COMMISSIONER OF INCOME TAX vs O.N.G.C.

This is an application u/s 256(2) of the Income Tax Act, 1961, filed at the instance of the Commissioner, Meerut.

We have heard the learned counsels for the parties.

Originally, an assessment u/s 143(3) was completed against the respondent-assessee wherein the income return was accepted. Later, the assessment order was set aside u/s 263 of the Act. The assessee had claimed deduction u/s 10(6)(viia) of the Act which was subsequently withdrawn by the Income Tax Officer in the assessment order which was made in pursuance to the directions contained in the order passed u/s 263. The assessee filed appeal against the assessment order which was allowed on the view that since the order u/s 263 itself had been set aside on appeal by the Tribunal, the consequential assessment order could be allowed to stand. Against the appellate order, the revenue preferred an appeal before the Tribunal which was dismissed and the plea taken by the departmental representative in support of the assessment order on merits was not accepted. The revenue then filed an objection u/s 256(1) which was also rejected, hence, this application.

We may observe as informed by the standing counsel that against the order of the Tribunal in which the order u/s 263 was set aside, the matter is pending in reference before this court on certain questions which were referred under sub-section (1) of section 256 and some other questions have been referred under sub-section (2) of section 256. This position is not denied by the learned counsel for the assessee.

On these facts and considering the submissions of the learned counsels for the parties, we are clearly of the opinion that the order of the Tribunal did give rise to the following questions of law.

" 1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in not sustaining the assessment which was made in pursuance to the order passed u/s 263 of the Income Tax Act ?

If the answer to the aforesaid question is in the negative, whether, on the facts and in the circumstances of the case, the additions made u/s 10(6)(viia) of the Income Tax Act could be held exempt in the hands of the assessee ?''

The Tribunal, Delhi Bench ''C'', is directed to draw up a statement of the case and to refer the aforesaid two questions for the opinion of this Court.