Tribunal Allows Deduction Claim After Apex Court Ruling

The Tribunal recalled its order disallowing deduction under section 80IC of the Income Tax Act, 1961, for the assessment year 2014-15, based on a subsequent judgment by the Hon'ble Apex Court in the case of Pr.CIT, Shimla vs. M/s Aarham Softronics. The Court's new interpretation allowed for new undertakings to claim deductions, leading to a change in the law. As a result, the Tribunal found it appropriate to recall the order for a fresh hearing based on the updated legal position, allowing the Miscellaneous Application filed by the assessee.

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Issues Involved:
Recall of Tribunal's order regarding disallowance of deduction u/s 80IC of the Income Tax Act, 1961 based on subsequent judgment by Hon'ble Apex Court.

Analysis:
1. The applicant filed a Miscellaneous Application for recalling the Tribunal's order dated 28.09.2018 in relation to assessment year 2014-15, concerning the disallowance of deduction u/s 80IC of the Income Tax Act, 1961.
2. The issue involved the disallowance of deduction @ 100% of eligible profits due to substantial expansion, following the decision in the case of CIT vs Classic Binding Industries. The applicant argued that a subsequent judgment by the Hon'ble Apex Court in the case of Pr.CIT, Shimla vs. M/s Aarham Softronics reversed the earlier decision, making it a mistake apparent from the record.
3. The Tribunal noted that the Hon'ble Apex Court reversed its decision in the Aarham Softronics case, stating that the earlier judgment in Classic Binding Industries did not lay down the correct law. The new interpretation allowed new undertakings to claim deduction @ 100% of profits for the first five years and subsequently for substantial expansions as well.
4. The Tribunal acknowledged that the decision in Classic Binding Industries was overruled, making it a mistake apparent from the record. A binding decision is retrospective, and when a court interprets law differently in subsequent judgments, it discloses a mistake.
5. Considering the change in law due to the subsequent judgment, the Tribunal found it appropriate to recall the order for fresh hearing. The appeal was accordingly recalled for a new hearing based on the updated legal position.
6. The Miscellaneous Application filed by the assessee was allowed, and the order was pronounced in the Open Court on 28th March, 2019, based on the request of both counsels citing the relevant judgment of the Hon'ble Apex Court in the Pr.CIT, Shimla vs. M/s Aarham Softronics case.

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