COMMISSIONER OF INCOME TAX Vs. BALAKRISHNA HATCHERIES

JUDGEMENT

(1.) COMMISSIONER of Income-tax Karnataka (hereinafter referred to as 'the Revenue') has filed this petition under S. 256(2) of the IT Act, 1961 (for short, the Act) seeking a direction to the Appellate Tribunal, Bangalore Bench (for short, the Tribunal) directing it to refer the following question of law along with the statement of case to this Court for its opinion :

(2.) BRIEFLY stated the facts are : This petition arises from the order passed by the Tribunal in ITA No. 258(Bang)/1990 relating to the asst. yr. 1985-86. Assessee is engaged in the poultry business and while concluding the assessment for the year 1985-86, the assessee's claim towards investment allowance was not allowed by the assessing authority on the ground that assessee being engaged in hatchery business was not involved in any manufacturing activity so as to be eligible for investment allowance. Assessee being aggrieved by the disallowance of the claim for investment allowance, preferred an appeal before the CIT(A). The CIT(A) relying upon an unreported judgment of this Court in ITRC No. 47 of 1992 dt. 13th Nov., 1992 [in the case of Southern Hatcheries (P) Ltd.], accepted the appeal. In the said case, this Court had taken the view that a person engaged in hatchery business is involved in a manufacturing activity and, therefore, entitled to the investment allowance under s. 32A. Accordingly, the CIT(A) directed the assessing authority to allow investment allowance under s. 32A in respect of the plant and machinery used in hatchery business of the assessee on the ground that the poultry farm could be considered as involving production of chicks from eggs and certain other things. Revenue being aggrieved, filed an appeal before the Tribunal. Tribunal dismissed the appeal filed by the Revenue relying upon the judgment of the jurisdictional High Court. Revenue thereafter filed a petition under S. 256(1) requesting the Tribunal to refer the question of law (reproduced above) to this Court for its opinion. Petition was declined on the ground that as the matter already stood concluded by a judgment of the jurisdictional High Court, a referable question of law did not arise from the order of the Tribunal. Revenue thereafter filed the present petition under S. 256(2) seeking a mandamus to the Tribunal to refer the question of law (reproduced above) along with the statement of case, to this Court for its opinion.

(3.) COUNSEL for the parties are agreed that instead of issuing a mandamus directing the Tribunal to refer the question of law claimed by the Revenue, the Court may answer the question at this stage itself as the point involved already stands concluded by a judgment of the Supreme Court of India. Otherwise also, the legislature has repealed the provisions of S. 256(1) and 256(2). Requirement of filing a petition before the Tribunal, requiring it to refer the question of law to the High Court and in the event of dismissal of the petition, filing of the petition in the High Court under S. 256(2) for issuance of a mandamus requiring the Tribunal to refer the question of law arising from the order of the Tribunal along with the statement of the case to the High Court, has been dispensed with. Instead, the legislature has introduced S. 260A providing a direct appeal to the High Court on the question of law. The High Court, on framing the question of law in the appeal, can proceed to answer the same.