Orissa High Court
Commissioner Of Income-Tax vs Bharat Saw Mill on 21 February, 1992
Equivalent citations: [1992]198ITR553(ORISSA)
Author: A. Pasayat
Bench: A. Pasayat
ORDER
--Tribunal noticed difference in views among High Courts--However decided in favour of the assessee--Not justified--Matter remanded for disposal on merits.
HELD :
Noticing that several High Courts were having different views on the self-same question, it was held by the Tribunal that the order is not prejudicial to the interest of the revenue. The Tribunal, referred to the decision of the Supreme Court in CIT v. J. K. Hosiery Factory (1986) 2159 ITR 85 (SC), and held that two interpretations being possible, the interpretation that is favourable to the assessee was to be adopted. The Tribunal thus did not decide the case on merits and only noticing the cleavage of judicial opinion, decided in favour of the assessee. The Tribunal should decide the case on merits taking into consideration diverse views and arrive at a decision on its own.
APPLICATION :
Also to current assessment years.
Income Tax Act 1961 s.254 JUDGMENT
1. On being moved under Section 256(1) of the Income-tax Act, 1961 (in short, " the Act "), the Income-tax Appellate Tribunal, Cuttack Bench, Cuttack (in short, " the Tribunal "), has referred the following question to this court :
" Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that the Commissioner of Income-tax was not justified in treating the order of the Income-tax Officer as erroneous and prejudicial to the interests of the Revenue and thereby cancelling the order of the Commissioner of Income-tax passed under Section 263 of the Income-tax Act, 1961 ?"
2. Messrs. Bharat Saw Mill, Baripada (hereinafter referred to as " the assessee "), was assessed to tax by the Income-tax Officer, Baripada, for the assessment year 1983-84. The Commissioner of Income-tax being of the view that the assessment made for the said year was erroneous in so far as it is prejudicial to the interests of the Revenue, because there has been over-allowance on unabsorbed depreciation, set aside the assessment in exercise of his power under Section 263 of the Act. The matter was carried in appeal before the Tribunal. Noticing that several High Courts were having different views on the self-same question, it was held that the order is not prejudicial to the interests of the Revenue. The Tribunal referred to the decision of the Supreme Court in CIT v. J. K. Hosiery Factory [1986] 159 ITR 85, and held that two interpretations being possible, the interpretation that is favourable to the assessee was to be adopted. With this conclusion, the order of the Commissioner of Income-tax was set aside. Thereafter, on being moved, this reference has been made.
3. We find from the order of the Tribunal that it did not decide the case on merits and only noticing the cleavage of judicial opinion, decided in favour of the assessee. In our view, the Tribunal should decide the case on merits taking into consideration diverse views and arrive at a decision on its own. Without answering the question referred to us, we direct disposal of the appeal on merits by the Tribunal.