The Tribunal's authority to direct the reconsideration of the assessee's status and the absence of a substantial question of law for consideration by the High Court.

Deepak Verma, J.— Sri M. V. Seshachala, learned Counsel appeared on behalf of the appellants.

2. Heard on admission. Records perused.

3. The Revenue is in appeal under Section 260A of the Income Tax Act, 1961, against the order dated September 28, 2007, passed by the Income Tax Appellate Tribunal, Bangalore Bench "B", in appeal I. T. A. No. 605/Bang/07 for the assessment year 2004-05, which was an appeal preferred by the respondent/assessee herein.

4. The respondent/assessee was in appeal against the order passed by the Commissioner of Income Tax (Appeals), before the Income Tax Appellate Tribunal, wherein several questions were raised. According to the assessee, it was being assessed and granted exemption under Section 10(20) of the Act. In view of this provision, the assessee filed claim of registration under Section 12A of the Act. The Director of Income Tax (Exemptions) recorded a finding that the assessee is not entitled to deduction under Section 10(20) of the Act, as it does not fall in the category of local authority, hence, there was no reason for the assessee to prefer the registration under Section 12A of the Act.

5. After considering the matter from all angles, the Tribunal in its wisdom thought it fit to pass the following judicial directions which are reproduced herein below:

The assessee is a State Government controlled organization which is bound by rules and regulations framed under the Act and, therefore, we do not find any infirmity in the contention of learned Counsel for the assessee that coupled with the fact that the assessee was entitled to registration under Section 12A could not have deviated from the provisions of Article 289 of the Constitution of India. Therefore, on the basis of these facts and circumstances, we direct the Assessing Officer to reconsider the issue of the status of the assessee afresh after affording an opportunity of being heard to the assessee keeping in view the aforesaid.

In the result, the appeals are treated as allowed for statistical purposes.

Sd./-

(Gopal Chowdhury)

Judicial Member

Sd./-

(K.K. Gupta)

Accountant Member

6. In the light of the directions as have been passed by the Tribunal, in the appeal preferred by the assessee, we are of the opinion that no substantial question of law arises to be considered by us. Obviously, in the light of the provisions as available in the Constitution of India and on the authority of judgments of various High Courts, the Tribunal has only remitted the matter to the Assessing Officer to reconsider the matter afresh after affording an opportunity of hearing to both parties. The impugned operative part of the order does not indicate or show that the direction has been given to grant registration to the assessee under Section 12A of the Act. The operative part of the order as reproduced hereinabove shows that the everything has been left open to be considered afresh by the Assessing Officer. That being so, we do not find that any substantial question of law arises to be considered by us.

7. However, it is clarified against the final order that may be passed by the Assessing Officer, either of the aggrieved party would be at liberty to challenge the same before an appropriate appellate forum in accordance with law.

8. The appeal, therefore, stands hereby finally disposed of.