2012 (9) TMI 479 - HC - Income Tax

Partial denial of deduction u/s 33AC - remanding the case back to the file of the Commissioner - Held that - As decided in CIT Vs. Ganesh Builders 1977 (3) TMI 11 - BOMBAY HIGH COURT in a case like where alternative arguments on facts are possible and varying findings can be given, it is desirable that the appellate authority gives all findings of fact and not dispose of the matter merely on a point of law. This would facilitate final disposal of the matter by the High Court, whose jurisdiction is limited merely to the question of law by the added Chap. XX-A. Here in this case the ITAT has dealt with the finding that ITAT which was hearing an appeal from the order of the Assistant Commissioner of the Income Tax has substantially dealt with the ground no.2 referred to in the first para of its order and while deciding the ground no.2 against the appellant has also set aside the finding on the aforesaid question in the appellant s favour without substantially considering the same - the order in appeal of the ITAT is hereby set aside and the matter is remanded back to the ITAT for a fresh consideration.

Summary

Issues:
1. Tribunal's decision on partial denial of deduction under Section 33AC of the Act and remanding the matter without reason.
2. Tribunal's failure to decide the legality of reassessment proceedings and remanding the matter back to the Commissioner.

Issue 1:
The High Court considered whether the Tribunal was correct in summarily setting aside the Commissioner's decision on the partial denial of deduction under Section 33AC of the Act without providing reasons. The appellant argued that the Tribunal failed to address the correctness of the Commissioner's finding that the reduction of deduction due to the appellant being a private company for 78 days was incorrect in law. The Court found merit in the appellant's argument, citing a previous judgment where it was emphasized that appellate authorities should provide all findings of fact before disposing of a matter merely on a point of law. Consequently, the High Court set aside the Tribunal's order and remanded the matter back for a fresh consideration.

Issue 2:
The second issue involved the Tribunal's failure to decide the pure question of law regarding the legality of the reassessment proceedings and instead remanding the matter back to the Commissioner. The appellant contended that the Tribunal did not address the legality of the reassessment proceedings as per Rule 27 of the Income Tax Appellate Tribunal Rules, 1963. The High Court observed that the Tribunal had not substantially considered the appellant's arguments, leading to prejudice. Citing the importance of providing all findings of fact before deciding on a point of law, the Court set aside the Tribunal's order and remanded the matter back for a fresh consideration on all points in accordance with the law.

In conclusion, the High Court found in favor of the appellant on both issues, setting aside the Tribunal's order in each instance and remanding the matters back for fresh consideration. The Court emphasized the importance of addressing all relevant facts before deciding on points of law, ensuring a fair and comprehensive review of the issues at hand.