Case: Titanor Components Limited Vs. Commissioner of Income Tax

by calling report from such Assessing Officer. The said provision permits the appellate authority to grant opportunity of hearing to the Assessing Officer. Sub-section (3) requires the appellate authority to pass an order, in writing, admitting the claim of the assessee or then rejecting his claim if it is not so satisfied. Sub-section (4) states that when the claim is admitted, the appellate authority may dispose of the relevant case without awaiting the final decision on the question of law in the other case and the assessee is not entitled to raise, in relation to that case, such question of law in appeal before any appellate authority or the High Court or the Supreme Court.8. Thus, if in the present circumstances the claim of the assessee/present appellant was accepted by the ITAT, its appeals could have been disposed of in terms of Section 158(4)(a) and he would not have been required to file Appeals before this Court as contemplated by clause (b) of sub-section (4). The provisions clearly show that the ITAT is required to pass an order after ascertaining the claim made by the assessee about other case. In the facts before this Court, the ITAT has overlooked the provisions of sub-section (2)(3)(4) and (5) of Section 158A totally and has considered only the following portion of Section 158A(1):a declaration in the prescribed form and verified in the prescribed manner, that if the [Assessing] Officer or the appellate authority, as the case may be, agrees to apply the in the relevant case the final decision on the question of law in other case, he shall not raise such question of law in the relevant case in appeal before any appellate authority or [in appeal before the High Court under section 260A or in appeal before the Supreme Court under section 261].9. Thus salutary provisions made by the Parliament to put an end to unnecessary litigation and to reduce number of cases required to be followed in letter and spirit, have been defeated in the present matter. The word agrees used in Section 158A(1) does not mean that the Assessing Office or the appellate authority has been given any unbridled authority not to agree. The subsequent provisions clearly require the authority to consider the facts and thereafter to either admit the declaration filed by the assessee or then reject it. The appellate authority is therefore required to judicially evaluate the reasons for not agreeing given by Assessing Officer and pass a reasoned Order keeping in mind the design in adding Section 158A to the Act. It is because of this application of mind envisaged by Section 158A that an order passed by the appellate authority or the assessing officer has not been made amenable to further challenge either by way of an appeal or revision or reference. The Parliament expects the authorities empowered under the said provisions to act in accordance with the spirit of the provisions made and, therefore, only after an order is made either way with due application of mind, the order has been made not appealable or not revisable. As already observed above, the ITAT here has failed to apply its mind as required and therefore, the very purpose of putting Section 158A in the statute book has been frustrated.10. Mr. Rivonkar has argued that the order passed under Section 158A(3) is not open to challenge in the present appeals. The learned Senior Advocate has contended that the impugned order is under Section 254(1) of the Act. The scheme of Section 158A clearly shows that after declaration as contemplated by Section 158A(1) is filed either before the Assessing Officer or the appellate authority, a separate order is required to be passed as contemplated under Section 158A(3) either admitting the claim or rejecting the claim. There is no question of hearing the parties on merits, in appeal, at that stage. If arguments on such a declaration and also arguments on appeal are heard together and ultimately, the declaration is accepted as required by Section 158A(3)(i), the arguments on merits heard by the authority would be an exercise into futility. Even the provisions of Section 158A(6) also show that the legislature contemplated passing a separate order either admitting the claim of the assessee or rejecting his claim. In the present circumstances, there is no order passed as required by Section 158A(3). The order passed is only one and under Section 254(1) on 7.4.2006. The said order is a common order in all appeals as mentioned above. As the issue was found to be covered by the order of ITAT, Delhi Bench, the ITAT Panaji Bench has not gone into the merits of the controversy and the appeals filed by the assessee were dismissed straight away. The impugned order, therefore, cannot be read as an order under Section 158A(3) against which no appeal is provided.11. The ITAT, Panaji Bench has not recorded any separate reasons of its own while upholding the orders passed by the Commissioner (Appeals) or the Assessing Officer. The impugned order, therefore, does not reveal why, as contended by the assessee, the actual costs incurred by it for acquisition of relevant assets could not have been accepted as base for computing depreciation. In view of absence of this material on record, it is apparent that the impugned order cannot be sustained. As the ITAT here chose to rely upon the order of Delhi ITAT, it is clear that in view of the scheme of Section 158A, it would have been proper for it to wait till the question of law is adjudicated by the Honble Delhi High Court in the appeals pending before it. In this situation, we find it appropriate to remand the matter to the ITAT, Panaji Bench, before whom declaration under Section 158A was filed by the appellant with direction to admit the claim of assessee in the said declaration and to proceed further as per section 158A(5) of the Act after the Honble Delhi High Court adjudicates the appeals pending before it.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]8. Thus, if in the present circumstances the claim of the assessee/present appellant was accepted by the ITAT, its appeals could have been disposed of in terms of Section 158(4)(a) and he would not have been required to file Appeals before this Court as contemplated by clause (b) of(4). The provisions clearly show that the ITAT is required to pass an order after ascertaining the claim made by the assessee about otherParliament expects the authorities empowered under the said provisions to act in accordance with the spirit of the provisions made and, therefore, only after an order is made either way with due application of mind, the order has been made not appealable or not revisable. As already observed above, the ITAT here has failed to apply its mind as required and therefore, the very purpose of putting Section 158A in the statute book has beenis no question of hearing the parties on merits, in appeal, at that stage. If arguments on such a declaration and also arguments on appeal are heard together and ultimately, the declaration is accepted as required by Section 158A(3)(i), the arguments on merits heard by the authority would be an exercise into futility. Even the provisions of Section 158A(6) also show that the legislature contemplated passing a separate order either admitting the claim of the assessee or rejecting his claim. In the present circumstances, there is no order passed as required by Section 158A(3). The order passed is only one and under Section 254(1) on 7.4.2006. The said order is a common order in all appeals as mentioned above. As the issue was found to be covered by the order of ITAT, Delhi Bench, the ITAT Panaji Bench has not gone into the merits of the controversy and the appeals filed by the assessee were dismissed straight away. The impugned order, therefore, cannot be read as an order under Section 158A(3) against which no appeal is provided.11. The ITAT, Panaji Bench has not recorded any separate reasons of its own while upholding the orders passed by the Commissioner (Appeals) or the Assessing Officer. The impugned order, therefore, does not reveal why, as contended by the assessee, the actual costs incurred by it for acquisition of relevant assets could not have been accepted as base for computing depreciation. In view of absence of this material on record, it is apparent that the impugned order cannot be sustained. As the ITAT here chose to rely upon the order of Delhi ITAT, it is clear that in view of the scheme of Section 158A, it would have been proper for it to wait till the question of law is adjudicated by the Honble Delhi High Court in the appeals pending before it. In this situation, we find it appropriate to remand the matter to the ITAT, Panaji Bench, before whom declaration under Section 158A was filed by the appellant with direction to admit the claim of assessee in the said declaration and to proceed further as per section 158A(5) of the Act after the Honble Delhi High Court adjudicates the appeals pending before it.