Case: Titanor Components Limited Vs. Commissioner of Income Tax

All these appeals by same assessee raise same question of law which has been formulated while admitting the appeals on 19.9.2006.We have heard Senior Advocate P.J. Pardiwalla with Advocate S.G. Bhobe for the appellant and Advocate S. R. Rivonkar for the respondent/Department.3. The appellant Company came to be incorporated on 7.6.1989 with its registered office in New Delhi. It acquired metal anodes division by name M/s. Western India Match Company Ltd. (WIMCO) by agreement dated 30.11.1989. On 29.11.1996, in the return filed with the Assessing Officer at New Delhi it claimed depreciation under Section 32 of the Income Tax Act, 1961 (Act for short) on written down value of the acquired assets. The said written down value was stated on the basis of actual costs incurred by the appellant for acquisition i.e. of Rs.The Assessing Officer completed the assessment under Section 143(3) of the Act. But then for the assessment yearadopted the written down value of those assets to be at Rs.3,50,37,238/by placing reliance upon the surveyors report. The appellants then filed appeals before the Commissioner of(Appeals) and on 31.12.1999, the appellate authority, confirmed the order passed by the Assessing Officer. The appellants then approached the Income Tax Appellate Tribunal (ITAT) and the Delhi Bench of ITAT decided the appeals for two assessment years i.e.92 upholding the orders of the Assessing Officer. The appellants approached Delhi High Court which admitted on 15.09.2003 their appeals on the question of law as mentioned above. ITA 191/2002 (A.Y.TA 190/2002 (A.Y. 199192) are still pending in Delhi High Court.4. It appears that in the meanwhile, registered office of the appellant Company was shifted to Goa and the other appeals came up for consideration from the ITAT at Goa. In those appeals, the appellants filed declaration under Sectionfor keeping the issue pending till it was decided by the Delhi High Court. The applications were opposed by the Assessing Officer who, in reply, stated that the Income Tax Act treated each year as self contained accounting period and its provision is applied in relation to specific assessment year because income tax was an annual levy and each previous year is distinct from any other previous year, the doctrine of res judicata was, therefore, not applicable. The ITAT at Goa, Panaji Bench then delivered the impugned order on 7.4.2006 and upheld the orders passed by the Assessing Officer and the appellate authority. It is this order, which is a common order in appeals pertaining to assessment years7 andter of the present 5 appeals.

Reasoning:
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.