Director of Income Tax vs Sheraton International Inc.

This appeal by the Revenue u/s 260A of the IT Act, 1961 (for short "the Act"), is directed against the order, dt. 23rd Oct., 2002, passed by the Income Tax Appellate Tribunal (for short the Tribunal) in assessed''s appeals (ITA No. 2216/Del/2001 and ITA No. 253/Del/2002) pertaining to the asst. yrs. 1997-98 and 1998-99. By the impugned order the Tribunal has set aside the orders passed by the CIT(A) for both the assessment years and has restored the matter to the file of AO for fresh adjudication in accordance with law. According to the appellant, the order of the Tribunal involves the following substantial questions of law :

"1. Whether the Tribunal was right in law in failing to decide the appeals filed by the assessed on merits and remanding the matter back to the AO?

Whether the Tribunal was right in law in remanding the matter back to the AO to determine whether the income received by the assessed is chargeable to tax under Sections 4, 5 and 9 of the IT Act, 1961, when the assessed had not disputed and questioned the same before the AO, the CIT(A) and learned Tribunal and there was sufficient material before the learned Tribunal to decide the entire controversy?"

We have heard Mr. Sanjeev Khanna, learned Senior Standing Counsel for the Revenue and Mr. Ajay Vohra, learned counsel for the respondent/assessed.

Assailing the order passed by the Tribunal, Mr. Khanna has vehemently submitted that since the assessed had never raised the question whether its income was chargeable to tax under Sections 4, 5 and 9 of the Act, the Tribunal has misdirected itself in directing the AO to go into the said question. The submission is that the said direction is beyond the jurisdiction of the Tribunal. Mr. Vohra, learned counsel for the assessed, on the other hand, submits that since the entire issue of the taxability of amount(s) received by the assessed under various agreements has been remitted back for fresh adjudication by AO, no prejudice is caused to the Revenue by the impugned directions.

We find substance in the contention urged on behalf of the assessed.

We are unable to appreciate the grievance of the Revenue when the whole issue of assessability of the amount received by the assessed would be open to adjudication by the AO in terms of the impugned order. We are of the view that it is not an appropriate case for interference u/s 260A of the Act, when no finding has been returned by the Tribunal on the merits of the case. As observed by the Supreme Court in Santosh Hazari Vs. Purushottam Tiwai (Dead) by Lrs., the word "substantial" as qualifying "question of law", means having substance, essential, real of sound worth, important or considerable. It is to be understood as something in contra-distinction with technical, of no substance or consequence or academic merely.

Bearing these principles in mind, in our opinion, the impugned order does not involve any substantial question of law. Accordingly, we decline to entertain the appeal.

Dismissed.