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Issues:
Scope and jurisdiction of High Court in a petition, Reopening issues of fact in a reference, Timing of a challenge, Consideration of legal position, Principle of accounting overriding accounting procedures, Precedent and reversal of views, Manifest prejudice or irregularity in taxing statute. Scope and Jurisdiction of High Court: The High Court's jurisdiction in a petition is limited, primarily focusing on the quality of the Tribunal's order. The court clarified that the power of the High Court is restricted, especially after the Tribunal's decision. Reopening issues of fact or mixed questions of fact and law to support a reference is impermissible. The Department's attempt to challenge previous decisions was deemed unfeasible. Reopening Issues of Fact in a Reference: The Department sought to challenge previous decisions based on principles of accounting, arguing for corrective action due to errors arising from accounting procedures. However, the court emphasized that decisions must align with legal principles, overriding accounting procedures. The court referenced a case where it was established that decisions should be made in accordance with legal principles. Timing of a Challenge: The court highlighted the significance of timing in challenging decisions. It noted that the Department's attempt to reverse previous decisions was not viable, especially considering the previous acceptance of Tribunal's verdicts on identical facts and legal provisions. The court emphasized that putting the clock back was not possible. Consideration of Legal Position: The court considered legal positions presented by the respondents, referencing previous decisions that upheld deductibility points under relevant sections. The court emphasized that a reference should only be directed if the Tribunal's view requires serious reconsideration based on incorrect interpretation of the law. Principle of Accounting Overriding Accounting Procedures: The court reiterated that decisions must adhere to legal principles over accounting procedures. It referenced a case where it was established that cases should be decided in line with legal principles, which take precedence over accounting practices. Precedent and Reversal of Views: While acknowledging the possibility of reversing views or correcting wrong practices, the court noted the inherent difficulty faced by the Department in the current assessment year. It emphasized the need for foundational basis and record support for arguments presented before the court. Manifest Prejudice or Irregularity in Taxing Statute: The court conducted a comprehensive review of facts and legal positions to determine the presence of manifest prejudice or irregularity in the taxing statute. It concluded that no such factors were evident in the present situation, leading to the confirmation of the Tribunal's decision of no referable case. In conclusion, the court dismissed the petitions, emphasizing the need to demonstrate manifest wrong on the part of the assessee for a reference to be directed. The court found no grounds for a reference based on the arguments presented, clarifying that the observations in the order applied only to the specific assessment years in question.
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