri S.R. Sethi observed that DESU was covered within the definition of "State" and Delhi being a Union Territory run by the Central Government, DESU could be considered to be a part of the Central Government and approval of the scheme of payment by DESU to its employees was automatically taken to be approval by the Central Government and the assessee was entitled to exemption unde....
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.... of DESU were not only regulated but were also managed/governed by the Central Government through the Central Electricity Authority of India, a unit of the Ministry of Energy. It was further urged that DESU was not a part of Delhi Administration and it was a part of Municipal Corporation of Delhi which is a statutory body created by Parliament of India under the Delhi Municipal Corporation Act, 1957. It was also urged that even if DESU is held to be a part of the Delhi Administration, still it is a part of the Central Government as the Union Territory of Delhi is Centrally administered. In the alternative, it was submitted that DESU has several trappings of the Central Government inasmuch as it is created by an Act of Parliament its technical operation and planning is controlled and regulated by the Central Government, there through its unit, that is, Central Electricity Authority of India, the Ministry of Energy has a substantial hold on DESU and its working, the main funds for operation of DESU are paid out of the consolidated fund of India, DESU is subject to statutory Public Accounts Committee of Parliament. Its accounts are being audited as prescribed by law. It was further ur....
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.... the Central Government is prescribed in section 10(17B) in relation to scheme framed by the State Governments so that there is no drain on the Central revenues. It is further urged that section 10(17B) has not prescribed any proforma or time framed for grant of the approval and that such approval has only to be inferred from the contents of the scheme. It is ultimately urged that the incentive scheme is already floated by the Centre and its approval is thus implicit. 6. The learned counsel Shri Rajan Bhatia, who appeared for Shri S.R. Sethi submitted that the arguments advanced by Shri M.N. Tiku may be taken as advanced in the case of Shri S.R. Sethi also. In addition to the said arguments, the learned counsel submitted that section 10(17B) has four limbs and that "public interest" cannot be disputed in the present case. He further mentioned that in accordance with Dictionary meaning the word "reward/incentive" means "recompense for work". He, therefore, urged that the case of the assessee is covered by the provisions of section 10(17B). He also submitted that even if the incentive granted by DESU to the assessee is taken as part of his salary, the said part of the salary was s....
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....ry of Energy was forwarded. He submitted that there was no reply from the said association. The ld. D.R. further relied on the decision of the Hon'ble Andhra Pradesh High Court in the case of M. Krishna Murthy v. CIT [1985] 152 ITR 163/23 Taxman 126, wherein it was held that incentive bonus was taxable. 8. We have carefully considered the rival submissions and have also perused the orders of the tax authorities in both the cases as also the relevant record to which our attention was invited during the course of the hearing. We have also seen the case-law relied upon by both the learned counsels and the ld. D.R. It is observed that the thrust of the arguments advanced by the ld. counsels is that DESU is a part of the Central Government and detailed arguments have been advanced in that behalf. We may mention that DESU is a wing of the Delhi Municipal Corporation which has been created under the Delhi Municipal Corporation Act, 1957. At best, DESU can be considered to be a local authority within the meaning of section 3(31) of the General Clauses Act, 1897. Insofar as arguments advanced by the ld. counsels that DESU should be construed as "State" within the meaning of Article 12 of....