2002 (12) TMI 32 - HC - Income Tax

Benefit of the section 80HH - Whether the Appellate Tribunal is right in law in holding that for the assessment year 1989-90 the assessee was entitled to the benefit of the section 80HH of the Income-tax Act, even though Hosur, in which town, the assessee s industrial undertaking is located had ceased to be a notified backward area in the year 1986? - More than one view is possible on the interpretation of section 80HH of the Act and there is no glaring mistake present in the order of the Appellate Tribunal requiring the Tribunal to rectify its order.

Summary

Issues:
Interpretation of section 80HH of the Income-tax Act for the assessment year 1989-90.

Analysis:
The judgment pertains to an appeal filed against the order of the Commissioner of Income-tax (Appeals) before the Income-tax Appellate Tribunal regarding the entitlement of the assessee to deduction under section 80HH of the Income-tax Act for the assessment year 1989-90. The Appellate Tribunal, based on a circular issued by the Central Board of Direct Taxes, held that the assessee was indeed entitled to the deduction. The Tribunal clarified that industries established before September 10, 1986, would continue to enjoy the benefit of section 80HH, irrespective of subsequent amendments. The Revenue did not challenge this order, but later filed a miscellaneous petition seeking rectification, which was dismissed by the Tribunal. The Revenue then appealed against this decision.

The High Court noted that the Revenue did not challenge the original order of the Appellate Tribunal and was only contesting the decision on the miscellaneous petition. The Revenue argued that the assessee was not eligible for deduction under section 80HH based on a circular, but the Tribunal's interpretation was valid, considering the circular's provisions. The Court observed that multiple interpretations were possible regarding section 80HH and found no error in the Tribunal's order that warranted rectification. The Court also highlighted that the framed question of law by the Revenue was irrelevant to the present appeal, as it did not challenge the main appeal's order.

Consequently, the High Court upheld the decision of the Appellate Tribunal, dismissing the Revenue's appeal. The Court concluded that the question of law raised was not pertinent to the case at hand, as the Revenue had not formulated the appropriate question for consideration. Therefore, the appeal was dismissed, and no costs were awarded.

In summary, the judgment clarifies the interpretation of section 80HH of the Income-tax Act for the relevant assessment year, emphasizing the Tribunal's valid decision based on the circular's provisions. The Court's analysis focused on the lack of error in the Tribunal's order and the irrelevance of the framed question of law to the current appeal, leading to the dismissal of the Revenue's challenge against the Tribunal's decision.