2015 (8) TMI 52 - HC - Income Tax

Disallowance made on account of claim for deduction under Section 10A - Held that - This very issue was covered in favour of the Petitioner by the decision of the Tribunal for A.Y. 2005-2006 in the Petitioner s own case. The departmental representative before the Tribunal also accepted the position. Inspite of the agreed position between the parties, the Tribunal by the impugned order yet remands this very issue to the Assessing Officer for fresh examination/determination. The Petitioner has informed us that the appeal for the subsequent Assessment year i.e. A.Y. 2007-2008 is scheduled to come up before the Tribunal in the month of August 2015 and for A.Y 2010-2011 the date has yet to be fixed by the Tribunal. The Petitioner seriously apprehends, and in our view not unjustifiably that the Tribunal, while dealing with the Petitioner s appeal for the subsequent years may also restore the issue to the Assessing officer for de novo examination disregarding the earlier order. Thus we are constrained to exercise our extraordinary jurisdiction and set aside the impugned order of the Tribunal dated 4 March 2015 and restore it to the Tribunal for fresh consideration and disposal on merits, after addressing itself to it s earlier order passed for the A.Y 2005-2006 in respect of the Petitioners on merits

Summary

Issues:
Challenge to order of the Income Tax Appellate Tribunal regarding disallowance of deduction under Section 10A of the Income Tax Act, 1961 for Assessment Year 2009-2010.

Analysis:
The High Court noted that orders of the Tribunal can be challenged under Section 260A of the Income Tax Act, providing an alternative remedy through an appeal. However, the Court decided to exercise its extraordinary jurisdiction due to concerns over the manner in which the impugned order was passed by the Tribunal. The issue at hand was the disallowance made on account of a claim for deduction under Section 10A of the Act. The Tribunal had previously ruled in favor of the Petitioner for a different assessment year, and even the departmental representative had accepted this position. Despite this, the Tribunal remanded the issue to the Assessing Officer without providing any justification for not applying its earlier decision to the current facts. The Court emphasized that quasi-judicial authorities should not arbitrarily disregard their own previous orders without reason, as it is a fundamental expectation of any judicial authority to provide reasoning for its decisions.

The Petitioner expressed concerns that the Tribunal might continue to remand the issue to the Assessing Officer for subsequent assessment years without considering the rationale behind its earlier decisions. Therefore, the High Court set aside the impugned order and directed the Tribunal to reconsider the issue in light of its earlier decision for the Petitioner's case. The Court aimed to correct the Tribunal's approach and ensure that such lapses do not recur. The order was made absolute in terms of restoring the issue to the Tribunal for fresh disposal, specifically related to the Petitioner's claim of deduction under Section 10A of the Act.

In conclusion, the High Court intervened to rectify the Tribunal's failure to provide adequate reasoning for its decision and to ensure a fair consideration of the Petitioner's claim for deduction under Section 10A. The Court's decision aimed to uphold the principles of judicial review and proper application of legal provisions in tax matters.