2015 (6) TMI 649 - HC - Income Tax

Tribunal s right in reviewing its own order on merits - Held that - If the order has been passed in exercise of powers conferred under proviso to Rule 24 of the Appellate Tribunal Rules, we find no justification to find fault with the order of the Tribunal, that too on the above stated facts. Accordingly, on the first question of law, this Court is of the considered opinion that in view of the power vested with the Tribunal under proviso to Rule 24 of the Appellate Tribunal Rules, there is no embargo on the Tribunal in reviewing its own order for the reasons supra. Therefore, this Court finds no reason to interfere with the finding of the Tribunal. Accordingly, the first substantial question of law is answered in favour of the assessee/respondent. Disallowance of losses of the carton division to be set off to arrive at business profits for the calculation of benefit u/s 80 HHC - assessee maintained separate accounts - Held that - On the 2nd substantial question of law raised, the Tribunal has considered the same on merits in the light of the decision of this Court in Rathore Brothers case (2001 (10) TMI 72 - MADRAS High Court) holding that the losses of the carton division do not have to be set off to arrive at business profits for the calculation of benefit u/s 80 HHC on the ground that the assessee maintained separate accounts and remanded the issue to the Assessing Officer for fresh consideration. In such view of the matter, this Court is of the considered view that the issue raised in the 2nd question can very well be gone into by the appropriate authority in the remand proceedings and it is not necessary for this Court to deal with the said issue for the present. - Decided against revenue.

Summary

Issues:
1. Review of Tribunal's own order on merits
2. Treatment of losses of the carton division for calculating benefit u/s 80 HHC

Issue 1: Review of Tribunal's own order on merits
The appellant challenged the Tribunal's decision to review its own order without considering the previous view taken, arguing that the Tribunal's power is limited to rectification, not review. The appellant contended that the Tribunal failed to apply the law from the IPCA Laboratories case while reviewing the order. Additionally, the appellant emphasized that both profits and losses must be considered for income computation under Section 80AB of the Income Tax Act, asserting that the decision in Rathore Brothers case cited by the Tribunal was not applicable to the present case. The High Court noted that the Tribunal recalled its order due to improper notice to the appellant, as highlighted in miscellaneous applications, and subsequently considered the matter on merits, ruling in favor of the assessee. The Court upheld the Tribunal's power to recall its order under the proviso to Rule 24 of the Appellate Tribunal Rules, finding no justification to fault the Tribunal's decision in this case.

Issue 2: Treatment of losses of the carton division for calculating benefit u/s 80 HHC
The Tribunal addressed this issue by remanding it back to the Assessing Officer for fresh consideration. The Court observed that the Tribunal's decision to remand the issue for further assessment was appropriate, especially in light of the decision in the Rathore Brothers case. The High Court concluded that the matter could be appropriately handled during the remand proceedings, indicating that there was no immediate need for the Court to delve into the issue. Consequently, the Court dismissed the appeals filed by the Revenue, affirming the Tribunal's order, and decided not to award costs in this case.

In summary, the High Court upheld the Tribunal's decision to review its own order and remand the issue concerning the treatment of losses of the carton division for further assessment. The Court found no fault with the Tribunal's actions and dismissed the appeals filed by the Revenue, emphasizing the importance of proper procedures and considerations in tax assessments under the Income Tax Act.