9911796707
TMI Blog2012 (9) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(1) of the Income Tax Act, 1961 (hereinafter called the Act). Subsequently noticing that the income chargeable to tax has escaped assessment within the meaning of Section 147 of the Act, notice was issued under Section 148. The issue that arose was regarding the deduction claimed while computing the deduction under Section 80 HHC more specifically the deduction claimed with respect to the profit on sale of Duty Entitlement Pass Book (DEPB) (hereinafter referred to as DEPB). The assessing authority found that pursuant to the amendment brought in, in the year 2005 every assessee having turnover exceeding Rs.10 crores, for claiming entitlement of profits on sale of DEPB under Section 80 HHC; has to satisfy two conditions regarding av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lidity of the retrospective amendment. The ground regarding the inclusion of the entire sale value was considered on facts and it was held that the income from DEPB is accounted by the appellant only at the time of actual sale of DEPB licence. 3. The assessee was then before the Income Tax Appellate Tribunal and the appeal was rejected by a short order produced as Annexure-C. We find from the order that the issue raised by the assessee and considered by the Tribunal was only with respect to the reopening of the assessment under Section 147. Whether the assessing officer was entitled to withdraw the deduction in respect of DEPB incentive on the basis of the subsequent amendment. The Tribunal held that since in a similar situation the jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the assessees before the Supreme Court, was the difference between the sale proceeds and the face value of DEPB. The Special Bench of the Tribunal at Mumbai held that the cost of acquiring DEPB is not nil because the person acquires it by paying customs duty on the import content of the export product and the DEPB which accrues to a person against export has a cost element attached to it. The Supreme Court affirmed this view. When DEPB is sold by a person, hence, his profit on transfer of DEPB would be the sale value of the DEPB, less the face value. In addition to the fact that the question of law framed by the assessee does not arise from the order of the Tribunal, we notice that the first appellate authority has clearly held in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of the scope of Section 67 in the Income Tax Act, 1922 arose in K.S.Venkataraman & Co. Vs. State of Madras (1966) 2 SCR 229. Section 67 was a bar to the maintainability of a suit against assessments made under the Act. Whether the restriction applied in the event of the assessing officer giving effect to an ultra vires provision; was the question dealt with. After noticing the provisions empowering the Income Tax officers to make assessments and the two tier appeal respectively before the Assistant Appellate Commissioner and ITAT, the Supreme Court held: "Up to this stage all the three authorities are the creatures of the Act and they function thereunder. They cannot ignore any sources of income on the ground that the relevant provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature arises out of the Tribunal's order? As the Tribunal is a creature of the statute, it can only decide the dispute between the assessee and the Commissioner in terms of the provisions of the Act. The question of ultra vires is foreign to the scope of its jurisdiction. If an assessee raises such a question, the Tribunal can only reject it on the ground that it has no jurisdiction to entertain the said objection or decide on it. As no such question can be raised or can arise on the Tribunal's order, the High Court cannot possibly give any decision on the question of the ultra vires of a provision. At the most the only question that it may be called upon to decide is whether the Tribunal has jurisdiction to decide the said question. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
