2008 (1) TMI 592 - HC - Income Tax

Exemption - whether the assessee is entitled for exemption under section 10(15)(iv)(c) of the Act? The exemption u/s 10(15)(iv)(c) of the Income Tax Act, 1961 claimed by the assessee was allowed. Appeal filed by the department was dismissed by the Tribunal. Thereafter, miscellaneous application were filed on the ground that the assessee had paid interest under section 10(15)(iv)(c) of the Act without obtaining the necessary approval from the concerned authority and that the finding of the Tribunal that the assessee had obtained the approval required reconsideration. The Tribunal rejected the application on the ground that there is no apparent mistake. Held that- there was no apparent mistake to be rectified in the order, since the department had failed to show whether any argument had taken place at the time of hearing of the appeal before the Tribunal that no approval for exemption was taken as required u/s 10(15)(iv)(c) of the Act.

Summary

Issues:
1. Whether the Appellate Tribunal was right in rejecting the miscellaneous application concerning approval under section 10(15)(iv)(c) of the Act.
2. Whether the assessee is entitled to exemption under section 10(15)(iv)(c) of the Act.

Analysis:
1. The primary issue in this case revolves around the rejection of a miscellaneous application by the Tribunal. The Revenue moved the application after their appeal was dismissed, claiming that no approval was obtained for granting exemption to the assessee under section 10(15)(iv)(c) of the Act. The Tribunal, however, rejected the application, stating that there was no apparent mistake in their previous decision. The Tribunal emphasized that the absence of approval being communicated to the Assessing Officer does not warrant rectification of their order. Instead, they suggested that the Assessing Officer should take necessary steps to address the issue rather than seeking rectification through the Tribunal.

2. The crux of the matter lies in whether the assessee is eligible for exemption under section 10(15)(iv)(c) of the Act. The Tribunal's decision to dismiss the Revenue's appeal was based on the lack of evidence or arguments presented by the Departmental representative regarding the absence of required approval at the time of the appeal hearing. Without any concrete proof or assertion during the appeal process, the Tribunal found no merit in the Revenue's claims. Consequently, the appeals were ultimately dismissed, affirming the Tribunal's initial decision.

In conclusion, the judgment highlights the importance of presenting all relevant facts and arguments during the appeal process. It underscores the need for proper documentation and communication of approvals to avoid disputes regarding exemptions under the Income Tax Act. The decision emphasizes the role of the Assessing Officer in addressing such issues internally rather than seeking rectification through the Tribunal without substantial grounds.