The Himachal Pradesh High Court has quashed the order passed by National Faceless Appeal Centre (NFAC) and slammed anarchy from defiance of appellate authority rulings.
The bench of Justice Tarlok Singh Chauhan and Justice Sushil Kukreja has observed that when a subordinate authority refuses to implement the judgment of the Appellate Authority, the situation is akin to anarchy and will result in complete breakdown of the judicial/quasi-judicial stem.
The bench stated that the appellate directions should be followed in the hierarchical system by the Courts/quasi-judicial authorities, which exist in this country. It is, therefore, necessary for each lower tier to accept loyally the decision of the higher tier. The judicial or quasi-judicial system only works if someone is allowed to have the last word and if the last word, once spoken, is loyally accepted.
The petitioner is a private limited Company and engaged in the business of running hotels and restaurants. The petitioner for the assessment year 2010-11 filed the return of income on 26.03.2011 declaring nil income after claiming deduction under Section 80IC of the Income Tax Act, 1961 amounting to Rs.1,19,92,957/-, which was processed.
The Assessing Officer made the scrutiny assessment under Section 143(3) of the Act and disallowed the deduction under Section 80IC of the Act. The petitioner challenged the order dated 18.03.2013 before the Commissioner of Income Tax (Appeals), Chandigarh, but the appeal of the petitioner was dismissed..
The petitioner filed the appeal before the Income Tax Appellate Tribunal (ITAT) and the same was considered by the ITAT on merits and was allowed. The department filed the application before the ITAT under Section 254 of the Act for rectification on the ground that the issue of disallowance under Section 80IC of the Income Tax Act was not discussed.
The appeal filed by the petitioner against order was dismissed by the National Faceless Appeal Centre (NFAC) without considering the aspect that under Section 154, as the Assessing Officer lacks jurisdiction to decide the issue on merits, and the issue of disallowance under Section 80IC was not within the scope of Section 154 of the Act as the same was required to be established by long drawn process of reasoning.
The court held that the department has indulged in mis-adventure in sitting over the orders passed by its higher authorities, which orders have already attained finality and thus the proceedings clearly are without jurisdiction and in such circumstances, the petitioner is well within its right to file the writ petition.
Case Details
Case Title: East Bourne Hotels Pvt. Ltd. Versus Union of India and others
Case No.: CWP No.3335 of 2025
Date: 30th May, 2025
Counsel For Petitioner: Vishal Mohan, Senior Advocate with Mr.Praveen Sharma and Mr. Abhinav Bazwaria, Advocates
Counsel For Respondent: Vishal Mohan, Senior Advocate with Mr.Praveen Sharma and Mr. Abhinav Bazwaria, Advocates
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