2007 (8) TMI 753 - HC - Income Tax

Summary

Issues involved: Interpretation of law, judicial propriety, consistency in approach of the Tribunal.

Interpretation of law: The High Court considered an appeal where the Income-tax Appellate Tribunal had ignored the law laid down by the Bombay High Court in favor of decisions rendered by the Mumbai Bench of the Tribunal. The Tribunal's decision was based on maintaining consistency in approach with co-ordinate Benches without discussing the Bombay High Court's decision.

Judicial propriety: The High Court found the Tribunal's approach erroneous as it failed to consider or distinguish the judgment of the Bombay High Court. The Court emphasized that when there is a judgment of a superior court, it should be considered by the Tribunal with clear reasons provided for its applicability or inapplicability.

Consistency in approach of the Tribunal: The High Court noted that while the Mumbai Bench of the Tribunal had considered the decision in question, the reasons for their conclusions were not clear. The Court directed that the matter be remanded to the Tribunal for a fresh consideration on merits, emphasizing the need for clear reasoning in decision-making.

Conclusion: The High Court answered the substantial question of law in the negative, setting aside the Tribunal's order and remanding the matter for fresh disposal on merits. The parties were directed to appear before the Tribunal for further directions.