9911796707
TMI Blog1998 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ginally, the Income-tax Officer rejected the claim of the assessee for investment allowance, but later on accepted the claim of the assessee by a rectification order dated April 16, 1980, stating that the assessee was eligible for investment allowance claimed which may be considered for deduction on creation of adequate reserves. In the next assessment year 1978-79 with which we are concerned, the assessee claimed carry forward and set off of the investment allowance granted by the said order. The Income-tax Officer rejected the claim of the assessee on the ground that in the year of installation, the assessee had not manufactured any of the articles specified in the Ninth Schedule to the Act. The Ninth Schedule was substituted by the Eleve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, the assessee had not manufactured any of the articles found in the Ninth Schedule to the Act. He further submitted that it is open to the Income-tax Officer to consider the request of the claim of deduction towards investment allowance in the year of grant of allowance notwithstanding the fact that the preceding Income-tax Officer had determined that the assessee was entitled to investment allowance. He relied upon a decision of the Supreme Court in the case of CIT v. Manmohan Das [1966] 59 ITR 699 and the decision of the Karnataka High Court in CIT v. Valliappa Textiles Ltd. [1988] 172 ITR 168. We hold that the view of the Appellate Tribunal that the amendment made by the Finance (No. 2) Act, 1977, enlarging the scope of section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment for the assessment year 1977-78, though initially rejected the claim of the assessee for investment allowance, by an order of rectification subsequently allowed the claim of the assessee for investment allowance. It is not disputed that the order has become final and the assessee's contention was that so long as the order operates, the assessee is entitled to take the benefit of the order and is entitled to carry forward the investment allowance provided under section 32A(3) of the Act. Under section 32A(3) of the Act, the assessee is entitled to carry forward the amount of investment allowance to the following assessment year and in the subsequent assessment year, the investment allowance can be set off against the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subsequent year has to be determined by the Income-tax Officer who deals with the assessment of the subsequent year and the decision rendered by the Income-tax Officer who has computed the loss in the previous year that the loss cannot be set off against the income of the subsequent year is not binding on the assessee. This decision of the Supreme Court has no application as it is the duty of the Income-tax Officer dealing with the assessment in the subsequent year to determine the loss of the previous year that may be set off against the profit of the subsequent year. On the other hand, when the Income-tax Officer holds the assessee would be entitled to carry forward of the investment allowance, the assessee would acquire an indefeasibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... open to the Income-tax Officer to deny the relief. The decision of the Supreme Court as well as the decision of the Karnataka High Court are to the effect that if the assessee did not get the relief it will be open to the succeeding Income-tax Officer to grant the correct relief, but the logic cannot be extended to deny the relief granted by a preceding Income-tax Officer. Therefore, the decisions of the Supreme Court as well as the Karnataka High Court are not applicable to the facts of this case. Learned counsel for the Revenue invited our attention to the decision of the Punjab and Haryana High Court in the case of CIT v. Partap Rosin and Turpentine Factory [1989] 179 ITR 414, and the decision of the Bombay High Court in the case of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon by learned counsel for the Revenue have no application to the case of orders passed by the Income-tax Officer, granting the benefit of investment allowance, out of which certain legal consequences flow. This court in the case of Seshasayee Paper and Boards Limited v. IAC of I.T. [1986] 157 ITR 342, held that even a wrong order passed by the Income-tax Officer is binding on the Department unless it is set aside by the process known to or authorised by the law. Similarly, in the case of CIT v. A. Samarapuri Chetty [1992] 195 ITR 371, this court has taken a view that even a void order has legal consequences, unless the order is set aside by the Department in the manner contemplated by the law. Those two decisions make it clear that so lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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