ITAT Mumbai invokes Section 158A where identical question of law is before High Court

Background of the dispute

The assessee, Owens Corning India Pvt. Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) Mumbai challenging the order dated 28.09.2021 passed by the Commissioner of Income Tax (Appeals)–57, Mumbai under Section 250 of the Income Tax Act 1961 for Assessment Year (AY) 2014-15.

The appeal came up again before the Tribunal pursuant to an earlier order dated 03.02.2023 in M.A. No. 254/Mum./2022 (arising out of ITA No. 1932/Mum./2021 for AY 2014-15), through which the coordinate bench had recalled its order dated 24.08.2022. The recall was limited only to re-adjudication of Ground No. 1 raised by the assessee. Thus, the scope of the present hearing was confined exclusively to that ground.

Assessee’s reliance on Section 158A declaration

Filing of Form No. 8

At the very beginning of the hearing, the Authorised Representative of the assessee informed the Tribunal that a declaration had been furnished in Form No. 8 under Section 158A of the Income Tax Act.

Through this declaration, the assessee pointed out that an identical substantial question of law was already pending adjudication before the Hon’ble jurisdictional High Court in the assessee’s own case for AY 2004-05. On this basis, the assessee requested that the present appeal be disposed of in line with the scheme of Section 158A(3) without requiring a fresh, independent determination of the same legal issue.

The assessee placed on record:

  • The duly filled Form No. 8 declaration under Section 158A; and
  • A copy of the order dated 05.03.2013 of the Hon’ble jurisdictional High Court in ITA No. 2445 of 2011 relating to AY 2004-05, where the relevant question of law had been admitted.

Scope of Ground No. 1 before ITAT

Ground No. 1 in the assessee’s appeal for AY 2014-15 dealt with a disallowance of ₹20,14,928, described as the amortised portion of the premium paid for acquiring leasehold rights over land.

The assessee argued before the CIT(A) and the Tribunal that:

  • The premium paid to obtain lease rights over the land was being written off over the lease period;
  • The amortised component of ₹20,14,928 for the relevant previous year constituted a deductible expenditure while computing total income; and
  • Consequently, the disallowance made by the Assessing Officer and confirmed by the CIT(A) was contrary to law and required to be reversed.

In essence, the assessee sought deletion of the disallowance and consequential recomputation of total income for AY 2014-15.

The precise grounds extracted in the Tribunal’s order were: