COMMISSIONER OF INCOME TAX vs. M/S HARYANA MINERALS LTD.

ITC/57/1999HC Punjab & HaryanaPHHC01038475199908 August 2007Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE AJAY KUMAR MITTAL4 pages
AI SummaryDismissed

What were the facts?

This case involves a petition filed by the Commissioner of Income Tax, Rohtak (Revenue) under Section 256(2) of the Income Tax Act, 1961. The Revenue challenged an order dated July 28, 1998, passed by the Income Tax Appellate Tribunal, Delhi Bench, which dismissed the Revenue's application under Section 256(1) of the Act. The Revenue sought to have two questions of law referred to the High Court for its opinion, arising from the Tribunal's order dated October 3, 1997, in ITA No. 3957/Del/90 concerning the assessment year 1988-89. The assessee is M/s Haryana Minerals Ltd., Faridabad. The High Court noted that a similar petition for an earlier assessment year (1984-85) had been allowed, directing the Tribunal to refer these questions. No one appeared for the assessee.

What did the High Court hold?

The High Court, after hearing the Revenue's counsel and noting the absence of the assessee, decided to follow the precedent set by its own Division Bench in the case of Haryana Minerals Ltd. (supra) concerning the same assessee for the assessment year 1984-85. For Question 1, the Court found that the Supreme Court's judgment in M/s Gem Granites v. Commissioner of Income Tax Tamil Nadu (2005) 26 ITR 1 (SC) supported the Revenue's position. The Court agreed that the Tribunal's treatment of the amended Section 80-HHC as retrospective was legally unsustainable. Consequently, the order of the Assessing Officer rectifying the earlier mistake of allowing deductions based on the amended section was deemed legally sound. For Question 2, the Court also relied on the M/s Gem Granites judgment, which considered the unamended Section 80-HHC and the amendment by the Finance Act No. 2 of 1991. The ratio of that judgment indicated that the benefit of the amendment could not be extended to the assessee for the assessment year 1984-85, and the position would not differ for assessment year 1988-89. Therefore, the Court answered both questions in favour of the Revenue and against the assessee, obviating the need to direct the Tribunal to draw up a statement of case.

What were the issues?

The High Court was asked to decide whether the Tribunal was justified in law in holding that merchandise exported by the assessee did not constitute 'minerals and ores' within the meaning of Section 80-HHC(2)(b)(ii) (Question 1). The second question was whether the Tribunal was right in law in giving retrospective effect to the insertion made in sub-clause (ii) of clause (b) of sub-section (2) of Section 80 HHC by the Finance (No. 2) Act, 1991, effective from April 1, 1991 (Question 2). The Revenue contended that these questions of law deserved to be referred for the Court's opinion. The Revenue pointed out that for the assessment year 1984-85, the Tribunal had refused to refer these questions, but the High Court, in ITC No. 40 of 1997, had directed the Tribunal to do so. Furthermore, the Revenue highlighted that a Division Bench of the High Court had already decided both these questions in favour of the Revenue and against the assessee in ITR No. 32 of 1999 (Commissioner of Income Tax, Haryana, Rohtak v. Haryana Minerals Ltd.). No arguments were recorded for the assessee as no one appeared on their behalf.

Which sections of the Income-tax Act were involved?

Section 80-HHC,Section 256(1),Section 256(2)

AI-generated summary — verify with the full judgment below

ITC 57 of 1999 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITC No. 57 of 1999 Date of decision 8. 8 .2007 Commssioner of Income Tax, Rohtak .. Petitioner Versus M/s Haryana Minerals Ltd., Faridabad .. Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE AJAY KUMAR MITTAL PRESENT: Mr. Yogesh Putney, Advocate for the petitioner

M.M.Kumar, J. This petition filed under Section 256(2) of the Income Tax Act,1961 (for brevity 'the Act') challenges order dated 28.7.1998 passed by the Income Tax Appellate Tribunal, Delhi Bench (D), New Delhi (for brevity 'the Tribunal') in RA No.16/Del/98 dismissing the application filed by the Revenue under Section 256(1) of the Act. The Revenue has claimed that the following two questions of law deserved to be referred for the opinion of this Court and would emerge from the order dated 3.10.1997 passed by the Tribunal in ITA No.3957/Del/90 in respect of the assessment year 1988-89:

“1. Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in law in holding that merchandise exported by the assessee do not constitute 'minerals and Ores' within the meaning of section 80-HHC(2) (b)(

The order continues below.

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