Commissioner Of Income-Tax vs Wings Wear Pvt. Ltd.
1993 Latest Caselaw 189 Del

JUDGMENT

1. The petitioner seeks reference of the following two questions :

"1. Whether, on facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was right in law in holding that the directions issued by it to Commissioner of Income-tax (Appeals) were binding upon him even though these were contrary to the available decision of the jurisdictional High Court under which both the appellate authorities were functioning ?

2. Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was correct in law in directing the Commissioner of Income-tax (Appeals) to allow deduction under section 35B of the Income-tax Act, 1961, in the light of its earlier orders, on outward freight expenditure, which expenditure is not covered by the then provisions of sub-clause (iii) of section 35 of the Income-tax Act, as interpreted by the Delhi High Court ?"

2. It appears that in respect of the assessment years 1977-78 to 1979-80, with which we are concerned in the present case, assessment were made and after the first appeal to the Commissioner of Income-tax (Appeals), appeals were filed before the Income-tax Appellate Tribunal. On April 10, 1984, the Income-tax Appellate Tribunal allowed the appeals, and, with reference to the claim under section 35B of the Income-tax Act, it gave a direction to the Commissioner of Income-tax (Appeals) to allow the claim of the assessed. The Department chose to file a reference application seeking reference of questions of law arising out of the said order dated April 10, 1984, but no reference was sought with regard to the allowing of the claim under section 35B. The application under section 256 followed by an application under section 256 out of the said order of April 10, 1984, was with regard to the grant of weighted deduction on "entertainment" and the said application under section 256 was allowed. It was when the Commissioner of Income-tax (Appeals) did not give effect to the order of the Tribunal dated April 10, 1984, with regard to weighted deduction under section 35B on freight, with which we are concerned in the present case and in respect of which direction had been given on April 10, 1984, which was not challenged under section 256 of the Act, that the assessed once again filed an appeal to the Tribunal who, vide order date April 30, 1990, directed compliance with its earlier order of April 10, 1984. From this order of April 30, 1990, the present application under section 256 has been filed seeking reference of the question regarding deduction under section 35B in relation to the outward freight.

3. It has been rightly contended by learned counsel for the assessed that it is not open to the Department to raise this contention now. The question whether weighted deduction on outward freight was allowable or not was decided by the Tribunal on April 10, 1984, in the first order passed by it. There was no challenge to this decision and it is only when the Commissioner of Income-tax (Appeals) wrongly did not give effect to this direction that the assessed was compelled to come to the Tribunal once again. The Department cannot make good the lapse by now seeking to agitate the question with regard to allow ability of the deduction when this question did not merit any discussion as it already stood concluded in the first order of the Tribunal passed on April 10, 1984. Having missed the opportunity of seeking reference of this question which was decided in the first order of April 10, 1984, and which was not really decided in the second order of April 30, 1990, and the Tribunal merely directed the Commissioner of Income-tax (Appeals) to implement the Tribunal's earlier order of April 10, 1984, in our opinion, no question of law arises.

4. It is submitted by learned counsel for the petitioner that the order of April 10, 1984, is a nullity because it directed the Commissioner of Income-tax (Appeals) to follow the Bombay High Court and not the Delhi High Court. In our opinion the order of the Tribunal in this regard may be wrong but it is not correct to contend that the order is a nullity. The concept of nullity does not in this regard apply.

5. Dismissed. No order as to costs.