1993 (7) TMI 70 - HC - Income Tax

Summary

Issues:
1. Whether directions issued by the Income-tax Appellate Tribunal were binding on the Commissioner of Income-tax (Appeals) even if contrary to the jurisdictional High Court's decision.
2. Whether the Income-tax Appellate Tribunal was correct in directing the Commissioner of Income-tax (Appeals) to allow deduction under section 35B of the Income-tax Act, 1961, for outward freight expenditure.

Analysis:
1. The case involved assessments for the years 1977-78 to 1979-80. After appeals to the Commissioner of Income-tax (Appeals), the matter reached the Income-tax Appellate Tribunal. The Tribunal, in an order dated April 10, 1984, directed the Commissioner to allow the claim under section 35B of the Income-tax Act. The Department did not seek reference on this specific issue. Subsequent appeals and directions culminated in an application under section 256(2) seeking reference on the deduction under section 35B for outward freight. The Tribunal's earlier decision on this issue was not challenged, and the Department's attempt to raise it later was deemed untimely by the Court.

2. The Court held that the Department's attempt to challenge the Tribunal's earlier decision on allowing deduction under section 35B for outward freight was not permissible at this stage. The Tribunal had already decided this issue in the initial order of April 10, 1984, and the Department's failure to challenge it then precluded them from raising it later. The Court emphasized that the Department cannot rectify its omission by belatedly seeking to contest an issue already decided by the Tribunal.

3. The petitioner argued that the Tribunal's order directing adherence to the Bombay High Court's decision instead of the Delhi High Court rendered the order a nullity. The Court disagreed, stating that while the Tribunal's decision may have been incorrect in this aspect, it did not amount to a nullity. The Court clarified that the concept of nullity was not applicable in this context. Ultimately, the Court dismissed the petition with no order as to costs, affirming the Tribunal's earlier decision on the deduction under section 35B for outward freight and rejecting the Department's belated challenge to it.