2013 (10) TMI 322 - HC - Income Tax

Remanding the issue of eligibility of the Assessee to claim deduction under Section 10A/80-IB(8A) of the Act to the Assessing officer for his fresh consideration Held that - Remand order is not sustainable as for no reason, the matter is remanded to the Assessing Officer; that the Assessing Officer had no role to play as this was a case involving transfer pricing and it was scrutinized by the Dispute Resolution Panel comprising of three Commissioners - Order passed by the assessing authority is following the directions issued by the Dispute Resolution Panel; that the remand order is clearly not sustainable - The order of the Tribunal is set aside and is remanded to the Tribunal for examination of the appeal of the assessee on merits Decided in favor of Assessee.

Summary

Issues:
Appeal against remand order under section 260A of the Income Tax Act, 1961 - Eligibility for deduction under Section 10A/80-IB(8A) of the Act - Interim orders and stay - Application for vacating interim order - Tribunal's remand order challenged - Role of Assessing Officer in transfer pricing case.

Analysis:
The High Court heard an appeal under section 260A of the Income Tax Act, 1961, challenging a remand order by the Income Tax Appellate Tribunal related to the assessment year 2007-08. The Tribunal had remanded the matter to the assessing authority to re-examine the eligibility of the Assessee for deduction under Section 10A of the Act based on certain Judgments cited by the assessee. The court admitted the appeal to consider substantial questions of law regarding the Tribunal's decision to remand the issue. The court examined whether the remand was justified solely due to the assessing authority not considering the judgments relied upon by the assessee.

The court noted that interim stay orders had been granted previously, and an application was filed to vacate the interim order. The Assessing Officer had issued a letter to the assessee demanding outstanding tax, leading to the revenue's application to vacate the interim order. Both parties agreed that the remand order was not sustainable, as the Assessing Officer had no role in the matter concerning transfer pricing, which had been reviewed by the Dispute Resolution Panel. Consequently, the court allowed the appeal, setting aside the Tribunal's order and remanding the matter for a fresh examination on the merits.

As a result of allowing the appeal and setting aside the Tribunal's order, all previous interim orders were dissolved. The Tribunal was directed to expedite the hearing of the appeal, now remanded for a thorough examination on its merits. The court did not address the substantial questions of law raised in the appeal, as they were no longer relevant following the remand order being set aside and the matter being sent back to the Tribunal for reconsideration.