2022 (9) TMI 43 - HC - Income Tax

Review application - Entitlement to exemption u/s 10B - question whether assessee will be entitled to exemption under section 10B of the Income Tax Act for business of blending of tea being carried on by it taking aid from provisions of other statutes and the policies answered in favour of the revenue and against the assessee - HELD THAT - The question framed by the Court was argued by the counsels during hearing of the appeal and each and every issue was considered in the judgement 2021 (10) TMI 143 - CALCUTTA HIGH COURT - A review of the judgment is by no means an appeal in disguise whereby a decision is reheard and corrected, but only if an error is apparent on the face of the record. Mere repetition of the same grounds agitated in review is not maintainable when the same relief sought at the time of arguing the appeal had been negatived.

Summary

Issues:
- Review application filed in the original side of the High Court challenging a judgment passed in ITAT under section 260A of the Income Tax Act regarding exemption under section 10B for blending tea.
- Dispute over whether blending tea constitutes manufacturing for tax exemption purposes.
- Allegation of error in reformulating substantial question of law without allowing parties to make submissions.
- Reference to relevant legal precedents and conflicting judgments.
- Argument regarding ambiguity in exemption provision resolution in favor of revenue.
- Consideration of beneficial purpose of exemption provisions under sections 10A and 10B for promoting economic growth.

Analysis:
The review application before the High Court challenged a judgment passed in ITAT under section 260A of the Income Tax Act, primarily focusing on the issue of exemption under section 10B for blending tea. The applicant, a 100% Export Oriented Unit, claimed exemption under section 10B for blending tea, which was disputed by the assessing officer. The Commissioner of Income Tax (Appeals) initially ruled against the applicant, but the tribunal later granted relief. The revenue appealed the tribunal's decision, leading to the High Court's review application.

The crux of the dispute revolved around whether blending tea constituted manufacturing for the purposes of tax exemption under section 10B. The High Court reformulated a substantial question of law regarding the entitlement to exemption under section 10B for blending tea. The applicant argued that the reformulated question did not cover their principal argument regarding the definition of "manufacture" under section 10B. Reference was made to legal precedents and conflicting judgments to support the applicant's position.

The applicant further contended that ambiguity in exemption provisions should be resolved in favor of the revenue, citing relevant legal principles and the beneficial purpose of exemption provisions under sections 10A and 10B. The applicant highlighted the need for a liberal construction of exemption provisions to promote economic growth and incentivize exports.

The High Court considered the arguments presented by both parties and emphasized that a review application is not an appeal in disguise but can only be entertained if there is an error apparent on the face of the record. The Court noted that the question framed during the appeal was thoroughly argued, and all issues were considered in the original judgment. Therefore, the Court disposed of the review application, emphasizing that a mere repetition of grounds agitated during the review is not maintainable when the relief sought during the appeal was previously denied.