1997 (7) TMI 33 - HC - Income Tax

Summary

Issues:
1. Adjustment of subsidy for depreciation
2. Delay in filing petition under section 256(1) of the Income-tax Act
3. Refusal of Income-tax Appellate Tribunal to refer questions of law
4. Condonation of delay in filing petition under section 256(1) of the Act

Adjustment of Subsidy for Depreciation:
The assessee declared a net loss for the assessment year 1982-83. The Income-tax Officer reduced the subsidy amount from the cost of building and machinery for depreciation purposes. The Commissioner of Income-tax (Appeals) accepted the assessee's appeal, but the Income-tax Appellate Tribunal, Amritsar Bench, set aside this decision and reinstated the Assessing Officer's order. The assessee filed a petition under section 256(1) of the Income-tax Act, claiming questions of law regarding the treatment of the subsidy received. The Tribunal dismissed the petition due to a delay of 23 days and on the merits, citing a judgment of the Punjab and Haryana High Court. The assessee sought rectification under section 254(2) of the Act, which was also dismissed.

Delay in Filing Petition under Section 256(1) of the Act:
The Tribunal refused to refer the questions of law as they were deemed covered by a previous judgment of the Punjab and Haryana High Court. However, this judgment was subsequently overruled by the Supreme Court. The High Court accepted the assessee's request to challenge the Tribunal's decision not to condone the delay in filing the petition under section 256(1) of the Act. The Court held that the Tribunal had the jurisdiction to condone the delay up to 30 days, and the assessee had shown sufficient cause for the delay. The Court set aside the Tribunal's order and accepted the writ petition.

Refusal of Income-tax Appellate Tribunal to Refer Questions of Law:
The Tribunal had initially refused to refer the questions of law to the High Court based on the previous judgment. However, the High Court directed the Tribunal to refer a specific question regarding the treatment of the subsidy for depreciation along with the statement of the case for the High Court's opinion.

Condonation of Delay in Filing Petition under Section 256(1) of the Act:
The High Court accepted the explanation provided by the assessee for the delay in filing the petition under section 256(1) of the Act. The Court held that there was sufficient cause for condoning the delay and set aside the Tribunal's order. The High Court directed the Tribunal to refer the question of law to the Court for consideration.