Law: Income Tax Act, 1961

Section: 254

Income-tax---Appeal to Appellate Tribunal---Powers of Tribunal---Power to remand case---Scope of power---Amendment of provision---Writ petition challenging validity of amendment---Operation of amendment not stayed---Tribunal bound to decide matter in accordance with provision as amended---Remand of matter not justified---Indian Income Tax Act, 1961, S.254. The assessee had claimed deduction under section 80-J of the Income Tax Act, 1961. The dispute between the assessing authority and the respondent centred round the question of capital employed in the business. According to the assessee, it would include borrowed funds while the Revenue held that it would not. The Income Tax Officer negatived the claim for relief. The order of the Income Tax Officer was upheld by the first appellate authority. When the appeal came up before the Tribunal, section 80J stood in an amended form. The Tribunal found that the amended section 80J would support the Revenue. But it was noticed that the amendment was the subject of challenge in a proceeding before the Supreme Court and that proceeding was pending, Placed in such circumstances, the Appellate Tribunal set aside the appellate order and ordered a remit of the matter to the Appellate Assistant Commissioner. On a reference: Held, that the Tribunal was duty bound to give effect to the law as amended By failing to do so, it abdicated its duty. The fact that a writ petition was filed in the Supreme Court challenging the validity of the amendment was of no consequence or. relevance. The Appellate Tribunal had no case that the operation of section 8flJ as amended was stayed or further directions were given by the Supreme Court. The order of remit was unauthorized and illegal. JUDGMENT K.S. PARIPOORNAN, J.---At the instance of the Revenue, the Income Tax Appellate Tribunal has referred the following questions of law for the decision of this Court: "(1) Whether, on the facts and in the circumstances of the case, the remand of the case to the Appellate Assistant Commissioner is justified? (2) On the facts and in the circumstances of the case, the order of the Tribunal is vitiated for non-exercise of the jurisdiction and authority…

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