MAFATLAL INDUSTRIES LTD, MUMBAI V. DCIT CIR 9 (2), MUMBAI

ITA 1325/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8073 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 05-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: K K VED
• Section: 143(3); 244A; 246

Judgement Text

1 MAFATLAL I.T.A.NO .1325/MUM/2015 IN THE INCOME TAX APPELLATE TRIBUNNAL MUMBAI BENCH B , MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER ) AND SHRI ASHWANI TANEJA ( ACCOUNTANT MEMBER) I.T.A.NO. 1325/MUM/2015 ( ASSESSMENT YEARS 2006-07) MAFATLAL INDUSTRIES LIMITED, AS A SUCCESSOR TO MAFATLAL DENIM LIMITED,, KALEDONIA, OFF NO.3, 6 TH FLOOR, SAHAR ROAD, ANDHERI(E), MUMBAI- 400089. V/S DCIT CIR 9(2) AAYAKAR BAVAN, M.K.MARG MUMBAI. PAN AAACM2813L APPELLANT RESPONDENT APPELLANT BY SHRI K.K. VED (AR) RESPONDENT BY SHRI SUMAN KUMAR (DR) DATE OF HEARING 08.03.2017 DATE OF ORDER 09.03.2017 O R D E R PER ASHWANI TANEJA, AM:- THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-20, MUMBAI [HEREINAFTER CALLED CIT(A)] DATED 05.11.2014 PASSED AGAINST THE ASSESSM ENT ORDER OF THE YEAR DATED 30.12.2008 U/S 143(3) OF THE ACT FOR ASSESSME NT YEAR 2006-07 ON THE FOLLOWING GROUNDS:- GROUNDS OF APPEAL:- I : RE.: DISMISSING THE APPEAL BY HOLDING THAT NO APPEALABLE 2 MAFATLAL I.T.A.NO .1325/MUM/2015 ISSUE AROSE FROM THE IMPUGNED ORDER: 1 : THE COMMISSIONER OF INCOME-TAX HAS ERRED IN HO LDING THAT NO APPEALABLE ISSUE AROSE FROM THE ASSESSING OFFICER'S IMPUGNED ORDER PURPORTING TO GIVE EFFECT TO THE ORDER DATED 21 DECEMBER 2011 PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL AN D IN DISMISSING THE APPEAL BY FURTHER HOLDING THAT THE A PPELLANT SHOULD APPROACH THE ASSESSING OFFICER FOR REDRESSIN G THE GRIEVANCE. 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW ON SUBJECT TH E ASSESSING OFFICER'S ORDER WAS APPEALABLE AND THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE ADJUDICATED THE SAME. 1: 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFIC ER BE DIRECTED TO GIVE FULL AND COMPLETE EFFECT TO THE AFORESAID ORDE R OF THE INCOME- TAX APPELLATE TRIBUNAL. 2 : DEDUCTION OF LICENSE AND TECHNOLOGY FEES RESTRICTED TO 50% OF THE AMOUNT PAID I.E. RS. 1,67,65,741/- AS AGAINS T 100% AS DIRECTED BY THE INCOME-TAX APPELLATE TRIBUNAL VIDE ORDER DATED 21 DECEMBER 2011: 2 : 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERR ED IN HOLDING THAT THE APPELLANT'S GRIEVANCE ABOUT THE AS SESSING OFFICER'S FAILURE TO GRANT RELIEF ON THE ISSUE AS D IRECTED BY THE HON'BLE ITAT IS NOT AN APPEALABLE ISSUE. 2 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF THE CASE AND THE LAW PREVAILING OI L SUBJECT THE ASSESSING OFFICER WAS DUTY BOUND TO GIV E FULL EFFECT TO THE ORDER OF THE HON'BLE ITAT AND HA VING FAILED IN THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE DIRECTED HIM TO DO SO. 2 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OF FICER BE DIRECTED TO GRANT THE DEDUCTION OF THE LICENSE AND TECHNOLOGY GEES PAID AND TO RE-COMPUTE ITS TOTAL IN COME ACCORDINGLY. 3 : 1 EXCESS LEVY OF INTEREST OF RS. 6,71,1 46/- U/S. 220(2) OF THE INCOME-TAX ACT,1961 3 : 1 THE ASSESSING OFFICER HAS ERRED IN LEVYING EXCESS 4 3 MAFATLAL I.T.A.NO .1325/MUM/2015 INTEREST TO THE EXTENT OF RS. 6,71,146/- U/S. 220 (2) WHILE COMPUTING THE TAX LIABILITY / REFUND OF THE A PPELLANT. 3 : 2 THE APPELLANT SUBMITS THAT CONSIDERING TH E FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT INTEREST U/S. 220(2) OF THE INCOME-TAX ACT, 1961 CAN BE LEVIED ONLY TO THE EXTENT OF RS. 2,693/- AND THE STAND TAKEN BY THE ASSESSING OFFICER IN THIS REGARD IS ERRONEOUS AND NOT IN ACCORDANCE WITH LAW. 3 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OF FICER BE DIRECTED TO DELETE THE EXCESS INTEREST SO LEVIED AN D TO RE- COMPUTE TAX LIABILITY / REFUND ACCORDINGLY. 4 : 0 NON-GRANTING OF INTEREST U/S. 244A: 4 :1 THE ASSESSING OFFICER HAS ERRED IN NOT GRAN TING INTEREST U/S. 244A TO THE APPELLANT. 4 : 2 THE APPELLANT SUBMITS THAT, CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT IT IS ENTITLED TO INTEREST U/S. 244A OF THE INCOME- TAX ACT,1961. 4: 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFF ICER BE DIRECTED GRANT INTEREST U/S. 244A TO IT IN ACCORDAN CE WITH LAW AND TO COMPUTE THE AMOUNT OF TAX REFUND ACCORDINGLY . 5 : 0 GENERAL: 5 : 1 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AME ND, SUBSTITUTE AND / OR MODIFY IN ANY MANNER WHATSOEVER ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2. DURING THE COURSE OF HEARING, IT WAS SUBMITTE D AT THE OUTSET BY THE LD. COUNSEL OF THE ASSESSEE, THAT APPEAL OF ASSESSEE WA S DISMISSED BY LD. CIT(A) AS NON MAINTAINABLE AND THE SAME ISSUED HAD ARISEN IN ASSESSMENT YEAR 2003-04 ALSO WHEREIN THE TRIBUNAL, RELYING UPON THE JUDGEMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN CALTEX OIL REFINING IN DIA LTD VS CIT [1993] 202 ITR 375 HELD THAT ORDERS GIVING EFFECT TO THE DIRECTION S OF THE APPELLATE ORDERS ARE 4 MAFATLAL I.T.A.NO .1325/MUM/2015 MAINTAINABLE UNDER CLAUSE (C) TO SECTION 246 AND RE VERSED THE ORDER OF THE CIT(A) IN DISMISSING THE APPEAL AS NOT MAINTAINABLE VIDE ORDER DATED 15.05.2015 AND RESTORED THE ISSUE BACK TO THE FILE OF THE CIT(A) FOR DECIDING IT AFRESH ON MERITS AFTER CALLING FOR REMAND REPORT FR OM THE ASSESSING OFFICER. IT WAS REQUESTED THAT FOLLOWING THE ORDER OF THE TRIBU NAL , THIS YEARS APPEAL SHOULD ALSO BE SENT BACK TO CIT(A) TO BE DECIDED O N MERITS. 3. PER CONTRA LD. DR FAIRLY SUBMITTED THAT THE ISSUES CAN BE SENT BACK, BUT IT SHOULD BE SENT BACK TO THE FILE OF AO FOR VERIFYING PROPER FACTS AND FIGURES. 4 . WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES BY THE TRIBUNAL IN ASSESSMENT YEAR 2003-04, IT IS NOTE D THAT THE TRIBUNAL HELD IN ASSESSMENT YEAR 2003-04 AS UNDER:- AT THE VERY OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE GROUND NO.1 OF THE APP EAL AND MENTIONED THAT IT RELATES TO THE DECISION OF THE CI T (A) IN DISMISSING THE ASSESSEE'S APPEAL AS NOT MAINTAINABL E. BRIEF FACTS IN THIS REGARD ARE THAT THIS IS THE SECOND ROUND OF PROCEEDINGS BEFORE THE TRIBUNAL. IN THE FIRST ROUND, THE TRIBUN AL VIDE ITS ORDER DATED 21.12.2011, SET ASIDE THE ISSUES TO THE FILE OF THE AO AND ISSUED CERTAIN DIRECTIONS TO THE AO. ASSESSE E IS AGGRIEVED WITH THE ORDER OF THE AO GIVING EFFECT TO SAID ORDER OF THE [TAT (SUPRA). THEREFORE, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) U/S 246A OF THE ACT. ON T HESE FACTS, THE CIT (A) HELD THAT SUCH ORDER OF THE AO IS NOT APPEA LABLE BEFORE THE CIT (A). AGAINST THE SAID FINDING OF THE CIT (A ), ASSESSEE RAISED THE GROUND NO.1 ON THE ISSUE OF MAINTAINABIL ITY OF THE APPEAL. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE ARGUED THAT THE ORDER OF THE AO GIVING EFFECT TO THE ORDER OF T HE CIT (A) IS AN APPEALABLE ORDER BEFORE THE CIT (A) U/S 246A OF ACT, AS SUCH ORDERS OF THE AO ARE DEEMED AS ASSESSMENT ORDERS. I N ORDER TO SUBSTANTIATE ABOVE, LD COUNSEL FOR THE ASSESSEE FIE LD A COPY OF THE ORDER OF THE TRIBUNAL, DATED 6.3.2013 IN THE CA SE OF SATELLITE 5 MAFATLAL IND I.T.A.NO. 1325/MUM /2015 TELEVISION ASIAN REGION LIMITED VS. DEPUTY DIRECTOR OF INCOME TAX IN ITA NOS. 8639 TO 8641/MUM/2010 FOR THE AY5 2 000-01, 2001-02, 2002-03. REFERRING TO PARAS 3.3 AND 5 OF T HE SAID ORDER OF THE TRIBUNAL DATED 6.3.2013 (SUPRA), LD.CIT(A). COU NSEL DEMONSTRATED THAT THE FINDING OF THE TRIBUNAL FOR T HE PROPOSITION THAT SUCH ORDERS GIVING EFFECT TO THE O RDER OF THE [TAT CONSTITUTES ASSESSMENT ORDER AND THE SAME IS A PPEALABLE ORDER BEFORE THE APPELLATE AUTHORITIES. IN THIS REG ARD, LD COUNSEL READ OUT THE PARA 5 OF SAID TRIBUNAL'S ORDER AND TH E SAME IS EXTRACTED AS UNDER: 5.WE HAVE HEARD BOTH THE PARTIES AND PERUSE D THE MATERIAL ON RECORD. AS REGARDS THE VIEW OF THE LD CIT (A) TH AT ORDERS PASSED BY THE AO U/S 254 OF THE ACT GIVING EFFECT TO THE O RDER OF THE [TAT CANNOT BE APPEALED AGAINST U/S 2464 IT IS PERTINENT TO MENTION THAT THE JURISDICTIONAL HIGH COURT IN THE CASE OF CATEX OIL REFINING INDIA (LTD) VS. COMMISSIONER OF INCOME TAX HAS HELD THAT FRESH ORDER TO GIVE EFFECT TO AN APPELLATE ORDER IS ALSO AN ASSESSMENT ORDER A ND CAN BE A SUBJECT MATTER OF APPEAL BEFORE THE APPELLATE AUTHORITIES. RELYING ON THE SAID DECISION, WE ARE OF THE VIEW THAT THE RATIO OF THE TD U T THAT THE APPEAL BEFORE HIM BEING NOT MAINTAINABLE AND THUS BECOMES VOID AUTHORITIES BELOW INITIO IS LEGALLY UNTENABLE AND A LSO AGAINST THE SETTLED PRINCIPLE OF LAW. 5 . FROM THE ABOVE, IT EVIDENT THAT THE TRIBUNAL FOR COMING TO THE SAID CONCLUSIONS, RELIED ON THE JUDGM ENT OF THE HON'BLE JURISDICTIONAL HIGH COURT JUDGMENT IN T HE CASE OF CALTEX OIL REFINING INDIA (LTD) VS. CIT [1993} 202 ITR 375. ON PERUSAL OF THE SAID JUDGMENT, IT IS THE FINDING OF THE JURI SDICTIONAL HIGH COURT THAT THE ORDERS GIVING EFFECT TO THE DIRECTIO NS OF THE APPELLATE ORDERS ARE MAINTAINABLE UNDER CLAUSE (C) TO SECTION 246 OF THE ACT. THE SAID JUDGMENT IS APPLICABLE FOR THE AYS 1970-71 AND 1972-73 UNDER THE OLD PROVISIONS WHICH IS PARA MATERIA TO SECTION 246 OF THE ACT. CONSIDERING THE ORDER OF THE CIT (A) ON THE ISSUE OF MAINTAINABILITY OF APPEAL N EEDS TO BE REVERSED. CONSEQUENTLY, WE REMAND THIS ISSUE TO THE FILE OF THE CIT (A) WITH A DIRECTION TO ADMIT THE APPEAL AND AD JUDICATE THE ISSUES RAISED BY THE ASSESSEE ON MERITS MENTION ED IN GROUND NOS. 2 TO 12, IF ANY. FOR THIS, CIT (A) MAY CALL FOR REMAND REPORT, IF ANY, FROM THE AO IN ACCORDANCE WI TH THE 6 MAFATLAL IND I.T.A.NO. 1325/MUM /2015 PROVISIONS OF THE ACT. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6 . NO DISTINCTION HAS BEEN MADE ON LAW OR ON F ACTS, THEREFORE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, WE SEND ALL TH E ISSUES BACK TO THE FILE OF AO TO BE DECIDED AFRESH AFTER GIVING ADEQUATE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE AFTER TAKING INTO ACCOUNT ENTIRE MATERIAL AS MAY BE PLACED ON RECORD BY THE ASSESSEE. THE ASSESSEE SHALL BE FREE TO RAI SE ALL THE FACTUAL AND LEGAL ISSUES WITH RESPECT OF THE GROUNDS RAISED BEFORE US . 7 . THE ASSESSEE SHALL ALSO EXTEND REQUISITE COOPERA TION TO THE AO BY SUBMITTING DETAILS AND DOCUMENTARY EVIDENCE AS REQU IRED BY THE AO FROM TIME TO TIME, AS PER LAW. WITH THESE DIRECTIONS ALL THE GROUNDS ARE SENT BACK TO THE FILE OF THE AO TO BE DECIDED ON MERITS. 8 . AS A RESULT THIS APPEAL MAY BE TREATED AS ALL OWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF HEARING. SD/- SD/- (MAHAVIR SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 09.03.2017 KT/- COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , B, BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES