2022 (4) TMI 1188 - HC - Income Tax

High Court remands Tribunal order on deduction eligibility under Section 80IA(4)(iii) for 2008-09 assessment.

The High Court set aside the Tribunal's order and remanded the matter for compliance with court directions regarding deduction eligibility under Section ... Deduction under Section 80IA(4)(iii) of the Income-tax Act - Industrial Park Scheme, 2002 compliance - Duty of the Tribunal as final fact-finding authority to record reasons - Obligation to follow directions of the High Court - Remand to Assessing Officer versus adjudication by the TribunalDeduction under Section 80IA(4)(iii) of the Income-tax Act - Industrial Park Scheme, 2002 compliance - Duty of the Tribunal as final fact-finding authority to record reasons - Whether the Tribunal complied with this Court's directions by recording findings on compliance with the Industrial Park Scheme, 2002 and on entitlement to deduction under Section 80IA(4)(iii) instead of remanding the matter to the Assessing Officer. - HELD THAT: - The Court observed that in its earlier order disposing ITA No.3/2015 it had directed the Tribunal to decide afresh and to record a finding whether the assessee complied with the conditions in the Industrial Park Scheme, 2002 and thus whether the assessee was eligible for deduction under Section 80IA(4)(iii). The coordinate Bench found that the Tribunal, as the final fact-finding authority vested with co-extensive powers, failed to fulfil that obligation and instead remanded the matter to the Assessing Officer without recording the requisite reasons or findings. Such remand in the face of specific directions was held to be inconsistent with the duty of the Tribunal to record determinate findings and amounted to non-compliance with the High Court's directions; remanding to the Assessing Officer would perpetuate further rounds of litigation and cause harassment to the parties. The Court therefore concluded that the Tribunal's approach could not be approved and that the Tribunal should have complied with the earlier directions in letter and spirit. [Paras 7, 8]The Tribunal's remand to the Assessing Officer was set aside for non-compliance with this Court's earlier direction that the Tribunal itself record findings on compliance with the Industrial Park Scheme and entitlement to deduction under Section 80IA(4)(iii).Obligation to follow directions of the High Court - Remand to Assessing Officer versus adjudication by the Tribunal - Disposition of the appeal and the further course to be followed by the Tribunal in light of the Court's earlier directions. - HELD THAT: - The Court exercised its supervisory jurisdiction to set aside the Tribunal's order dated 10.08.2021 and remanded the matter back to the Tribunal with a clear mandate to consider and comply with the directions issued by this Court in ITA No.3/2015 dated 09.11.2020 in letter and spirit. The remand is specifically to the Tribunal (not to the Assessing Officer) to perform the adjudicatory function directed earlier, and to do so expeditiously and in accordance with law. All rights and contentions of the parties were left open for determination by the Tribunal on compliance with the directions. [Paras 9]Order dated 10.08.2021 of the Tribunal is set aside and the matter is remanded to the Tribunal to consider and comply with this Court's directions dated 09.11.2020; rights and contentions of the parties remain open.Final Conclusion: The order of the Income Tax Appellate Tribunal dated 10.08.2021 in ITA No.923/Bang/2013 (AY 2008-09) is set aside; the matter is remanded to the Tribunal to consider and comply in letter and spirit with this Court's directions dated 09.11.2020 regarding recording of findings on compliance with the Industrial Park Scheme, 2002 and entitlement to deduction under Section 80IA(4)(iii), to be done expeditiously, with all rights and contentions left open. Issues:Challenge to order under Section 260-A of the Income Tax Act, 1961 regarding deduction under Section 80IA(4)(iii) for the assessment year 2008-09.Analysis:1. The appellant, a company engaged in land development, filed for deduction under Section 80IA(4)(iii) for the assessment year. The Assessing Officer disallowed the claim, but the CIT (Appeals) allowed it based on a Tribunal decision. The revenue appealed to the Tribunal, which dismissed the appeal. The High Court noted the lack of findings by the Tribunal on whether the appellant met scheme conditions, leading to the order being quashed.2. The High Court directed the Tribunal to decide if the appellant fulfilled Industrial Park Scheme conditions for deduction under Section 80IA(4)(iii) afresh. The Tribunal remanded the matter to the Assessing Officer, which the appellant challenged. The appellant argued against the remand, citing a violation of court directions and potential for further litigation. The revenue contended that factual aspects needed assessment, supporting the remand.3. The High Court observed the Tribunal's failure to comply with its directions to decide afresh on scheme conditions, leading to a third round of litigation. Emphasizing the Tribunal's duty as a fact-finding authority, the High Court set aside the order and remanded the matter back to the Tribunal to comply with court directions promptly.4. The High Court stressed the importance of the Tribunal following court directions in letter and spirit, avoiding unnecessary delays and harassment to both parties. The order of remand to the Assessing Officer was deemed inappropriate, and the matter was sent back to the Tribunal for expedited compliance with court directions.Conclusion:The High Court set aside the Tribunal's order and remanded the matter for compliance with court directions regarding deduction eligibility under Section 80IA(4)(iii) in the assessment year 2008-09, emphasizing the need for prompt resolution and adherence to legal procedures.