JUDGMENT R.N. Ray, J.
1. Heard Sri S. Chopra, learned counsel for the assessee, and Sri R.K. Agarwal, learned counsel for the Revenue.
2. The Income-tax Appellate Tribunal has made this reference to this court under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for deciding the following common questions of law arising out of its order in I. T. A. Nos. 2867 to 2869/(Del) of 1978-79, dated December 30, 1978 :
"1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the assessee was entitled to statutory deductions provided in Section 16(1) of the Income-tax Act, 1961, against the income from pension ?
2. Whether, on the facts and in the circumstances of the case, the learned Member of the Income-tax Appellate Tribunal who decided the appeals presently under consideration, was bound to follow the decision of another Bench of the Income-tax Appellate Tribunal on a similar point ?
3. Whether, on the facts and in the circumstances of the case, it can be said that the standard deduction under Section 16(i) of the Income-tax Act, 1961, is deductible from income from pension ?"
3. The moot question in this case is that standard deduction under Section 16 of the Act is deductible from the income of pension or not. A bare perusal of Section 17(1)(ii) of the Act will reveal that the salary includes . . . "any annuity or pension". So it is abundantly clear that the assessee is entitled to have standard deduction in the income arising out of the pension, From a perusal of Sections 16 and 17 of the Act it is abundantly clear that the assessee was entitled to have standard deduction for his income out of pension.
4. So questions Nos. 1 and 3 are decided in the affirmative in favour of the assessee and in respect of question No. 2 it is held that as a matter of prudence the Income-tax Appellate Tribunal is to take into notice and consider the decision given by another Bench of the Income-tax Appellate Tribunal though that may not be entirely binding upon the Income-tax Appellate Tribunal.
5. With the above discussions, this reference is finally disposed of by answering the question in favour of the assessee.