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Commissioner of Income-tax, North Eastern Region Vs. Saharia Krishivan Pratisthan Ltd. - Court Judgment

LegalCrystal Citation
Subject;Direct Taxation
CourtGuwahati High Court
Decided On
Case NumberCivil Rules No. 34(M) of 1979
Judge
ActsIncome Tax Act, 1961 - Sections 80J and 256; Income Tax Rules, 1962 - Rule 19A(3)
AppellantCommissioner of Income-tax, North Eastern Region
RespondentSaharia Krishivan Pratisthan Ltd.
Appellant AdvocateG.K. Talukdar and D.K. Talukdar, Advs.
Respondent AdvocateNone
Excerpt:
- - rule 'which is a matter of routine, more or less a ministerial function of arithmetical calculation, we have strong doubt that the ratio of the decision is not applicable to the instant case......the madras high court in madras industrial linings ltd. : [1977]110itr256(mad) , holding the said rule (rule 19a(3)) to be ultra vires and the determniations amounted to final decisions so far as the appellate tribunal was concerned as it held that the decisions rendered by the two high courts 'is the law of the land'. the second ground which found favour in rejecting the application for reference was that it had been determined by this high court in sakaraj tea company , that under no circumstances an order of remand could be made the subject-matter of a reference. 5. we are of the opinion that the question posed above contains a substantial question of law arising out of the order. the validity of rule 19a(3) and the jurisdiction of the tribunal to determine the vires of the rule, are.....
Judgment:

Lahiri, J.

1. This is an application under Section 256(2) of the I.T. Act, 1961 (hereinafter referred to as ' the Act '), requiring the Appellate Tribunal to state the case and to refer the question of law arising out of the order.

2. The question of law posed reads :

' Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the provisions of Rule 19A(3) cannot be applied in computing the deduction allowable u/s. 80J of the I.T. Act, 1961, and whether the Tribunal is justified in directing the ITO to recompute the deduction without reference to Rule 19A(3) of the Income-tax Rules, 1962 '

3. We have heard the learned standing counsel for the revenue. None appears on behalf of the assessee in spite of due service of notice under registered A/D. We have perused the order dated November 10, 1978, passed by the Income-tax Appellate Tribunal, Gauhati Bench, Gauhati, turning down the prayer of the revenue to refer the aforesaid question to this court under Section 256(1) of ' the Act '.

4. It is indubitable and in fact admitted in the impugned order that the question posed was a question of law and that it arose out of the order of the Appellate Tribunal. The main reasons for not making the reference are two-fold : First, the question as to the vires of the provision of Rule 19A(3) of the I.T. Rules has been considered by the Calcutta High Court in Century Enka Ltd. [1977] 107 ITR 709 and by the Madras High Court in Madras Industrial Linings Ltd. : [1977]110ITR256(Mad) , holding the said rule (Rule 19A(3)) to be ultra vires and the determniations amounted to final decisions so far as the Appellate Tribunal was concerned as it held that the decisions rendered by the two High Courts 'is the law of the land'. The second ground which found favour in rejecting the application for reference was that it had been determined by this High Court in Sakaraj Tea Company , that under no circumstances an order of remand could be made the subject-matter of a reference.

5. We are of the opinion that the question posed above contains a substantial question of law arising out of the order. The validity of Rule 19A(3) and the jurisdiction of the Tribunal to determine the vires of the rule, are all questions of law. These questions arose out of the order.

6. We hold that the question posed remains a substantial question of law arising out of the order notwithstanding the determination of the question by the High Courts, until the validity of the sub-rule is finally determined ' by this High Court in so far as the Tribunal is concerned.

7. It will be open to the parties to give a true and correct interpretation of the decision of this court in Saharaj Tea Company , and its applicability, when the reference is heard by this court. However, we are of the tentative view that the statement of law enunciated in Saharaj Tea Company , in so far as it relates to the question of remand and competence of the Tribunal to make a reference does not apply on the facts and in the circumstances of the case. Herein, a decision has been given by the Tribunal which is final and the matter has been remitted only ' to recompute the deduction without reference to Rule 19A(3) of the I.T. Rule ', which is a matter of routine, more or less a ministerial function of arithmetical calculation, We have strong doubt that the ratio of the decision is not applicable to the instant case. However, we do not propose to dwell on the point and leave it open for final determination at the hearing of the reference.

8. For the foregoing reasons, we direct the Income-tax Appellate

Tribunal, Gauhati Bench, Gauhati, to state the case and to refer the

aforesaid question of lawj to this court in accordance with the provisions

of law.

9. In the result, the petition is allowed.


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