The Supreme Court has remanded the income tax department?s plea against Essar Steel India Ltd back to the Bombay High Court, which had earlier refused to entertain the issue related to tax assessment year 1992-93 on the ground that it had no power to condone the delay in filing the appeal.

A Bench headed by Chief Justice SH Kapadia while disposing of the matter said: ?After passing of the impugned order, Parliament has amended the law vide Finance Act No.14 of 2010. In the circumstances, impugned order is set aside and the matter is remitted to the High Court to consider the question of condonation of delay in the light of the amended law. We make it clear that the Department will ? satisfy the High Court that there is sufficient cause for condonation of delay? Subject to above, the special leave petition is disposed of. ?

Challenging the Bombay High Court?s decision to dismiss its appeal, the income tax department said that the high court was not justified in dismissing its plea without giving an opportunity to explain reasons for such delay.

According to it, the high court was not correct in granting depreciation to the assessee on the national liability arising out of foreign exchange rate fluctuations.

The I-T department said that the HC was wrong wrong in deleting the disallowance of Rs 3.35 crore incurred in respect of rigs mobilisation expenses.

It said that the HC had wrongly dismissed the Revenue?s appeal and cancelled the rectification order made by the assessing officer on account of wrong depreciation claimed by the assessee.

The department had selected for scrutiny the company?s income tax returns for 1992-93 filed in December 1992 declaring a net loss of Rs 118.41 crore.

However, the AO had made certain rectification of mistakes by withdrawing benefits granted to Essar in earlier years. It had also disallowed depreciation claimed by the company on account of the forex fluctuations as the same remained unpaid and rigs mobilisation expenses were also disallowed.

All the three fora ? CIT, ITAT and the high court had ruled in favour of the assessee and dismissed Revenue?s contentions.