2009 (10) TMI 13 - HC - Income Tax

Export Realization petitioner contended that - that export realizations after one year but before the completion of two years should have taken for deduction u/s 80 HHC of the Income Tax Act Held that matter remitted to AO to decide the same strictly on merit after examining the entire evidence but by providing the reasonable opportunity to the assessee

Summary

Issues:
Admission of additional grounds in Income Tax Appeal, challenge to the order of Income Tax Appellate Tribunal, justification of rejecting additional ground, reliance on legal precedents, remittance of additional ground for investigation by Assessing Officer.

Analysis:
The judgment pertains to a writ petition filed by the Income Tax Department against an order of the Income Tax Appellate Tribunal (ITAT) concerning the admission of additional grounds in an Income Tax Appeal for the assessment year 1993-94. The ITAT had rejected the admission of an additional ground related to export realizations for deduction under section 80 HHC of the Income Tax Act. Subsequently, a miscellaneous application was filed by the assessee, and the ITAT admitted the said ground for adjudication, leading to the department challenging this decision through the instant petition.

During the proceedings, the department's counsel justified the earlier order of the ITAT, arguing that once the Tribunal had rejected to admit the additional ground, it could not be admitted again, especially when a common member was involved in both orders. On the other hand, the assessee's counsel relied on legal precedents such as NTPC v. CIT and Silpa Associates v. ITO to support the admission of the additional ground for investigation.

After hearing both parties and examining the record, the court found that the additional ground raised by the assessee was a legal issue requiring investigation by the Assessing Officer, following the precedent set in cases like CIT v. Varas International (P) Ltd. and CIT v. Toll Ram Hospital. Consequently, the court set aside the ITAT's order and remitted the additional ground to the Assessing Officer for a decision based on merit, with a directive to provide a reasonable opportunity to the assessee for presenting evidence.

In conclusion, the writ petition was finally disposed of with the direction to reexamine the additional ground, emphasizing a thorough investigation by the Assessing Officer while ensuring due process for the assessee.