1984 (4) TMI 133 - AT - Income Tax

Summary

Issues:
1. Interpretation of section 80J of the Income-tax Act, 1961 and its applicability.
2. Constitutional validity of the amendment of section 80J.
3. Jurisdiction of the Tribunal to decide on the amended section.
4. Procedure to be followed by the Tribunal regarding section 80J computation.
5. Difference of opinion among the members of the Tribunal on the appropriate course of action.

Analysis:
1. The appeal was made against the order of the Commissioner (Appeals) who dismissed the appeal against the Income Tax Officer's order. The main contention was regarding the exclusion of liabilities in the computation of capital employed for relief under section 80J post an amendment. The departmental representative argued that the amended section should be followed based on decisions of High Courts. The Tribunal held that the amended section is applicable, and authorities were justified in excluding liabilities for relief under section 80J, confirming the assessment order.

2. The Accountant Member disagreed with the Judicial Member's view and cited the practice of sending back matters regarding section 80J for recomputation post a decision by the Supreme Court or High Court. The Accountant Member emphasized the procedural aspect and referred to the Gujarat High Court's decision to save time and cost. It was decided to set aside the computation of deduction under section 80J and restore the matter for fresh decision post the Supreme Court or Madras High Court's decision.

3. A Third Member was appointed to resolve the difference of opinion. The issue was whether to vacate the findings of the Commissioner (Appeals) and direct the ITO to recompute the capital base post the Supreme Court or Madras High Court's decision on the retrospective amendment to section 80J. The Third Member held that the decision in a similar case favored vacating the findings and awaiting the final outcome of the court decision, emphasizing the balance of convenience.

4. The Third Member also noted that the decisions of High Courts on the amended provisions were not considered in the previous case. However, the focus was on whether to rely on the Tribunal's earlier decision. The Third Member refrained from delving into the merits of the case and suggested that the matter be decided by the regular Bench post the court's decision, ensuring no prejudice to the revenue's interests.

5. The matter was to be sent back to the regular Bench for final disposal in line with the majority opinion, emphasizing the importance of awaiting the Supreme Court's decision on the retrospective amendment to section 80J for a conclusive resolution.