2014 (11) TMI 517 - HC - Income Tax

Rejection of reference application u/s 256(2) Reference for substantial question rejected Matter pending for almost seventeen years - Held that - Taking note of the order dt.26.3.2003 disposing of application filed by the revenue u/s. 256 (2) of the Act arising out from AY 1989-90 and pending consideration in DB Income Tax Reference-4/2003 and the nature of transaction are almost the same including substantial question which emerges for consideration as regard scope of Sec.80 HHC of the Act is concerned, reference application deserves acceptance thus, the reference application is accepted with a direction to make a direction to the Tribunal since the matter is pending for almost seventeen years Decided in favour of revenue.

Summary

Issues Involved:
Reference application under Section 256(2) of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal for assessment year 1987-88.

Analysis:
The reference application was filed under Section 256(2) of the Income Tax Act, 1961, against the order passed by the Income Tax Appellate Tribunal for the assessment year 1987-88. The counsel for the revenue argued that a similar reference application for the assessment year 1989-90 was rejected by the Tribunal based on its earlier order of 22.1.1996. However, a subsequent reference application for the assessment year 1989-90 was decided by the Court, directing the Tribunal to refer the substantial question of law for consideration. The Tribunal then sent its statement of case to the Court, which was registered as DB IT Reference-4/2003.

The counsel for the revenue contended that in light of the Court's order directing a reference for the assessment year 1989-90, the present reference application for the assessment year 1987-88 should be accepted. On the other hand, the counsel for the assessee argued that since the findings had been affirmed by the Tribunal and no new justifications for reference existed, the reference application for the assessment year 1987-88 should be dismissed.

After hearing both parties and considering the previous order of the Court regarding the assessment year 1989-90, which involved similar transactions and substantial questions of law related to Section 80 HHC of the Act, the Court found it appropriate to accept the reference application for the assessment year 1987-88. The Court directed the Tribunal to make a reference to the Court within two months, in line with the previous order for the assessment year 1989-90. The Registry was instructed to send a copy of the order to the Tribunal and to tag the reference with DB IT Reference-4/2003 for further proceedings.