Case Note & Summary
The Commissioner of Income Tax filed a review application (Civil Application (Review) No.8 of 2011) against an order passed in Tax Appeal No. 16 of 2007, along with a connected review application (Civil Application (Review) No.26 of 2010 in Tax Appeal No. 7/2004). The background involves the assessee, M/s. Velingkar Brothers, which filed its return of income for Assessment Year 2000-01 on 30/10/2000, claiming a deduction under Section 10B of the Income Tax Act, 1961 of Rs.1,25,48,077/-. The return declared a net loss in the mining division and profit in the EOU division, resulting in nil total income and a refund of Rs.21,779/- plus interest. The Assessing Officer accepted the return under Section 143(1) on 15.11.2000 and ordered a refund of Rs.23,515/-. Subsequently, on 28/08/2003, the Assistant Commissioner of Income Tax issued a notice under Section 148 of the Act for reassessment, alleging that the respondent's income had escaped assessment. The matter reached the High Court, which initially dismissed the appeal. The Revenue filed a review, which was also dismissed. The Revenue then appealed to the Supreme Court. The Supreme Court, by its order dated 12th August, 2016, relying on its decision in Commissioner of Income Tax, G vs. Meghalaya Steels Ltd. (377 ITR 112), held that a review is maintainable against orders passed under Section 260A of the Act. The Supreme Court set aside the earlier orders of the High Court dated 25th August, 2010 and 28th March, 2012 and remanded the matter to the High Court to decide the review petition and, if necessary, the appeal on merits. The High Court, after hearing the parties, admitted the review application and proceeded to decide it on merits. The court noted that the basic event was the filing of the return and the subsequent notice under Section 148. The High Court, following the Supreme Court's direction, allowed the review application and set aside the earlier orders, directing that the review petition be decided on merits.
Headnote
A) Income Tax - Review - Maintainability - Section 260A(7) of Income Tax Act, 1961 - The Supreme Court in Commissioner of Income Tax, G vs. Meghalaya Steels Ltd. (377 ITR 112) held that review is available against orders passed under Section 260A of the Act. The High Court, following this decision, admitted the review application and proceeded to hear it on merits after the Supreme Court set aside earlier orders and remanded the matter. (Paras 1-4) B) Income Tax - Assessment - Deduction under Section 10B - Assessment Year 2000-01 - The assessee claimed deduction under Section 10B of the Act for its EOU division. The Assessing Officer initially accepted the return under Section 143(1) and granted refund. Subsequently, a notice under Section 148 was issued for reassessment. The High Court, in the review, considered the validity of the reassessment proceedings. (Paras 4-5)
Issue of Consideration
Whether a review application under the Income Tax Act, 1961 is maintainable against an order passed under Section 260A of the Act, and whether the High Court should decide the review petition on merits after the Supreme Court set aside earlier orders and remanded the matter.
Final Decision
The High Court admitted the review application, heard the parties, and allowed the review, setting aside the earlier orders and directing that the review petition be decided on merits in accordance with law.
Law Points
- Review application maintainable under Section 260A(7) of Income Tax Act
- 1961
- Supreme Court's decision in Commissioner of Income Tax
- G vs. Meghalaya Steels Ltd. (377 ITR 112) held that review is available against orders passed under Section 260A
- High Court directed to decide review petition on merits after remand
