1990 (4) TMI 3 - HC - Income Tax

Summary

Issues:
1. Scope of judicial review in respect of an order passed by the Board under section 80-O of the Income-tax Act, 1961.
2. Examination of the Board's impugned order refusing to approve an agreement based on the activities covered by section 80HHB.
3. Interpretation of section 80HHB and its applicability to agreements entered into before its introduction.
4. Analysis of the word "any" in section 80HHB(5) and its implications on the relief granted under the section.
5. Direction to set aside the Board's order and re-examine the application in the context of section 80-O.

Detailed Analysis:
1. The High Court agreed with the Delhi High Court's observation that the scope of judicial review concerning an order passed by the Board under section 80-O of the Income-tax Act is not that of an appeal. The court emphasized that the Board's power to approve or refuse an agreement indicates legislative intent to give the Board a role in interpreting section 80-O. Judicial interference is warranted only if the Board's understanding of the section contains an error of law evident on the record.
2. The court scrutinized the Board's order that rejected approval of an agreement based on activities falling under section 80HHB rather than section 80-O. It highlighted that unless it can be established that services covered by section 80HHB can never fall under section 80-O, the Board's decision may be deemed to have a legal error justifying intervention.
3. The judgment delved into the introduction of section 80HHB and its inapplicability to agreements predating its enactment. It noted that the agreement in question was executed before the section came into force, rendering the Board's refusal to approve the agreement on the grounds of section 80HHB erroneous.
4. The court analyzed the word "any" in section 80HHB(5) and its significance in restricting relief under other sections of Chapter VI-A under heading C. It rejected the Revenue's argument that "any" encompassed all assessment years, emphasizing that the relief under section 80HHB was intended for specific assessment years.
5. Finally, the court directed setting aside the Board's order and instructed a reevaluation of the application solely in the context of section 80-O. It mandated the Board to conclude the review within six months for expediency, ultimately disposing of the petition without costs.