Tribunal can set aside the order of CIT Appeal only after considering the evidence and material on record

SUMMARY OF CASE LAW

No doubt it is well within the power of the Tribunal to set aside the order of the Commissioner (Appeals) for fresh adjudication in accordance with the provision; such order can be made when the Tribunal, after considering the evidence and material on record, comes to the conclusion that the order under appeal is erroneous or is based on insufficient material or that some fresh evidence has to be considered or there has been a failure of natural justice prejudicing the appellant.

CASE LAW DETAILS

Decided by: ITAT, BENCH `C’ CHENNAI (THIRD MEMBER), In The case of: ITO  v. Sicgil India Pvt. Ltd, Appeal No.: Sicgil India Pvt. Ltd, Decided on: March 26, 2009

RELEVENT PARAGRAPH

This appeal came before me as Third Member to express my opinion on the following question:-

“Whether in view of the facts and circumstances, the issue relatable to computation of deduction under section 801B, the order of the Id. CIT(A) could be reversed and that of the Assessing Officer could be restored or matter can be set aside and remitted back to the file of the Assessing Officer for reconsideration?

2. I have heard the rival submissions. The assessee claimed deduction under section 80IB amounting to Rs.69.54,954/ – in respect of Goa unit from the profits of business. This amount was claimed before set off of carry forward losses of Rs.18,06,402/ – relating to the immediately preceding

“assessment year. The Assessing Officer allowed it after setting off the losses.

3. Before the Commissioner( Appeals) it was claimed that the earlier loss of Rs.18,06,402/ – in respect of the Goa unit was fully set off against other business income of the assessee in the assessment year 2001-02. It was stated that while restricting the assessee’s claim the Assessing Officer might have been guided by the provision of section 80!A(7) as it stood prior to 1-4-2000. Since section 80IB does not contain any provision for notionally treating the eligible business as the only business of the assessee, such action of the Assessing Officer should be reversed and the claim of the assessee may be accepted.

4. The Commissioner( Appeals) directed the Assessing Officer to carry out the necessary verification with regard to the claim. It was held that if the loss of Rs. 18,06,402/- is found to have been fully set off in the assessment year 2001-02, the Assessing Officer would have no other option but to allow the assessee’s claim under section 80IB in full. Against this order the Revenue filed appeal before the Tribunal.

5. This issue now stands covered by the order of the Special Bench of the Tribunal rendered in the case of ACIT vs. Goldmine Shares and Finance(P) Ltd., 113 ITD 209 (Ahd)(SB). In this case the Special Bench has held that in view.vof the specific provision of section 80IA(5) profit from eligible business for the purpose of determination of quantum of deduction under section 80IA has to be.computed after deduction of notional brought forward losses and depreciation of eligible business, even though they have been allowed to be set off against other.income in earlier years. While adjudicating this issue the learned Judicial Member followed |he decision of the Special Bench and has held that the eligible deduction under section 80IB for the assessment year under consideration has to be computed after setting off of the loss of the Goa unit for the earlier assessment year 2001- – 02, whereas the learned Accountant Member has held that the Commissioner( Appeals) ought to have appreciated that what has to be done under section 80IA(5) has to be done in the context of section 80IB also. The eligible deduction under section 80IB has to be worked out after setting off the loss of the Goa unit for the assessment year 2001-02. As the Commissioner( Appeals) has not appreciated this provision of law he remitted this issue to the file of the Assessing Officer to consider the same de novo in accordance with law.

8. It hath been well said declared Lord Coke: ‘INTEREST REPUBLICA UT SIT FINIS LITUM’. It concerns the State that law suits be not protracted, otherwise great oppression might be done under the colour and pretence of law. No doubt it is well within the power of the Tribunal to set aside the order of the Commissioner( Appeals) for fresh adjudication in accordance with the provisions of law. Such order can be made when the Tribunal, after considering the evidence and material on record, comes to the conclusion that the order under appeal is erroneous or is based on insufficient material or that some fresh evidence has to be considered or there has been a failure of natural justice prejudicing the appellant. Adverting to the facts of the present case I find that none of these conditions is present requiring restoration of the matter to the file of the Assessing Officer. I find that the issue is squarely covered by the decision of the Special Bench. Therefore in my opinion restoring the issue to the file of the Assessing Officer is not justified. I agree with the view taken by the learned Judicial Member.

10. The matter will now go before the regular Bench for deciding the appeal in accordance with the opinion of the majority.

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