Commissioner of Income Tax vs Farida Shoes Ltd.

N.V. Balasubramanian, J.—This is a petition filed by the Commissioner of Income Tax, Tamil Nadu-II, Madras, to direct the Appellate Tribunal to state a case and refer the following question of law for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee is entitled to carry forward and set off the deduction u/s 80HHC of the earlier years even though the provisions of section 80VVA (by which the restriction and carry forward of relief u/s 80HHC was made in earlier years) have been omitted from the Income Tax Act for the assessment year under consideration ?"

The assessee is a company in which the public are not substantially interested. The Assessing Officer, in the course of assessment proceedings for the assessment year 1989-90, did not allow the relief of deduction of the carried forward deduction u/s 80HHC of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), as provided u/s 80VVA(4) of the Act on the ground that section 80VVA of the Act was deleted by the Finance Act, 1987, with effect from April 1, 1988. The view of the Assessing Officer was confirmed by the Commissioner of Income Tax (Appeals). But, on further appeal before the Appellate Tribunal, the Appellate Tribunal following a decision of this court in J.K.K. Angappan Vs. Income Tax Officer, , held that the effect of omission of section 80VVA of the Act with effect from April 1, 1988, has the same effect as a repeal of an enactment and hence the assessee was entitled to carry forward the deduction u/s 80HHC available for the earlier years. The Tribunal also rejected the reference application filed by the Revenue on the ground that its decision is based on a decision of this court in J.K.K. Angappan Vs. Income Tax Officer, . Though the Appellate Tribunal has come to the conclusion on the basis of the decision of this court in J.K.K. Angappan Vs. Income Tax Officer, we are of the view that the question involves interpretation of section 80VVA and section 80HHC of the Act and the right of the assessee to carry forward the deduction u/s 80HHC of the Act, after the deletion of section 80VVA of the Act by the Finance Act, 1987, with effect from April 1, 1988. We are of the opinion that a question of law does arise out of the order of the Appellate Tribunal. Accordingly, we direct the Appellate Tribunal to state a case and refer the question set out in paragraph 1 above.

The petition is ordered accordingly. No costs.