Case Law Details
CIT Vs Tamilnadu Industrial Development Corporation Limited (Madras High Court)
The issue under consideration is whether the tribunal was right in coming to the conclusion that the Assessing Officer has not recorded his mandatory satisfaction as required under Section 14A(2) of the Act?
High Court states that the finding recorded by the Assessing Officer is sufficient and a clear indication of his compliance of the procedure under Section 14A(2), the Assessing Officer at the first instance has considered whether the claim of the assessee is correct and thereafter only has proceeded to determine the amount by adopting the procedure under Rule 8D. Therefore, so far as the assessment for the year 2011-12, is concerned, it cannot be stated to be the case where there is a failure to follow the procedure under Section 14A (2) of the Act. Having held so, we need to point out that the tribunal committed an error in not only allowing the appeal of the assessee on the said ground, but also directed the Assessing Officer to accept the figure mentioned by the assessee in their returns. If the tribunal was of the view that this figure is liable to be accepted, then the correctness of the petition should have been directed to be decided by the Assessing Officer for which purpose the matter should have been remanded. This in our view is one more error committed by the tribunal. So far as the order passed for the assessment year 2012-13 is concerned, we were also of the same view as expressed by Mr.R.Vijayaraghavan, learned Senior Counsel for the respondent/assessee and wondered as to why the revenue has preferred the appeal. However, on a closer reading of paragraph No.7.3 of the impugned order, HC find that though the tribunal directs the assessee to work out the expenditure component towards administrative and managerial aspect so that the same shall be disallowed in the computation of income, but has not issued any specific directions to the Assessing Officer as to what has to be done after the assessee files the working sheet. Therefore, to that extent the tribunal has committed an error. Hence, HC are of the considered view that the matter should be remanded for fresh consideration of the Assessing Officer in accordance with law. For the above reasons, the Tax Case Appeals are allowed and the Substantial Questions of Law are answered in favour of the revenue and the matters for both the Assessment years viz., 2011-12 and 2012-13, are remitted to the Assessing Officer for fresh consideration in accordance with law.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
These appeals have been filed by the revenue under Section 260A of the Income Tax Act, 1961 (the ‘Act’ for brevity), challenging the common order passed by the Income Tax Appellate Tribunal ‘D’ Bench, Chennai, in ITA Nos.691 & 692/MDS/2017 dated 12.07.2017, for the Assessment Years 2011-12 and 2012-13.
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