1995 (12) TMI 14 - HC - Income Tax

Any Remuneration Business Expenditure Development Allowance High Court Per Annum Territorial Jurisdiction Weighted Deduction

Summary

Issues Involved:
1. Whether the Tribunal was right in holding that the Income-tax Officer could not reconsider the issue of the claim for inclusion of work-in-progress in the capital employed for computing relief under section 80J due to the Commissioner's order under section 263.
2. Whether the Tribunal was right in holding that no appeal lies against the Income-tax Officer's order on matters already decided by the Commissioner under section 263.

Issue-Wise Detailed Analysis:

Issue 1: Reconsideration of Work-in-Progress Inclusion

The Tribunal held that the Income-tax Officer (ITO) was not permitted to reconsider the inclusion of work-in-progress in the capital employed for section 80J relief due to the Commissioner's order under section 263. The controversy pertains to the assessment year 1972-73. Initially, the ITO included the value of work-in-progress in the capital employed. However, the Commissioner, upon reviewing the records, found the assessment erroneous and prejudicial to the interests of the Revenue. The Commissioner, in his revisional order dated November 25, 1976, explicitly decided that the value of work-in-progress cannot be included in the computation of capital employed for section 80J relief. The Tribunal affirmed that this decision by the Commissioner had attained finality after the assessee's appeal against it was dismissed as time-barred. Consequently, the ITO was bound to follow the Commissioner's directive and could not reconsider the issue afresh.

Issue 2: Appeal Against Income-tax Officer's Order

The Tribunal also addressed whether an appeal was maintainable against the ITO's order, which was passed to give effect to the Commissioner's revisional order under section 263. The Tribunal concluded that no appeal could lie against the ITO's order concerning matters already decided by the Commissioner. The Tribunal emphasized that only issues not conclusively determined by earlier appellate or revisional authorities could be agitated in an appeal against a fresh order passed by the ITO. Since the Commissioner had definitively decided the inclusion of work-in-progress and the adjustment of written-down value for extra shift allowance, these matters could not be contested again. The Tribunal upheld the view of the Commissioner (Appeals) that the appeal was not maintainable, as the ITO's order was merely a ministerial act of recalculating the relief under section 80J in accordance with the Commissioner's directions.

Conclusion:

The High Court concurred with the Tribunal's findings, affirming that the ITO was not at liberty to reconsider the inclusion of work-in-progress in the capital employed for section 80J relief due to the finality of the Commissioner's order under section 263. The court also upheld that no appeal could be maintained against the ITO's order on matters already decided by the Commissioner. The questions were answered in the affirmative, favoring the Revenue, and no costs were imposed.