ASSAM COMPANY INDIA LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE present proceeding has been registered under S. 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act"), consequent upon reference of a question of law arising out of the order dt. 25th Aug., 1998, passed by the Income tax Appellate Tribunal, Guwahati Bench, Guwahati (hereinafter referred to as the "Tribunal"), passed in ITA No. 401 (Gauhati) of 1991.

(2.) WE have heard Mr. R. Goenka, learned counsel assisted by Mr. R.K. Agarwala, Mr. M. Talukdar, learned counsel for the applicant/assessee, and Mr. G.K. Joshi, learned senior counsel assisted by Mr. U. Bhuyan, learned counsel for the respondent/Revenue.

(3.) MR . Goenka, learned counsel for the applicant company has argued that the subject matter of appeal before the learned Tribunal was as to whether the applicant company was entitled to the benefit of weighted deduction under S. 35B of the Act. He submitted that the broad issue before the learned Tribunal was one with regard to allowability of the export markets development allowance under the aforesaid provision of law and, therefore, the subject matter of the appeal cannot be confined or restricted to examine the claim of the applicant company with regard thereto under any particular clause of S. 35B of the Act, namely, cl. (iv) or cl. (ix) as the case may be. He has argued that keeping in view the issue in question, it was permissible on the part of the learned Tribunal to examine the contention of the applicant company with regard to its claim under S. 35B (1)(b)(iv) of the Act in view of the decision of this Court in Assam Frontier Tea Ltd.'s case (supra). Drawing the attention of this Court to the fact that the assessee company had initially claimed the benefit of such allowance under S. 35B(1)(b)(iv) of the Act and that the same was allowed by the AO, learned counsel argued that the claim of the assessee under cl. (iv) as above was inextricably intertwined with its claim under S. 35B(1)(b)(ix) of the Act as well and, therefore, it could not be legitimately said that the applicant company having raised the contentions in the reassessment proceedings only on the basis of r. 6AA and S. 35B(1)(b)(ix) of the Act, it could be precluded in law from pursuing its plea with regard to the export markets development allowance under S. 35B(1) (b)(iv) of the Act. He therefore, contended, that in this factual background the subject matter of the appeal before the learned Tribunal had within its sweep the issue pertaining to the entitlement of the applicant company for such allowance under S. 35B(1)(b)(iv) of the Act, as well. Learned counsel has further argued that it is the duty of the authorities under the Act to correctly assess and realise the tax payable in accordance with law and, therefore, assuming that as a result of some lapse, negligence or ignorance there is any omission on the part of the assessee, the same should not be exploited to the advantage of the Revenue by side lining the relevant provisions of law. If technical considerations are pitted against substantial justice, the latter should prevail, learned counsel argued. According to him, the subject matter of the appeal squarely covered the claim of the applicant company under S. 35B(1)(b)(iv) of the Act as well and there were sufficient materials on record to enable the learned Tribunal to consider and decide the said issue on the merits. In support of his above contentions, learned counsel placed reliance on the following decisions of the apex Court as well as of this Court :