2025 (8) TMI 1694 - SCH - Income Tax

Section 80AB applies to disputed assessment years; appeals remanded for fresh legal consideration and prompt final hearing

NIRMA INDUSTRIES LIMITED Versus ASSISTANT COMMISSIONER OF INCOME TAX

SC set aside the High Court's order and remanded the appeals for fresh consideration on questions of law, concluding that Section 80AB (effective ... Calculating deduction u/s 80I - whether the profits derive from the Industrial undertaking should be reduced by the claim of investment deposit u/s 32AB of the Act or not? - High Court [2004 (5) TMI 35 - RAJASTHAN HIGH COURT] relying on Vijay Industries (supra), dismissed all the appeals [2019 (3) TMI 652 - SC ORDER] HELD THAT:- As per ASG, the judgment in Vijay Industries (supra) itself holds that Section 80AB of the Income Tax Act, which was inserted with effect from 01-04-1981, applies to the assessment years in issue in three appeals and squarely supports the case of the revenue . We are of the view that we should set aside the impugned order passed by the High Court and remand the appeals for fresh consideration in accordance with law, more particularly, keeping in mind the judgment of this Court holding the field today. The impugned orders are hereby set aside and the matters are remanded to the High Court to be considered afresh on the questions of law which have been raised before us. Since these are very old appeals the High Court may take up for final hearing and decide them in accordance with law preferably within a period of six months from the date of receipt of this Order. The appeals arise from a High Court order (27.08.2007) dismissing Tax Appeals by relying on Vijay Industries v. CIT (270 ITR 175). The central question of law (as framed before the High Court) is: 'while calculating deduction under Section 80-I of the Income Tax Act whether the profits derive from the Industrial undertaking should be reduced by the claim of investment deposit under Section 32AB of the Act or not.' The Court noted that the High Court relied on Vijay Industries (supra), but that decision has been reconsidered in light of this Court's later pronouncement in 'Vijay Industries vs. Commissioner of Income Tax' (2019) 412 ITR 1. The revenue contended Section 80AB (inserted w.e.f. 01-04-1981) applies to the assessment years in issue and supports the revenue's position. The Supreme Court set aside the impugned High Court orders and remanded the matters for fresh consideration 'in accordance with law, more particularly, keeping in mind the judgment of this Court holding the field today.' The High Court was directed to hear and decide the appeals preferably within six months. Pending applications disposed of.