2022 (4) TMI 1188 - HC - Income Tax

Deduction u/s 80IA(4)(iii) - scope of Industrial Park Scheme, 2002 framed by the Central Government - HELD THAT - It is ex-facie apparent that the Co-ordinate bench of this Court while disposing 2020 (11) TMI 922 - KARNATAKA HIGH COURT has observed that no finding has been recorded by the Tribunal whether or not the assessee has fulfilled the conditions laid down in the scheme. Tribunal being final fact finding authority is required to record the reasons for its conclusion. It has been categorically observed that the Tribunal shall decide the matter afresh and shall after affording an opportunity of hearing to the parties, shall record a finding whether the assessee has complied with the conditions laid down in the Industrial Park Scheme, 2002 and whether the assessee is eligible to claim deduction under Section 80IA(4)(iii) - This specific direction of this Court ought to have been complied with, in stricto sensu, by the Tribunal being the last fact finding authority. The Tribunal in second round of litigation instead of analyzing the material facts available on record has remanded the matter to the Assessing Officer which cannot be approved by this Court. When a direction is issued by the jurisdictional High Court, the Tribunal is expected to comply with the same in letter and spirit. Even assuming that no factual finding is recorded either by the Ao or the CIT (Appeals), that exercise ought to have been done by the Tribunal as the final fact finding authority which has got a co-extensive power with that of the Assessing Officer and CIT (Appeals). Accordingly, remanding the matter to the Assessing Officer is not the solution to the litigation which would open a third round of litigation making the assessee to suffer and the same is nothing but harassment to both the parties, unnecessarily delaying the entire process of adjudication. Hence, without answering the substantial questions of law, we deem it appropriate to set aside the order impugned and remand the matter back to the Tribunal to consider the directions issued by this Court in letter and spirit and comply the same in an expedite manner in accordance with law.

Summary

Issues:
Challenge to order under Section 260-A of the Income Tax Act, 1961 regarding deduction under Section 80IA(4)(iii) for the assessment year 2008-09.

Analysis:
1. The appellant, a company engaged in land development, filed for deduction under Section 80IA(4)(iii) for the assessment year. The Assessing Officer disallowed the claim, but the CIT (Appeals) allowed it based on a Tribunal decision. The revenue appealed to the Tribunal, which dismissed the appeal. The High Court noted the lack of findings by the Tribunal on whether the appellant met scheme conditions, leading to the order being quashed.

2. The High Court directed the Tribunal to decide if the appellant fulfilled Industrial Park Scheme conditions for deduction under Section 80IA(4)(iii) afresh. The Tribunal remanded the matter to the Assessing Officer, which the appellant challenged. The appellant argued against the remand, citing a violation of court directions and potential for further litigation. The revenue contended that factual aspects needed assessment, supporting the remand.

3. The High Court observed the Tribunal's failure to comply with its directions to decide afresh on scheme conditions, leading to a third round of litigation. Emphasizing the Tribunal's duty as a fact-finding authority, the High Court set aside the order and remanded the matter back to the Tribunal to comply with court directions promptly.

4. The High Court stressed the importance of the Tribunal following court directions in letter and spirit, avoiding unnecessary delays and harassment to both parties. The order of remand to the Assessing Officer was deemed inappropriate, and the matter was sent back to the Tribunal for expedited compliance with court directions.

Conclusion:
The High Court set aside the Tribunal's order and remanded the matter for compliance with court directions regarding deduction eligibility under Section 80IA(4)(iii) in the assessment year 2008-09, emphasizing the need for prompt resolution and adherence to legal procedures.