ORDER
Joginder Pall, A.M.
1. This appeal has been filed by the assessee against the order of the CIT(A), Jalandhar for the asst. yr. 1985-86.
2. The only ground taken by the assessee is that the learned CIT(A) was not justified in upholding the disallowance of Rs. 4,65,579 claimed in respect of scientific research under Section 35 of the IT Act. The facts of the case are that the assessee had claimed deduction of expenditure of Rs. 4,65,579 (being expenditure on scientific research). The AO disallowed the same. This matter travelled to Tribunal, Amritsar Bench. It was contended before the Tribunal that as per provisions of Section 35(3) the Board was duty-bound to refer the question as to whether the expenditure incurred by the assessee on scientific research actually constituted for scientific research. It was also submitted that such exercise was required to be done by the Department and not by the assessee. It was submitted that these provisions of the Act were totally overlooked by the Revenue. Finding merit in the contention of the Revenue, the Tribunal vide its order dt. 24th Sept., 1993 set aside the order of the CIT(A) and restored the issue to the file of the AO with the direction that the matter should be referred to the prescribed authority with a view to ascertain whether the assessee was entitled to its claim under Section 35(2)(ia). The relevant findings of the aforesaid order of the Tribunal are as under:
6. Finding merits in the contention of the assessee, we restore the matter to the AO to enable him to do the needful because no disallowance could possibly be made unless the prescribed authority had decided the question whether the assessee was entitled to its claim under Section 35(2)(ia) of the Act. Since ground No. 1 is rejected, for the purpose of statistics, the assessee’s appeal is treated as partly allowed.
Thereafter, the AO completed the set aside assessment and again made the disallowance without waiting for the opinion of the prescribed authority. On appeal, the learned CIT(A) upheld the disallowance on the ground that the expenditure has not been incurred in the accounting year relevant to the asst. yr. 1985-86. The assessee is aggrieved by the order of the CIT(A). Hence, this appeal before us.
3. In response to notice for hearing, the learned Counsel for the assessee has sent written submissions stating therein that as per directions of the Tribunal, the authorities below are not competent to disallow the impugned expenditure without referring the same to the prescribed authority. Reliance was placed on the judgment of Madhya Pradesh High Court in the case of CIT v. Hope Textiles Ltd , wherein it was held that where the matter was sent back to the authorities below with specific directions, the authority below has no jurisdiction to enter into any question which falls outside the limit, Thus, the assessee has contended that the action of the authority below falls outside the competence and jurisdiction of the authorities below.
4. The learned Departmental Representative, on the other hand, heavily relied on the orders of the authorities below.
5. I have heard the learned Departmental Representative and given my thoughtful consideration to his submissions as well as written submissions filed by the assessee. From the facts discussed above, it is obvious that the Tribunal has set aside the order of the learned CIT(A) and restored the matter to the file of the AO with specific directions to refer the matter to the prescribed authority to ascertain whether the assessee was entitled to such deduction or not. These were specific directions of the Tribunal. In the present case, the AO has not made the disallowance by relying on the opinion of the prescribed authority. In fact, perusal of the orders of the authorities below show that no such reference has been made to the prescribed authority. Since there was specific direction of the Tribunal, the AO was bound to comply with the same instead of making such disallowance. He could not have disallowed the claim on the ground that such expenditure did not relate to the assessment year under reference. He could not have travelled beyond the directions of the Tribunal. Since the impugned disallowance has been sustained without complying with the directions of the Tribunal, I am of the opinion that the order of the CIT(A) deserves to be set aside. Accordingly, the same is set aside and the impugned disallowance is deleted. This ground of appeal is allowed.
6. In the result, the appeal of the assessee is allowed.