Commissioner of Income Tax vs A. Rafeeq Ahmed and Co. and A. Abdul Shukoor and Co.

R. Jayasimha Babu, J.—For the assessment year 1979-80, two questions have been referred, the second of which is required to be answered against the assessee in the light of the decision of this court in the case of K.V. Sasidhar Vs. Assistant Director of Inspection (Investigation), . That question as to whether the assessee is entitled to weighted deduction u/s 35B of the Income Tax Act, 1961, in respect of packing credit is answered against the assessee.

So far as the first question regarding the eligibility of the assessee to claim the benefit of Section 80HH of the Act is concerned the Tribunal had, after finding that certain factors had not been properly appreciated by the assessing authority, sent the matter back to the Income Tax Officer for a decision afresh in accordance with law. Subsequently without stating any other reason, it had modified the direction and mandated that the Income Tax Officer should merely quantify the relief and not go through the exercise of determining whether the assessee is eligible for relief u/s 80HH of the Act. The Tribunal had not recorded a finding when it made the order under appeal that the assessee had established a new industrial undertaking. It merely pointed out what it regarded as an erroneous approach adopted by the Income Tax Officer and concluded that the matter was required to be referred back to the Income Tax Officer for a fresh decision. That direction was a perfectly proper one in the circumstances. The modification of that subsequently was not called for, and that direction is not supported by any reasons.

As to whether the Tribunal was justified in making the order on the rectification petition, is answered against the assessee by holding that the order made on the rectification petition was not an order which could have properly been made in the light of the findings recorded by the Tribunal in the appeal.

We, therefore, hold that the assessee''s eligibility to claim relief u/s 80HH of the Act would be dependent upon the finding by the Income Tax Officer that the assessee had established a new industrial undertaking, and in order to enable the Income Tax Officer as to whether or not such a new industrial undertaking had been established, the matter is remanded to the Income Tax Officer.