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Issues:
Approval under section 80MM of the Income-tax Act 1961 for an agreement for supply of technical know-how; Rejection of approval by the Central Board of Direct Taxes; Legality and validity of the Board's orders dated May 10, 1974, and February 8, 1979; Request for reconsideration and review of the Board's decision; Opportunity to produce additional materials for approval; Challenge under article 226 of the Constitution. Analysis: The petitioner, a consulting engineering company, sought approval under section 80MM of the Income-tax Act 1961 for an agreement to supply technical know-how to a company for plant expansion. The Board initially rejected the approval, leading to a petition challenging the legality and validity of the Board's orders dated May 10, 1974, and February 8, 1979. The petitioner argued for reconsideration, claiming the existence of additional materials supporting their approval. The Court acknowledged the need for a fresh opportunity to present all relevant agreements, documents, and evidence, especially since the Board had reopened the consideration process. The Court emphasized the importance of ensuring fairness and justice by allowing the petitioner to establish the agreement's compliance with section 80MM requirements. The Court noted that the Board did not find the agreement to be collusive or abusive of tax concessions, indicating no prejudice to the Revenue if the petitioner were given a chance to satisfy the Board. Considering the gravity of the matter and the apparent genuineness of the petitioner's claim, the Court set aside the impugned orders and directed the proceedings back to the Board for a fresh consideration. The Court mandated that the Board decide on the approval application based on merits and in accordance with the law, allowing the petitioner to produce all necessary materials. The Court imposed a condition for the petitioner to pay costs as a prerequisite for availing this opportunity, ensuring accountability and compliance with the order. In conclusion, the Court allowed the petition, quashed the previous orders, and instructed the Board to reevaluate the petitioner's application for approval under section 80MM. The Court emphasized the importance of providing a fair opportunity for the petitioner to present all relevant materials and evidence for a comprehensive review by the Board. The Court's decision aimed to uphold principles of justice and procedural fairness while ensuring compliance with legal requirements and objectives under section 80MM of the Income-tax Act 1961.
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