1999 (9) TMI 63 - HC - Income Tax

Summary

Issues:
1. Whether the theatre building should be treated as a plant for depreciation.
2. Whether a subsequent change in law justifies rectification of a previous order.
3. Can the Tribunal be compelled to change its judgment based on a subsequent binding decision.

Analysis:

Issue 1:
The petitioner, a partnership firm operating a theatre, contended that the theatre building should be considered a plant for depreciation. Initially, the AO allowed depreciation at building rates, but the Tribunal ruled in favor of the petitioner, considering the theatre building as a plant. However, a reference to the High Court resulted in a judgment favoring the Revenue. Subsequently, a Full Bench decision classified a theatre as a plant. The petitioner sought rectification of orders based on the Full Bench decision, but the Tribunal refused, citing finality of the previous order under s. 260(1) of the IT Act.

Issue 2:
The petitioner argued that a subsequent change in law justifies a review, citing precedents where orders were rectified based on revised judicial interpretations. However, the Tribunal maintained that the original order was final and not subject to rectification based on later decisions. The judge emphasized that once a reference is answered, the Tribunal must decide accordingly, and the High Court's judgment is binding between the parties.

Issue 3:
The judge clarified that while a subsequent binding decision can be grounds for review, in this case, the Tribunal is bound by the High Court's judgment post-reference. The judge highlighted that the Tribunal's decision must conform to the High Court's judgment and cannot be altered based on subsequent decisions. Citing legal precedents, the judge affirmed that the Tribunal's decision post-reference must align with the High Court's judgment, even if subsequent interpretations differ.

In conclusion, the judge dismissed the original petition, affirming the correctness of the Tribunal's order (Ext. P2) and emphasizing the binding nature of the High Court's judgment post-reference on the Tribunal's decision-making process.