M/s. Kashmir Steel Rolling MIlls, Jammu & Kashmir V. The Dy. Commissioner of Income-tax, Jammu

CO 62/ASR/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0296 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Question of law; Tax effect; Capital receipt; Revenue expenditure
• Section: 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS. 618 & 619(ASR)/2014 ASSESSMENT YEAR:2009-10 & 2010-11 PAN :AABFK4948A DY. COMMR. OF INCOME TAX, VS. M/S. KASHMIR STEEL RO LLING MILLS, CENTRAL CIRCLE, SIDCO INDL. COMPLEX, BARI JAMMU. BRAHMANA, JAMMU. (APPELLANT) (RESPONDENT) C.O. NOS. 62 & 63(ASR)/2014 (ARISING OUT OF ITA NOS. 618 & 619(ASR)/2014) ASSESSMENT YEAR : 2009-10 & 2010-11 M/S. KASHMIR STEEL ROLLING MILLS, VS. DY.COMMR. OF INCOME TAX, SIDCOINDL. COMPLEX, BARI CENTRAL CIRCLE, BRAHMANA, JAMMU. JAMMU. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH.TARSEM LAL, DR ASSESSEE BY:SH.TARUN BANSAL, ADVOCATE DATE OF HEARING:25/02/2015 DATE OF PRONOUNCEMENT:17/03/2015 ORDER PER BENCH: THESE TWO APPEALS OF THE REVENUE ARISE FROM TWO DI FFERENT ORDERS OF THE CIT(A), JAMMU, EACH DATED 03.07.2014 FOR THE A SSESSMENT YEARS 2009- 10 & 2010-11. THE ASSESSEE HAS ALSO FILED C.OS I N BOTH THE YEARS. IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 2 2. THE REVENUE IN ITA NO.618(ASR)/2014 FOR AY 2009 -10 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT T HE EXISE DUTY REFUND SHOULD BE REDUCED FROM THE INCOME U/S 154, B Y TREATING IT AS A CAPITAL RECEIPT, EVEN THOUGH THE ASSESSEE H AD HIMSELF SHOWN IT AS A REVENUE RECEIPT. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S OF THE CASE BY TREATING IT AS A MISTAKE APPARENT FROM RECORD AND O RDERING RECTIFICATION U/S 154. 3. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT TH E JUDGMENT OF J & K HIGH COURT SHOULD BE APPLIED EVEN TO THE CASES IN WHICH THE ASSESSEE HAD THEMSELVES SHOWN THE EXCISE DUTY R EFUND AS REVENUE RECEIPT, EVEN THOUGH AN SLP AGAINST THE JU DGMENT IS PENDING BEFORE THE HONBLE SUPREME COURT. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OF. 5. IT IS PRAYED THAT THE ORDER OF CIT(A) BE SET ASI DE AND THAT OF THE AO BE RESTORED ON MERITS. 3. THE REVENUE IN ITA NO.619(ASR)/2014 FOR AY 2010- 11 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT T HE EXISE DUTY REFUND SHOULD BE REDUCED FROM THE INCOME U/S 154, B Y TREATING IT AS A CAPITAL RECEIPT, EVEN THOUGH THE ASSESSEE H AD HIMSELF SHOWN IT AS A REVENUE RECEIPT. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S OF THE CASE BY TREATING IT AS A MISTAKE APPARENT FROM RECORD AND O RDERING RECTIFICATION U/S 154. 3. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT TH E JUDGMENT OF J & K HIGH COURT SHOULD BE APPLIED EVEN TO THE CASES IN WHICH IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 3 THE ASSESSEE HAD THEMSELVES SHOWN THE EXCISE DUTY R EFUND AS REVENUE RECEIPT, EVEN THOUGH AN SLP AGAINST THE JU DGMENT IS PENDING BEFORE THE HONBLE SUPREME COURT. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OF. 5. IT IS PRAYED THAT THE ORDER OF CIT(A) BE SET ASI DE AND THAT OF THE AO BE RESTORED ON MERITS. 4. THE ASSESSEE IN C.O. NO.62(ASR)/2014 HAS RAISED THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS BEEN JUSTIFIED IN LAW IN ACCEPTING THE APPEAL O F THE RESPONDENT M/S. KASHMIR ROLLING MILL AND HOLDING TH AT THERE IS ERROR APPARENT FROM RECORD IN VIEW OF JUDGMENT OF T HE J & K HIGH COURT IN SHREE BALAJI CASE (333 ITR 336). 2. THAT THE LD. CIT(A) HAS ALSO NOT BEEN JUSTIFIED IN LAW TO HOLD THAT THE EXCISE DUTY REFUND IS CAPITAL RECEIPT AS H E WAS BOUND TO FOLLOW THE LAW DECLARED BY THE JURISDICTIONAL HIGH COURT IN SHREE BALAJIS CASE(333 ITR 335 (J&K)) IN VIEW OF T HE JUDGMENT OF THE HNBLE SUPREME COURT IN EAST INDIA COMMERCIAL CO. LTD. VS. COLLECTOR OF CUSTOM AIR1962 SC 1893. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPEAL EFILED BY THE APPELLANT IS LIABLE TO BE DISMISSED. 5. THE ASSESSEE IN C.O. NO.63(ASR)/2014 FOR AY 201 -011 HAS RAISED THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS BEEN JUSTIFIED IN LAW IN ACCEPTING THE APPEAL O F THE RESPONDENT M/S. KASHMIR ROLLING MILL AND HOLDING TH AT THERE IS IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 4 ERROR APPARENT FROM RECORD IN VIEW OF JUDGMENT OF T HE J & K HIGH COURT IN SHREE BALAJI CASE (333 ITR 336). 2. THAT THE LD. CIT(A) HAS ALSO NOT BEEN JUSTIFIED IN LAW TO HOLD THAT THE EXCISE DUTY REFUND IS CAPITAL RECEIPT AS H E WAS BOUND TO FOLLOW THE LAW DECLARED BY THE JURISDICTIONAL HIGH COURT IN SHREE BALAJIS CASE(333 ITR 335 (J&K)) IN VIEW OF T HE JUDGMENT OF THE HNBLE SUPREME COURT IN EAST INDIA COMMERCIAL CO. LTD. VS. COLLECTOR OF CUSTOM AIR1962 SC 1893. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPEAL EFILED BY THE APPELLANT IS LIABLE TO BE DISMISSED. 6. SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS IS IDENTICAL, THEREFORE, BOTH THE APPEALS ALONGWITH C.OS ARE BEING TAKEN UP BY THIS CONSOLIDATED ORDER. 7. THE BRIEF FACTS OF THE CASE IN BOTH THE CASES AR E THAT WHILE FILING RETURN OF INCOME, THE ASSESSEE CLAIMED EXCISE DUTY REFUND AND INTEREST SUBSIDY AS REVENUE RECEIPT AND THE ASSESSMENT ORDER WAS PASSED ON 29.12.2011 FOR THE A.Y. 2009-10 AND ON 11.03.2013 FOR THE A.Y. 2010-11 . IN THE MEANTIME, THE HONBLE J & K HIGH COURT, IN THE CASE OF SHREE BALA JI ALLOYS, REPORTED IN (2011) 333 ITR 335 HELD THAT EXCISE DUTY REFUND A ND INTEREST SUBSIDY IS CAPITAL RECEIPT. THE ASSESSEE MOVED AN APPLICATION U/S 154 OF THE ACT FOR TREATMENT OF THE SAID EXCISE DUTY REFUND AND INTERE ST SUBSIDY AS CAPITAL RECEIPT, WHICH WAS REJECTED BY THE ACIT, CENTRAL CI RCLE, JAMMU VIDE ORDER IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 5 DATED 08.03.2013 FOR THE AY 2009-10 AND VIDE ORDER DATED 10.06.2013 FOR THE AY 2010-11. 8. THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE AND THE RELEVANT FINDING OF THE LD. CIT(A) ARE REPRODUCED HEREINBEL OW: THE APPELLANT IS AGGRIEVED AGAINST THE ORDER OF TH E ASSESSING OFFICER PASSED U/S 154 OF THE INCOME TAX ACT, 1961, WHEREIN THE ASSESS EES CLAIM OF INTEREST AND EXCISE DUTY SUBSIDY BEING CAPITAL RECEIPT HAD BEEN REJECTED. THE AO HAS RECORDED IN THE IMPUGNED ORDER THAT THE ASSESSEE HAD ITSELF CATEGORIZED THE IMPUGNED ITEMS AS REVENUE RECEIPTS AND ALSO THE INCOME TAX DEPARTM ENT HAD FILED AN SLP BEFORE THE HONBLE SUPREME COURT OF INDIA AGAINST THE DEC ISION OF THE HONBLE J & K HIGH COURT IN THE CASE OF SHREE BALAJI ALLOYS REPOR TED AS 333 ITR 35. THE APPELLANT DURNG THE COURSE OF APPELLATE PROCEEDINGS HAS REITERATED ITS CLAIM THAT ON THE BASIS OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF JAMMU & KASHMIR IN THE CASE OF SHREE BALAJI ALLOYS, THE REC EIPTS ON ACCOUNT OF EXCISE DUTY REFUND AND INTEREST REFUND SUBSIDY WERE HELD TO BE IN THE NATURE OF CAPITAL RECEIPTS AND NOT TAXABLE AT ALL. I HAVE PERUSED THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT OF JAMM7 KASHMIR RELIED UPON BY THE AR THAT I T IS SEEN THAT THE FACTS OF THE CASE ARE ON THE SAME FOOTINGS AS IN THE CASE OF TH E ASSESSEE AND THAT IS WHY THE AO HAS NOT BEEN ABLE TO DISTINGUISH THE TWO. HOWEV ER, IT IS INCORRECT IN LAW ON THE PART OF THE AO TO NOT GIVE EFFECT TO THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT ON THE GROUND THAT SLP IN THE HONBLE SU PREME COURT AGAINST THE SAID DECISION HAS BEEN FILED. I AM IN AGREEMENT WIT H THE CLAIM OF THE APPELLANT ON THE ISSUE AS, AS FAR AS THE ASSESSEE IS CONCERNED A ND IMPUGNED RECEIPTS ARE CLEARLY IN THE NATURE OF CAPITAL RECEIPTS IN VIEW OF THE CA TEGORICAL DECISION OF HONBLE COURT OF JAMMU & KASHMIR. AS SUCH, THE AO IS DIRECT ED TO CARRY OUT THE RECTIFICATION AS REQUESTED BY THE APPELLANT. 9. THE LD. DR ARGUED THAT THE ASSESSEE HIMSELF HAD DECLARED IN THE RETURN OF INCOME, THE EXCISE DUTY REFUND AND INTERE ST SUBSIDY AS REVENUE RECEIPT AND THE SAID RETURN OF INCOME HAS BEEN PROC ESSED U/S 143(1) OF THE INCOME TAX ACT, 1961. IT WAS ARGUED THAT RECTIFICAT ION U/S 154 OF THE ACT, CAN BE DONE, IF THERE IS A MISTAKE OF THE AO AND TH E SAME CANNOT BE RECTIFIED IF THERE IS A MISTAKE OF THE ASSESSEE. IN THE PRESE NT CASE, THE ASSESSEE HAS IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 6 COMMITTED A MISTAKE BY NOT INCLUDING EXCISE DUTY R EFUND AND INTEREST SUBSIDY MENTIONED HEREINABOVE, AS CAPITAL RECEIPT I N THE RETURN OF INCOME. ACCORDINGLY, THE LD. CIT(A) IS NOT JUSTIFIED IN DIR ECTING THE AO TO CARRY OUT THE RECTIFICATION U/S 154 OF THE ACT. 10. THE LD. COUNSEL FOR THE ASSESSEE, MR. TARUN BAN SAL, ADVOCATE, ON THE OTHER HAND, STRONGLY RELIED UPON THE DECISION OF TH E CIT(A) AND ARGUED THAT IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08, ON IDENTICAL ISSUE , THE APPEAL OF THE REVENUE HAS BEEN DISMISSED AND CO PY OF THE RELEVANT ORDER OF THE ITAT, AMRITSAR BENCH, DATED 16.01.2015 IN ITA NO.130(ASR)/2014 HAS BEEN PLACED ON RECORD. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE ARE OF THE VIEW THAT THE ISSUE IN BOTH THE APPE ALS I.E. THE APPEALS FOR AY 2009-10 AND 2010-11 REFERRED TO HEREINABOVE ARE IDE NTICAL TO THE ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 WHICH HAS BEEN DECIDED BY US IN ITA NO.130(ASR)/2014 DATED 16.01. 2015. FOR THE SAKE OF CONVENIENCE, THE RELEVANT FINDINGS GIVEN IN THE CA SE OF THE ASSESSEE IN ITA NO.130(ASR)/2014 DATED 16.01.2015 FOR THE AY 2007-0 8 ARE REPRODUCED HEREINBELOW: 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE ASSESSEE CLAIMED EXCISE DUTY REFUND AND INTEREST SUBSIDY AS REVENUE RECEIPT IN THE RETURN OF INCOME AND THE ASSESSMENT ORDER WAS P ASSED ON IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 7 17.12.2009. THE HONBLE JURISDICTIONAL HIGH COURT O F J & K IN THE CASE OF SHREE BALAJI ALLOYS VS CIT (SUPRA) VIDE ORD ER DATED 31.03.2011, HAS HELD THE SAID EXCISE DUTY REFUND AN D INTEREST SUBSIDY AS CAPITAL RECEIPT. THE ASSESSEE MOVED AN APPLICATI ON U/S 154 OF THE ACT BEFORE THE AO WHICH WAS REJECTED. THE ARGUMENTS MADE BY THE LD. DR THAT THERE CANNOT BE ANY RECTIFICATION, IF T HE MISTAKE IS COMMITTED BY THE ASSESSEE AND IT CAN ONLY BE RECTIF IED WHEN IT IS A MISTAKE DONE BY THE AO. NOW, THE QUESTION ARISES WH ETHER POWER U/S 154 CAN BE INVOKED WHEN THE ISSUE IS DECIDED IN F AVOUR OF ASSESSEE BY THE JURISDICTIONAL HIGH COURT AFTER THE ORDER B Y AN AUTHORITY HAS BEEN PASSED. IN THIS REGARD, THE LD. COUNSEL FOR TH E ASSESSEE, MR. TARUN BANSAL, RELIED UPON THE DECISION OF THE HON BLE PUNJAB & HARYANA HIGH COURT (FB) IN THE CASE OF CIT VS. SMT. ARUNA LUTHRA (SUPRA), WHERE THE FACTS AND THE DECISION OF THE HO NBLE HIGH COURT ARE REPRODUCED FOR THE SAKE OF CONVENIENCE HEREINBE LOW: THE POWER GIVEN TO THE AUTHORITY UNDER SECTION 154 OF THE INCOME-TAX ACT, 1961, IS VERY WIDE. IT CAN CORRECT ANY MISTAKE PROVIDED IT IS APPARENT FROM THE RECORD. SECTION 154 DOES NOT PROVIDE THAT THE ERRO R HAS TO BE SEEN IN THE ORDER WITH REFERENCE TO THE DATE WHICH IT WAS PASSED. THE MISTAKE HAS TO BE ON THE RECORD OF THE CASE. THE RECORD WOULD INCLUDE EVERYT HING ON THE CASE FILE. THE RETURN, THE EVIDENCE AND THE ORDER ARE A PART OF TH E RECORD. THUS, EVEN IN HE CASE OF AN ASSESSMENT U/S 143(1), IT CANNOT BE ASSUMED T HAT THERE CAN BE NO ERROR APPARENT FROM THE RECORD. SECTION 154 HAS BEEN ENAC TED TO ENABLE THE AUTHORITY TO RECTIFY THE MISTAKE. THE LEGISLATIVE INTENT IS N OT TO ALLOW IT TO CONTINUE. THIS PURPOSE HAS TO BE PROMOTED. THE LEGISLATURES WILL HAS TO BE CARRIED OUT. BY PLACING A NARROW CONSTRUCTION, THE OBJECT OF THE LEGISLATION WOULD BE DEFEATED. PARLIAMENT HAS PRESCRIBED A PERIOD OF FOUR YEARS FO R CORRECTION OF MISTAKE. WHILE AN ASSESSMENT U/S 143 OR 144 HAS TO BE NORMALLY MAD E WITHIN A PERIOD OF ONE OR TWO YEARS, THE MISTAKE CAN BE RECTIFIED AT ANY TIME DURING THE PERIOD OF FOUR YEARS. THE OBVIOUS INTENTIONS WITHIN THE PRESCRIBED TIME, IT SHOULD NOT BE ALLOWED TO CONTINUE. SECTION 154 CLEARLY PROVIDES FOR THE I NTERVENTION OF THE AUTHORITY WITHIN THE SPECIFIED TIME, SUBJECT TO THE CONDITIO N THAT THE MISTAKE IS APPARENT AND THE ISSUE IS NOT DEBATABLE. THUS, ANY RIGHT UNDER A N ORDER IS SUBJECT TO THE PROVISIONS OF THE STATUTE. THAT BEING SO THERE IS NO VESTED RIGHT WHICH CAN BE SAID TO HAVE BEEN TAKEN AWAY. THE PROVISION HAS INBUILT SAFEGUARDS. IT PROVIDES FOR THE ISSUE OF NOTICE. IT ENSURES THE GRANT OF AN OPPORTU NITY TO BE HEARD. IT LIMITS THE JURISDICTION OF THE AUTHORITY. THE ACTION CAN BENEF IT THE ASSESSEE AS WELL AS THE REVENUE. IN THIS SITUATION, THERE IS NO GROUND FOR PLACING AN UNDULY RESTRICTED INTERPRETATION ON THE PROVISION. THE POWER U/S 154 CAN BE INVOKED EVEN WHEN AN ISSUE IS DECIDED BY THE JURISDICTIONAL HIGH COURT O R A SUPERIOR COURT AFTER THE ORDER HAD BEEN PASSED. IN HER RETURN FOR THE ASSESSMENT YEAR 1987-88, THE ASSESSEE CLAIMED A DEDUCTION FROM THE PROFITS OF BUSINESS, OF A SUM REPRESENTING LOSS IN CHIT FUND. THIS WAS IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 8 ALLOWED IN AN ASSESSMENT U/S 143(1). SUBSEQUENTLY, ON THE BASIS OF A JUDGMENT OF THE HIGH COURT HOLD THAT THE TRANSACTIONS DID NOT INVOLVE ANY TAXABLE INCOME OR REVENUE EXPENDITURE, THE ASSESSING OFFICER ADDED TH E SUM IN QUESTION, IN PROCEEDINGS U/S 154. THE TRIBUNAL HELD IN FAVOUR OF THE ASSESSEE. ON APPEAL: HELD, THAT THE DISPUTE RELATED TO THE ASSESSMENT YE AR 1987-88. THE PARTIES HAD BEEN LITIGATING FOR MORE THAN 13 YEARS. THE ULTIMAT E TAX EFFECT WAS LIMITED. THUS, EVEN THOUGH THE DECISION ON THE QUESTION OF LAW WAS IN FAVOUR OF THE REVENUE, THE ORDER PASSED BY THE TRIBUNAL WAS NOT BEING INTERFER ED WITH. 6.1. ALSO THE DECISION OF THE HONBLE KERALA HIGH C OURT, IN THE CASE OF KIL KOTAGIRI TEA AND COFFEE ESTATES CO. LTD. (SU PRA) RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, MR. TARUN BANSAL, ADVOCATE, IS REPRODUCED FOR THE SAKE OF CONVENIENCE (HEAD NOTE) HEREINBELOW:- AN ORDER OF ASSESSMENT, BASED UPON AN INTERPRETATION OR APPLICATION OF LAW WHICH IS ULTIMATELY FOUND TO BE WRO NG IN THE LIGHT OF JUDICIAL PRONOUNCEMENTS RENDERED SUBSEQUENTLY, DISCLOSES A MISTAKE APPARENT FROM THE RECORD WHEN THE COUR T DECIDES A MATTER, IT DOES NOT MAKE THE LAW IN ANY SENSE BUT ALL IT DOES IS THAT IT INTERPRETS THE LAW AND STATES WHAT THE L AW HAS ALWAYS BEEN AND MUST BE UNDERSTOOD TO HAVE BEEN WHERE AN ORDER IS MADE BY AN AUTHORITY, ON THE BASIS OF A PART ICULAR DECISION, THE REVERSAL OF SUCH DECISION IN FURTHER PROCEEDI NGS WILL JUSTIFY A RECTIFICATION OF THE ORDER BASED ON THAT DECIS ION. A BINDING DECISION RENDERED BY A COURT IS ALWAYS RETROSPECTIVE AND THE DECISION WHICH IS OVERRULED WAS NEV ER THE LAW. THE OVERRULING DECISION SHOULD BE DEEMED TO HAVE BEEN IN FORCE EVEN ON THE DAY WHEN THE ORDER SOUGHT TO BE RECT IFIED WAS PASSED. A SUBSEQUENT BINDING DECISION OF THE SUPREME CO URT OR OF THE HIGH COURT HAS RETROSPECTIVE OPERATION AS IN THE CASE OF SUBSEQUENT LEGISLATION AND OVERRULING IS ALWAYS RETROS PECTIVE. SECTION 254(2) AND SECTION 154 OF THE INCOME-TAX ACT ENA BLE THE CONCERNED AUTHORITIES TO RECTIFY ANY MISTAKE APPARENT FR OM THE RECORD THE SAID EXPRESSION HAS A WIDER CONTENT THAN THE EXPRESSION ERROR APPARENT ON THE FACE OF THE RECORD OCCU RRING IN ORDER 47, RULE 1 OF THE CIVIL PROCEDURE CODE THE REST RICTIONS ON THE POWER OF REVIEW UNDER ORDER 47, RULE 1, CIVIL P ROCEDURE CODE, 1908. THE RESTRICTIONS ON THE POWER OF REVIEW U /S 47, RULE 1, I DO NOT HOLD GOOD IN THE CASE OF SECTION 254(2) AND SECTION 154 OF THE INCOME-TAX ACT. IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 9 EVEN FOR THE PURPOSE OF ORDER 47, RULE 1 OF THE CIVI L PROCEDURE CODE, 1908, WHICH IS MORE RESTRICTIVE, A SUBSEQUENT BINDI NG AUTHORITY TAKING A DIFFERENT VIEW OF LAW IS A GOOD G ROUND FOR REVIEW, ON THE GROUND THAT THE ORDER SOUGHT TO BE RE VIEWED PASSED ON AN ANTECEDENT DECISION, WHICH STANDS OVERRULED, CONSTITUTES AN ERROR APPARENT ON THE FACE OF THE RECORD. FOR THE ASSESSMENT YEAR 1974-75, THE ASSESSEE CLAIMED INTERE ST ON THE ADVANCE TAX PAID BY IT IN EXCESS BUT BEYOND THE DUE DATES. THE INCOME TAX OFFICER DISALLOWED THE CLAIM OF T HE ASSESSEE. THE COMMISSIONER (APPEALS) UPHELD THE CLAIM OF T HE ASSESSEE. THE TRIBUNAL FOLLOWING THE DECISION OF A SINGLE JUDGE OF THE KERALA HIGH COURT IN A.SETHUMADHAVAN V. CIT (198 0) 122 ITR 587 (KER.) BY ORDER DATED OCTOBER 31, 1981, HELD THAT THE BELATED PAYMENTS WERE NOT TO BE TAKEN INTO ACCOUNT AS A DVANCE TAX FOR THE PURPOSE OF SECTION 214 OF INCOME-TAX ACT, 19 6, AND HENCE INTEREST WAS NOT ADMISSIBLE FOR SUCH BELATED PAYMENT S. A DIVISION BENCH OF THE HIGH COURT BY ORDER DATED JANUAR Y 22, 1982 IN SANTHA S. SHENOY V. UNION OF INDIA (1982) 1 35 ITR 39 (KER) REVERSED THE DECISION OF THE SINGLE JUDGE IN A SETHUMADHAVAN V. CIT (1980) 122 ITR 587 AND HELD T HAT PAYMENTS OF TAX MADE WITHIN THE FINANCIAL YEAR, THOUG H NOT WITHIN SPECIFIED DATES SHOULD BE TREATED AS ADVANCE TAX AND THE ASSESSEE WAS ENTITLED TO INTEREST ON THE EXCESS TAX PAID. TH E ASSESSEE FILED AN APPLICATION U/S 154 FOR RECTIFICATION OF THE ORDER OF THE TRIBUNAL DATED OCTOBER 31, 1981, IN VIEW OF T HE DECISION OF THE DIVISION BENCH IN SANTHA S.SHENOY V. UNION OF IN DIA (1982) 135 ITR 39 (KER.), HOLDING THAT INTEREST WAS ADMISSIBLE EVEN FOR BELATED PAYMENTS OF ADVANCE TAX. THE TRIBUNAL DISMISSED THE APPLICATION ON THE GROUND THAT RECTIFICATION U/S 154 O F THE ACT MUST BE OF A MISTAKE WHICH WAS A MISTAKE IN THE LIGHT O F THE LAW IN FORCE AT THE TIME WHEN THE ORDER SOUGHT TO BE RECT IFIED WAS PASSED AND THE SUBSEQUENT DECISION OF THE DIVISION BENCH O F THE HIGH COURT HAD NO RETROSPECTIVE OPERATION AS IN THE CASE OF SUBSEQUENT LEGISLATION OR THE DECISION OF THE SUPREME C OURT. ON AN ORIGINAL PETITION FILED BY THE ASSESSEE CHALLENGING T HE ORDER OF THE TRIBUNAL: HELD: THAT THE ORDER PASSED BY THE APPELLATE TRIBUNAL DATED OCTOBER 31, 1981, RELYING ON THE DECISION OF THE SINGL E JUDGE IN SETHUMADHAVANS CASE (1980) 122 ITR 587 (KER.), DISCL OSED A MISTAKE APPARENT FROM THE RECORD, IN THE LIGHT OF THE SUBSEQUENT OVERRULING OF THE VERY DECISION RELIED ON BY THE APP ELLANT TRIBUNAL, BY A DIVISION BENCH IN THE DECISION REPORTED IN SANTHA IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 10 S. SHENOYS CASE (1982) 135 ITR 39 (KER). WHEN THE BEN CH OF THE HIGH COURT OVERRULED THE DECISION OF THE SINGLE JUD GE IN SETHUMADHAVANS CASE (1980) 122 ITR 587 (KER.), THE EARLIER DECISION WAS NEVER THE LAW. THE LAW ON THE POINT AT ALL TIMES WAS AS STATED BY THE BENCH IN THE DECISION REPORTED IN SA NTHA S. SHENOYS CASE (1982) 135 ITR 39 (KER.) THE APPLICATION FOR RECTIFICATION, DATED JUNE 17, 1982 WAS WITHIN FOUR YEA RS FROM THE DATE OF THE ORDER OF THE TRIBUNAL, AND WAS ONE FILED WITHIN THE TIME ALLOWED BY LAW. THE ORDER PASSED BY THE APPELLAT E TRIBUNAL IN THE APPEAL DISCLOSED A MISTAKE APPARENT FROM THE RECO RD, AS IT HELD THAT THE ASSESSEE WAS NOT ENTITLED TO INTEREST ON T HE ADVANCE-TAX PAID BEYOND THE DUE DATE, WHICH HAD TO BE RECTIFIED. THIS SHOULD HAVE BEEN DONE BY THE APPELLATE TRIBUNAL IN EXERCISE OF THE POWERS VESTED IN IT U/S 254(2) READ WITH SECTION 154 OF THE INCOME-TAX ACT. {THE APPELLATE TRIBUNAL WAS DIRECTED TO DISPOSE OF TH E APPLICATION FOR RECTIFICATION IN THE LIGHT OF SECTION 25 4(2) READ WITH SECTION 154 OF THE INCOME TAX ACT AND IN ACCORDANC E WITH THE LAW. 7. FURTHER, LATELY, VIDE ORDER DATED 24.11.14, PAS SED IN CWP NOS. 2548, 2722 AND 2152 OF 2014, IN THE CASE OF SUPREM E INDUSTRIES LTD. VS. THE ADDITIONAL COMMISSIONER OF INCOME-TAX AND OTHERS, THE HONBLE BOMBAY HIGH COURT HAS HELD, FOLLOWING THE D ECISION OF THE HONBLE SUPREME COURT IN GRINDLAYS BANK LTD. VS. C ENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, 1980 SCC 420, WHIL E DEALING WITH A SIMILAR SITUATION, THOUGH UNDER SECTION 254 OF THE INCOME TAX ACT, THAT: 12. IT IS A SETTLED POSITION IN LAW THAT EVERY AUTH ORITY EXERCISING QUASI JUDICIAL POWERS HAS INHERENT/INCID ENTAL POWER IN DISCHARGING OF ITS FUNCTIONS TO ENSURE THAT JUST ICE IS DONE BETWEEN PARTIES I.E. NO PREJUDICE IS CAUSED TO ANY OF THE PARTIES. THIS POWER HAS NOT TO BE TRACED TO ANY PROVISION OF THE ACT BUT INHERES IN EVERY QUASI JUDICIAL AUTHORITY. THIS HA S BEEN SO HELD BY THE SUPREME COURT IN GRINDLAYS BANK LTD. VS. CEN TRAL GOVERNMENT INDUSTRIAL TRIBUNAL 1980 SCC 420. THEREF ORE, THE AFORESAID PRINCIPLE OF LAW SHOULD HAVE BEEN ADOPTED BY THE TRIBUNAL. IT IS EXPECTED FROM THE TRIBUNAL TO ADOP T A JUSTICE ORIENTED APPROACH AND NOT DEFEAT THE LEGITIMATE RI GHTS O THE ALTAR OF PROCEDURES AND TECHNICALITIES. THIS IS PAR TICULARLY SO IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 11 WHEN THERE IS NO SPECIFIC BAR IN THE ACT TO CORRECT AN ORDER PASSED ON RECTIFICATION. 13. IT IS FUNDAMENTAL PRINCIPLE OF LAW THAT NO PART Y SHOULD BE PREJUDICED ON ACCOUNT OF ANY MISTAKE IN THE ORDER O F THE TRIBUNAL. THOUGH NOT NECESSARY FOR THE DISPOSAL OF THIS PETITION, WE EXPRESS OUR DISAPPROVAL OF THE STAND TAKEN IN TH E IMPUGNED ORDER THAT SECTION 254(2) OF THE ACT ARE MEANT ONLY FOR RECTIFYING THE MISTAKES OF THE TRIBUNAL AND NOT OF THE PARTIES. THE TRIBUNAL AND THE PARTIES ARE NOT ADVERSARIAL TO EACH OTHER. IN FACT, THE TRIBUNAL AND THE PARTIES NORMALLY REPR ESENTED BY ADVOCATES/CHARTERED ACCOUNTANTS ARE COMRADES IN ARM S TO ACHIEVE JUSTICE. THEREFORE, A MISTAKE FROM ANY SOUR CE BE IT-THE PARTIES OR THE TRIBUNAL SO LONG AS IT BECOMES A PAR T OF THE RECORD, WOULD REQUIRE EXAMINATION BY THE TRIBUNAL U NDER SECTION 254(2) OF THE ACT. IT CANNOT BE DISMISSED A T THE THRESHOLD ON THE ABOVE GROUND. 8. THUS, THIS ISSUE, IT IS SEEN, HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE SUPREME COURT AS WELL AS BY VARIOUS HONBLE HIGH COURTS ACROSS THE COUNTRY. THE DEPARTMENT HAS NOT BEEN ABLE TO CITE ANY DECISION TO THE CONTRARY. THUS, THE LEGAL POSITION IN THIS REGARD IS UNANIMOUS AND THERE IS NO DIVERGENCE OR CLEAVAGE OF OPINION INTERSE AMONGST THE COURTS WITH REGARD THERETO. 9. IN THE FACTS AND CIRCUMSTANCES AND IN VIEW OF TH E DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SMT. ARUNA LUTHRA (SUPRA), THE DECISION OF THE HONBLE KERALA HIGH COURT, IN THE CASE OF KIL KOTAGIRI TEA AND COFFEE ESTATES CO. LTD. (SUPRA) AND ALSO IN THE CASE OF SUPREME INDUSTRIES (SUPRA), IN THE PRESENT CASE, WE FIND THAT THERE IS A MISTAKE APPA RENT FROM RECORD U/S 154 OF THE ACT. BY DERIVING THE SUPPORT OF THE DECI SIONS OF BOTH THE HONBLE COURTS HEREINABOVE, WE ARE OF THE VIEW THAT SECTION 154 HAS BEEN ENACTED TO ENABLE THE AUTHORITIES TO RECTIFY THE MISTAKE WHETHER THE MISTAKE IS DONE BY ASSESSEE OR BY AO. THE LEGIS LATIVE INTENT IN SECTION 154 IS NOT TO ALLOW A MISTAKE TO CONTINUE . A LIBERAL CONSTRUCTION OF THE STATUTE HAS TO BE MADE ELSE TH E OBJECT OF THE LEGISLATION SHALL BE FORFEITED. ACCORDINGLY, THE AR GUMENTS BY LD. DR CANNOT HELP THE REVENUE. THEREFORE, IN THE CIRCUMST ANCES AND FACTS OF THE PRESENT CASE, HONBLE JURISDICTIONAL COURT OF J & K HAVING HELD IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 12 THE EXCISE DUTY REFUND AND INTEREST SUBSIDY RECEIV ED BY THE ASSESSEE AS CAPITAL RECEIPTS IS A DECISION SUBSEQUENT TO THE DECISION OF AO DATED 17.12.2009 WHERE SUCH RECEIPTS HAVE BEEN ACCEPTED AS REVENUE AS RETURNED BY THE ASSESSEE. ACCORDINGLY, IN VIEW OF T HE DECISION IN THE CASE OF SMT. ARUN LUTHRA (SUPRA) AND KIL KOTAGIRI T EA AND COFFEE ESTATES LTD. (SUPRA), WE ARE OF THE VIEW THAT THERE IS A MISTAKE APPARENT FROM RECORD WHICH IS RECTIFIABLE U/S 154 O F THE ACT AND THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO CARRY OU T THE NECESSARY RECTIFICATION AND THE ORDER OF THE LD. CIT(A) IS FO UND TO BE WELL REASONED ONE AND WE FIND NO INFIRMITY IN THE SAME. 12. AS REFERRED TO HEREINABOVE, SINCE THE ISSUE IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE DECIDED BY US IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 IN ITA NO.130(ASR)/2014 DATED 16.01.20 14, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND WE AR E OF THE VIEW THAT THERE IS A MISTAKE APPARENT FROM THE RECORD, WHICH IS RECTIFIA BLE U/S 154 OF THE ACT AND THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO CARRY OUT NECESSARY RECTIFICATION AND THE ORDER OF THE LD. CIT(A) IS F OUND TO BE WELL REASONED ONE. ACCORDINGLY, ALL THE GROUNDS OF THE REVENUE IN BOTH THE APPEALS ARE DISMISSED. 13. AS REGARDS C.O. NOS. 62 & 63(ASR)/2014 IN BOTH THE ASSESSMENT YEARS, THEY ARE, IN FACT, SUPPORTIVE TO THE ORDER OF THE LD. CIT(A) AND THE ASSESSEE DOES NOT HAVE ANY GRIEVANCE IN THE SAID C. OS AND THEREFORE, THE SAME ARE INFRUCTUOUS AND ARE DISMISSED ACCORDINGLY. IT A NOS. 618 & 619(ASR)/2014 C.O.NOS.62 & 63(ASR)/2014 13 14. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE IN ITA NOS. 618 & 619(ASR)/2014 AND C.O.NOS. 62 & 63(ASR)/2014 OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH MARCH, 2015. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17TH MARCH, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. KASHMIR STEEL ROLLING MILLS, JAMM U. 2. THE DCIT, C.C. JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER