2014 (6) TMI 100 - AT - Income Tax

Tribunal reconsiders case on section 80IB disallowance, influenced by High Court ruling, prioritizing fairness and legal standards.

The Tribunal allowed the assessee's Misc. Application for re-examination of the case concerning the disallowance under section 80IB for A.Y. 2006-07. The ... Disallowance of deduction u/s 80IB of the Act – Factory license issued on 19/05/04 – Manufacturing activity not started on or before 31/03/04 – Held that:- The assessee applied for license in March 2004 but was granted in the month of April 2004 - Following Commissioner of Income-tax Versus Jolly Polymers [2012 (4) TMI 398 - GUJARAT HIGH COURT] - the authorized representative of the assessee was given to understand that the appeal shall be sent back to the file of AO for the purpose of verifying as to whether the appellant had actually moved an application for obtaining Factory's License on or before 31/03/04 and on that basis, the hearing came to be concluded – as per the decision the assessee is fully entitled to gent deduction u/s 80IB of the Act – thus, the miscellaneous application is allowed – Decided in favour of Assessee. Issues:Appeal against ITAT order dismissing the assessee's appeal for A.Y. 2006-07; Errors in Tribunal's order; Disallowance u/s 80IB; Consideration of factual findings; Jurisdictional High Court decision; Re-examination of the case; Review of decision under IT Act.Analysis:The Misc. Application filed by the assessee challenged the Tribunal's order dismissing the appeal against the disallowance u/s 80IB for A.Y. 2006-07. The appellant contended that errors in the Tribunal's order were apparent, specifically regarding the belated issuance of the Factory's License and its impact on the deduction u/s 80IB. The appellant cited the decision of the Hon'ble Gujarat High Court in a similar case to support their claim that the application for the license was made before the crucial date, entitling them to the deduction. The Tribunal was urged to reconsider the case in light of this decision. The appellant argued that the Tribunal went beyond the grounds of appeal and factual findings, violating principles of natural justice by not affording an opportunity to rebut. The appellant relied on a Supreme Court decision emphasizing the importance of considering all facts and evidence before reaching a conclusion.The Tribunal, after considering the contentions, acknowledged that the appellant had applied for the license before the critical date, which was granted subsequently. In light of the Hon'ble Gujarat High Court decision, the Tribunal found it necessary to re-examine the case. The Tribunal allowed the appellant's Misc. Application, directing the case to be fixed before the regular Bench for further consideration. The decision to re-examine the case was based on the legal precedent and the need to ensure a fair and thorough assessment of the facts. The Tribunal's decision to allow the Misc. Application indicated a willingness to review the matter in line with the legal principles and relevant judicial decisions. The re-examination was deemed necessary to ensure justice and adherence to legal standards.In conclusion, the Tribunal's decision to allow the Misc. Application for re-examination of the case was a significant development in the ongoing dispute over the disallowance u/s 80IB. By considering the legal precedent and the appellant's arguments, the Tribunal demonstrated a commitment to fairness and thoroughness in adjudicating the matter. The re-examination process would provide an opportunity to address the errors in the previous order and ensure a just outcome based on a comprehensive review of the facts and relevant legal principles.