The rejection of a claim for deductions related to the education of directors should be justified based on the connection of the education with the business of the company.

K.L. Manjunath, J.—The assessee has come up in this appeal, challenging the concurrent findings on the order passed by the Assessing Officer by the Commissioner of Income Tax (Appeals), which has been confirmed by the Income Tax Appellate Tribunal in ITA No. 711/Bang./2001, dated 10-2-2004 for the assessment year 1997-98.

2. The appeal is admitted to consider the following substantial questions of law:

1. Whether the Tribunal was right in law in confirming the order of respondent through the confirming order passed by the Commissioner of Income Tax on grounds 7 and 8, when the same was not a speaking order?

2. Whether the Tribunal was right in law in confirming the order of respondent when admittedly the said order had not considered the documents filed by the appellant?

3. Whether the Tribunal was right in forming an opinion that appellant had taken a stubborn stand of non-co-operation without any material to support the same?

4. Whether the Tribunal was right in law in not holding that there has been violation of principles of natural justice because of the passing of the Assessment Order by the respondent under Section 144 of the Act?

5. Whether the Tribunal was right in not holding that the respondent ought not to have initiated proceedings under Section 144(1)(b) of the Act when admittedly the assessee/appellant have produced materials and relevant information?

6. Whether the Tribunal was right in not holding that the respondent ought to have assessed the appellant under Section 143(3) of the Act?

7. Whether the Tribunal was right in not holding that the Commissioner of Income Tax (Appeals) has not exercised his mind while reviewing the order of respondent?

3. We have heard the Learned Counsel for the parties.

4. The assessee is engaged in the manufacture and supply of automobile components to various automobile companies in India. For the assessment year 1997-98, return of income was filed by the assessee on 27-11-1997 by declaring total income of Rs. 55,42,403. The case was taken up for scrutiny. The Assessing Officer proceeded on the ground that the assessee-company did not co-operate with the proceedings. The order of assessment was completed on 20-9-2000. Being aggrieved by the same, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The appeal filed before the Commissioner of Income Tax (Appeals) came to be dismissed, against which an appeal was preferred before the Income Tax Appellate Tribunal, which appeal also came to be dismissed. Being aggrieved by the same, the present appeal is filed.

5. The main grievance of the appellant is that the authorities did not consider the documents filed by the assessee-company while passing orders.

6. The Learned Counsel for the appellant further contends that the assessee-company has sponsored two of its directors for higher education in connection with the specialised intensive training in the field of general management, marketing, finance and information technology, including project strategy, with a condition that after securing higher education, they should serve the assessee-company as directors, contending that the sponsorship of two directors is for the benefit of the company and the Assessing Officer did not consider the deductions claimed for the education of the two directors only on the ground that they are the children of the Managing Director is bad in law. Therefore, she requests to set aside all the orders and to remand the matter to the Assessing Officer for fresh consideration on the ground that the assessee would co-operative with the Assessing Officer by furnishing all the documents.

7. Per contra, the Learned Counsel for the revenue contends that all the authorities were justified in confirming the order of assessment, since the assessee-company had sponsored two children of the Managing Director for higher education at U.S.A., even though they are directors of M/s. Bangalore Software Services. There is no nexus between qualification,