2019 (6) TMI 1658 - HC - Income Tax

High Court overturns Tribunal decision, remands for fresh consideration. Issues open for interpretation, particularly Section 80P(2)(a)(i).

The High Court allowed the appeal, overturning the Tribunal's decision and remanding the matter for fresh consideration. The Court emphasized that all ... Deduction u/s 80P - whether Tribunal is correct in denying the claim for deduction u/s 80P(2)(a)(i) of the Act by following their non-existent order dated 08.06.2018? - HELD THAT:- We need not labour much to decide the substantial questions of law, as a serious error has crept in in the impugned order presumably due to oversight. The Tribunal relied upon an order for the assessment year 2014-15 and held that the appeal does not merit consideration. Unfortunately, it is the very same appeal which was to be decided by the Tribunal because, the said appeal was disposed of earlier by a single member bench vide order. This order was set aside by the jurisdictional bench of the Tribunal by order [2018 (1) TMI 1670 - ITAT CHENNAI] and accordingly, the appeal stood fixed for hearing. Unfortunately, neither the assessee’s authorised representative, nor the Department's representative brought to the notice of the Tribunal that it is the very same appeal which has to be heard on merits. On the contrary, it appears that both of them had referred to the earlier order dated 11.01.2018 in the same appeal which stood recalled by order dated 08.06.2018. The impugned order passed by the Tribunal has to be necessarily set aside and the appeal should be remanded to the file of the Tribunal to be heard and decided afresh. Issues:1. Interpretation of Section 80P(2)(a)(i) of the Income-tax Act, 1961 for deduction claims.2. Correctness of Tribunal's order and appeal consideration.Analysis:Issue 1: Interpretation of Section 80P(2)(a)(i) for deduction claimsThe appellant raised substantial questions of law regarding the denial of deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961. The first question raised was whether the Tribunal correctly denied the deduction claim by relying on a non-existent order dated 08.06.2018. The second question pertained to whether the provisions of Section 80P(2)(a)(i) allow for deduction related to interest income earned from advances to staff/employees and savings bank accounts. Additionally, the third question revolved around the interpretation of the appellant society's bye-laws and the MSCS Act, 2002 in relation to Section 80P(2)(a)(i) for determining the correctness of the deduction claim in the computation of taxable income.Issue 2: Correctness of Tribunal's order and appeal considerationUpon hearing the arguments from both parties, it was found that a serious error had occurred in the Tribunal's order due to oversight. The Tribunal mistakenly referred to an earlier order in a different appeal, leading to the dismissal of the present appeal. However, it was clarified that the present appeal was supposed to be decided on its merits as the earlier order had been recalled by a jurisdictional bench. As a result, the High Court set aside the Tribunal's order and remanded the matter for fresh consideration, emphasizing that all issues are left open for further examination.In conclusion, the High Court allowed the appeal, overturned the Tribunal's decision, and directed a fresh hearing to address the issues raised by the appellant regarding the deduction claim under Section 80P(2)(a)(i) of the Income-tax Act, 1961.