2018 (8) TMI 1423 - HC - Income Tax

Disallowance u/s 14A - the learned Tribunal has recalled its earlier order and has directed re-adjudication of the issue - Held that - In the Appeal /Appeals, rectification applications were preferred and the same are allowed and the earlier order passed by the learned Tribunal is recalled and the learned Tribunal has directed re-adjudication of the issue of disallowance under Section 14 of the Income Tax Act, and the same cannot be said to be erroneous and /or the same does not call for any interference of this Court in exercise of powers under Article 226 of the Constitution of India. The issue would be at large and ample opportunity will be given to the revenue to put forward their case. Not required to be interfered with by this Court in exercise of powers under Article 226 of the Constitution of India. - Decided against the revenue.

Issues:
1. Review of order by the learned Tribunal under Sub Section (2) of Section 254 of the Income Tax Act.
2. Recalling of earlier order by the learned Tribunal for re-adjudication of disallowance under Section 14A of the Income Tax Act.
3. Legal validity of the impugned common order passed by the learned Tribunal.
4. Technical objections raised by the petitioner regarding the order.

Analysis:

Issue 1: Review of order by the learned Tribunal under Sub Section (2) of Section 254 of the Income Tax Act
The petitioner, the revenue, challenged the decision of the learned Tribunal to recall its earlier order under Sub Section (2) of Section 254 of the Income Tax Act. The petitioner contended that the Tribunal erred in exercising its powers to recall the order, arguing that the original order was passed after due consideration of all material facts. The petitioner claimed that the recall amounted to a review of its own order, which was not permissible under the law.

Issue 2: Recalling of earlier order for re-adjudication of disallowance under Section 14A of the Income Tax Act
The learned Tribunal recalled its earlier order directing re-adjudication of the issue of disallowance under Section 14A of the Income Tax Act. This decision was challenged by the revenue through the present Special Civil Applications under Article 226 of the Constitution of India. The Tribunal's action was based on the contention that there was a mistake apparent on the record in the earlier order, justifying the recall and the need for fresh consideration of the issue.

Issue 3: Legal validity of the impugned common order
The High Court, after hearing arguments from both parties, held that the impugned common order passed by the learned Tribunal did not warrant interference under Article 226 of the Constitution of India. The Court found the petitioner's objections to be overly technical and concluded that the Tribunal's decision to recall the order for re-adjudication was not erroneous. The Court emphasized that the issue at hand required a fresh assessment and that ample opportunity would be provided for the revenue to present its case.

Issue 4: Technical objections raised by the petitioner
The petitioner raised technical objections regarding the Tribunal's decision to recall the order and sought to challenge the same through the present petitions. However, the Court dismissed these objections, stating that the issue required a broader consideration and that the Tribunal's decision to recall the order for re-adjudication was justified. The Court ultimately ruled that the petitions failed to establish grounds for interference and accordingly dismissed them.

In conclusion, the High Court dismissed the petitions filed by the revenue challenging the learned Tribunal's decision to recall its earlier order for re-adjudication of the issue of disallowance under Section 14A of the Income Tax Act. The Court found no legal basis to interfere with the Tribunal's decision, emphasizing the need for a fresh assessment of the issue and providing ample opportunity for the revenue to present its case.

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