Shri A.S.Ibrahim Rowther, CHENNAI V. DCIT, CHENNAI

ITA 1343/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61018 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-03-2012
• Assessment Year: 1995-1996
• Appeal Filed On: 22-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B NANDHA KUMAR
• Assessee Lawyers: D ANAND
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1343/MDS/2011 (ASSESSMENT YEAR : 1995-96) SHRI A.S. IBRAHIM ROWTHER, NO.16, JAWAHARLAL NEHRU SALAI, ARUMBAKKAM, CHENNAI - 600 106. PAN : AAAPI4192B (APPELLANT) V. THE DEPUTY COMMISSIONER OF INCOME TAX, MEDIA CIRCLE I, CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY : SHRI D. ANAND RESPONDENT BY : SHRI B. NANDHA KU MAR, JCIT DATE OF HEARING : 28.03.2012 DATE OF PRONOUNCEMENT : O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, HIS GRIEVAN CE IS THAT THE ASSESSMENT FOR IMPUGNED ASSESSMENT YEAR WAS REOPENE D BASED ON A VDIS DECLARATION WHICH WAS NOT ACCEPTED BY THE DE PARTMENT BECAUSE THERE WAS DELAY IN REMITTING THE TAX, BUT W HICH WAS LATER ON DIRECTED BY THE HONBLE JURISDICTIONAL HIGH COURT T O BE ACCEPTED. I.T.A. NO. 1343/MDS/2011 2 2. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD FILED A RETURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING AN INCOME OF ` 3,66,735/- ON 31.10.1995. ON 26.12.1997, ASSESSEE WANTED TO TAKE AN ADVANTAGE OF VOLUNTARY DISCLOSURE OF INCOME SCHEME, 1997 (VDI S) AND ACCORDINGLY, A VDIS DECLARATION DECLARING THE ADDIT IONAL INCOME OF ` 70 LAKHS FOR THE IMPUGNED ASSESSMENT YEAR, WAS ALSO FILED. HOWEVER, THE TAX ON SUCH DECLARED INCOME WAS PAID L ATE. SINCE TAX WAS PAID AFTER THE STIPULATED PERIOD OF THREE MONTH S, THE DECLARATION WAS REJECTED BY THE CIT. SINCE THE INCOME STOOD AD MITTED, A.O. WAS OF THE OPINION THAT ASSESSMENT FOR THE IMPUGNED ASS ESSMENT YEAR HAD TO BE REOPENED. ACCORDINGLY, A NOTICE UNDER SE CTION 148 WAS ISSUED AND THE ASSESSMENT WAS THEREAFTER COMPLETED ASSESSING THE TOTAL INCOME ` 75,72,056/- INCLUDING THE SUM OF ` 70 LAKHS EARLIER DECLARED UNDER VDIS. 3. ASSESSEE MOVED IN APPEAL BEFORE LD. CIT(APPEALS) AGAINST THE ORDER OF ASSESSING OFFICER AND LD. CIT(APPEALS) DIS MISSED THE APPEAL AND UPHELD THE ASSESSMENT DONE BY THE A.O. MEANWHI LE, ASSESSEE ALSO FILED A WRIT PETITION BEFORE HONBLE JURISDICT IONAL HIGH COURT AGAINST NON-ACCEPTANCE OF HIS VDIS DECLARATION. AS SESSEE ALSO MOVED IN APPEAL BEFORE THIS TRIBUNAL AGAINST THE OR DER OF LD. I.T.A. NO. 1343/MDS/2011 3 CIT(APPEALS) CONFIRMING THE ASSESSMENT DONE BY THE A.O. HONBLE JURISDICTIONAL HIGH COURT ON ASSESSEES PETITION HE LD AS UNDER:- BOTH THE COUNSEL REPRESENTED THAT AN IDENTICAL QUES TION, AROSE FOR CONSIDERATION BEFORE THIS COURT WHERE THIS COUR T HAS PASSED THE ORDER SETTING ASIDE THE ORDER OF REJECTION PASS ED BY THE RESPONDENT AND DIRECTED THE RESPONDENT TO ISSUE A C ERTIFICATE TO THE PETITIONER THEREIN IN THE CASE OF E. PRAHALATHA BABU VS COMMISSIONER OF INCOME TAX REPORTED IN VOL.241- 2000.ITR 457. THIS JUDGMENT OF THE SINGLE JUDGE W AS CONFIRMED IN W.A.NO.2460 OF 1999 BY ORDER DATED 23. 12.1999. FOLLOWING THE PRINCIPLES LAID DOWN THEREIN, THIS WR IT PETITION IS ALLOWED. NO COSTS, CONSEQUENTLY, WMP NO.26215/99 I S ENCLOSED. 4. WHEN THE MATTER CAME UP BEFORE THIS TRIBUNAL, TH E DECISION OF JURISDICTIONAL HIGH COURT MENTIONED SUPRA WAS ALREA DY AVAILABLE. THEREFORE, THIS TRIBUNAL VIDE ITS ORDER DATED 4.3.2 008 IN I.T.A. NO. 1885/MDS/2004 REMITTED THE ISSUE BACK TO THE FILE O F ASSESSING OFFICER FOR CONSIDERING THE MATTER AFRESH IN THE LI GHT OF THE DIRECTION OF HONBLE JURISDICTIONAL HIGH COURT. HOWEVER, IN TH E FRESH PROCEEDINGS, TAKEN UP PURSUANT TO THE ORDER OF TRIBUNAL, THE ASS ESSING OFFICER WAS OF THE OPINION THAT ASSESSEE WAS UNABLE TO FURNISH THE CERTIFICATE ISSUED UNDER VDIS, AND THEREFORE, THE AMOUNT OF ` 70 LAKHS DECLARED UNDER VDIS ALSO WAS TO BE REOPENED. HE, THEREFORE, COMPLETED THE ASSESSMENT ONCE AGAIN INCLUDING THE SUM OF ` 70 LAKHS RETURNED UNDER VDIS. I.T.A. NO. 1343/MDS/2011 4 5. AGGRIEVED ASSESSEE MOVED IN APPEAL ONCE AGAIN BE FORE LD. CIT(APPEALS). AS PER THE ASSESSEE, IN VIEW OF THE DECISION DATED 13.11.2000 OF HONBLE JURISDICTIONAL HIGH COURT IN WRIT PETITION NO.18021/99, ASSESSEES VDIS DECLARATION HAD TO BE ACCEPTED. THEREFORE, THE SAID AMOUNT COULD NOT BE ONCE AGAIN CONSIDERED IN THE ASSESSMENT DONE FOR THE IMPUGNED ASSESSMENT YEAR. HOWEVER, LD. CIT(APPEALS) WAS NOT IMPRESSED. ACCORDING TO HIM, HONBLE APEX COURT IN THE CASE OF HEMALATHA GARGYA V. CIT (259 I TR 1) HAD HELD THAT TIME SCHEDULE FOR PAYMENT OF TAX UNDER VDIS 19 97 WAS MANDATORY AND COULD NOT BE EXTENDED. AS PER LD. CI T(APPEALS), ON ACCOUNT OF THIS JUDGMENT OF HONBLE APEX COURT, THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF E. PRAHLAT HA BABU V. CIT (241 ITR 457), WHICH WAS RELIED ON BY THE HONBLE JURISD ICTIONAL HIGH COURT, WHILE GIVING A DECISION IN FAVOUR OF THE ASS ESSEE STOOD OVERRULED. IN THIS VIEW OF THE MATTER, HE DISMISSE D THE APPEAL OF THE ASSESSEE. 6. BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDERS OF AUTHORITIES BELOW, SUBMITTED THAT DECISION OF HONB LE APEX COURT WAS CONSIDERED OUT OF CONTEXT BY THE LD. CIT(APPEALS). ACCORDING TO HIM, HONBLE APEX COURT HAD HELD THAT TIME SCHEDULE FOR PAYMENT OF TAX UNDER VDIS WAS NOT EXTENDABLE. BUT, NEVERTHELESS, PARA 11 OF THE I.T.A. NO. 1343/MDS/2011 5 JUDGMENT OF HONBLE APEX COURT, CLEARLY MENTIONED T HAT THE DECISION WAS TO BE APPLIED PROSPECTIVELY AND COULD NOT BE US ED TO REOPEN ANY PROCEEDINGS WHICH HAD BECOME FINAL IN FAVOUR OF THE ASSESSEE. ACCORDING TO HIM, INSOFAR AS THE ASSESSEES CASE WA S CONCERNED, THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN WR IT PETITION NO.181021/1999 HAD BECOME FINAL THERE BEING NO FURT HER APPEAL BY THE REVENUE. HENCE, AS PER THE LEARNED A.R., RELIA NCE PLACED BY THE LD. CIT(APPEALS) ON THE DECISION OF HONBLE APEX CO URT SUPRA WAS INCORRECT. 7. PER CONTRA, LEARNED D.R., SUPPORTING THE ORDERS OF AUTHORITIES BELOW, SUBMITTED THAT HONBLE APEX COURT HAD LAID D OWN THE LAW AND ONCE SUCH LAW WAS LAID DOWN, EVERY COURT AND TRIBUN AL WAS OBLIGED TO FOLLOW IT IN LETTER AND SPIRIT. ACCORDING TO HI M, JUST BECAUSE THIS PARTICULAR DECISION IN THE CASE OF THE ASSESSEE WAS NOT REVERSED WOULD NOT MEAN THAT A LAW DECLARED BY THE HONBLE A PEX COURT SHOULD NOT BE FOLLOWED. IT HAD TO BE FOLLOWED. TH EREFORE, ACCORDING TO HIM, LD. CIT(APPEALS) HAD TAKEN THE RIGHT DECISI ON BY FOLLOWING THE DECISION OF HONBLE APEX COURT AND CONFIRMING THE A DDITION MADE BY THE A.O. I.T.A. NO. 1343/MDS/2011 6 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. FACTS ARE CLEAR IN THAT ASSESSEE HAD PAID TAX AFTER THREE MONTHS FROM THE DATE OF DECLARATION UNDER VDIS AND THE DECLARAT ION WAS CONSEQUENTLY REJECTED. ASSESSEE MOVED A WRIT BEFOR E JURISDICTIONAL HIGH COURT. HONBLE JURISDICTIONAL HIGH COURT DIRE CTED ACCEPTANCE OF THE VDIS DECLARATION. HONBLE JURISDICTIONAL HIGH COURT RELIED ON ITS OWN DECISION IN THE CASE OF E. PRAHLATHA BABU (SUPR A) WHILE DIRECTING THE CIT TO ACCEPT THE VDIS DECLARATION. HONBLE AP EX COURT IN THE CASE OF HEMALATHA GARGYA (SUPRA) HAD OVERRULED THE DECISION OF JURISDICTIONAL HIGH COURT IN E. PRAHLATHA BABUS CA SE. NOW THE QUESTION BEFORE US IS WHETHER THE LD. CIT(APPEALS) TOOK A RIGHT DECISION BY FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF HEMALATHA GARGYA (SUPRA), WHEN THERE WAS A DECIS ION IN ASSESSEES FAVOUR IN THE PROCEEDINGS BEFORE JURISDI CTIONAL HIGH COURT IN W.P. NO.18021/1999. AS PER THE ASSESSEE, SUCH A DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN W.P. NO.18021/ 1999 DATED 13.11.2000 HAD BECOME FINAL THERE BEING NO FURTHER APPEAL OF THE REVENUE. LETS TAKE A LOOK AT PARA 11 OF THE JUDGM ENT OF HONBLE APEX COURT IN HEMALATHA GARGYAS CASE (SUPRA) RELIE D ON STRONGLY BY THE LEARNED A.R., WHICH IS REPRODUCED HEREUNDER:- I.T.A. NO. 1343/MDS/2011 7 11. IN NONE OF THE DECISIONS OF THE HIGH COURTS WHI CH HAVE HELD THAT THE TIME PRESCRIBED UNDER S. 67(1) WAS NO T RIGID HAS ANY LEGAL BASIS BEEN RELIED ON. THE DECISION TO EX TEND THE TIME APPEARS TO HAVE BEEN ARRIVED AT ON CONSIDERATIONS O F EQUITY. THIS APPROACH, IN OUR OPINION, WAS INCORRECT, AS TH E COURT HAD NO POWER TO ACT BEYOND THE TERMS OF THE STATUTORY SCHE ME UNDER WHICH BENEFITS HAD BEEN GRANTED TO THE ASSESSEE. B Y SO HOLDING WE MAKE IT CLEAR WE DO NOT INTEND TO REOPEN THOSE D ECISIONS WHICH HAVE BECOME FINAL IN FAVOUR OF THE ASSESSEES. IT MAY ALSO BE NOTED THAT IN ONE OF SUCH DECISIONS, THE REVENUE HAD SOUGHT TO PREFER AN APPEAL BEFORE THIS COURT BY WAY OF A S PECIAL LEAVE PETITION WHICH WAS DISMISSED IN LIMINE. IT NEEDS H ARDLY TO BE STATED THAT SUCH DISMISSAL WOULD NOT OPERATE AS CON FIRMATION OF THE REASONING IN THE DECISION SOUGHT TO BE APPEALED AGAINST, NOR DOES SUCH DISMISSAL BY ITSELF OPERATE AS AN ARGUMEN T IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 9. THERE IS A CLEAR OBSERVATION BY THE HONBLE APEX COURT THAT ITS JUDGMENT IS NOT INTENDED TO REOPEN THOSE DECISIONS WHICH HAD BECOME FINAL IN FAVOUR OF THE ASSESSEES. WE DO APP RECIATE ARGUMENT OF THE LEARNED D.R. THAT LAW LAID DOWN BY HONBLE A PEX COURT IS BINDING ON ALL COURTS AND TRIBUNALS. THERE CAN BE NO QUARREL ON THIS ASPECT. WE WILL ADD THAT EVEN MERE OBSERVATIONS OF THE HONBLE APEX COURT WILL BE BINDING ON ALL COURTS AND TRIBUNALS. IT IS NOT OPEN FOR AN INFERIOR COURT OR TRIBUNAL TO SAY THAT OBSERVATIONS OF APEX COURT WAS NOT HAVING FORCE OF LAW. NO DOUBT, WE CANNOT PICK OUT A SENTENCE OR WORD FROM A JUDGMENT AND TREAT IT AS LAW. BUT, WHE N AN OBSERVATION OR SENTENCE IS COMPLETE IN ALL RESPECTS, THAT IS TO SAY, ITS MEANING IS CLEAR AND UNAMBIGUOUS, IT IS THE DUTY OF THE LOWER AUTHORITIES TO FOLLOW I.T.A. NO. 1343/MDS/2011 8 IT IN LETTER AND SPIRIT. WHEN HONBLE APEX COURT S AY THAT A DECISION WHICH WAS GIVEN BY IT SHALL NOT DISTURB ANY DECISIO NS ALREADY TAKEN, WHICH HAD BECOME FINAL, WE ARE OF THE OPINION THAT THESE DIRECTIONS HAVE TO BE FOLLOWED IN LETTER AND SPIRIT. IN THE C ASE BEFORE US, THERE IS NO DISPUTE THAT ASSESSEES WRIT PETITION BEFORE HON BLE JURISDICTIONAL HIGH COURT STOOD DECIDED ON 13.11.2000 AND THERE WA S NO FURTHER APPEAL BY THE REVENUE THEREON. THEREFORE, REVENUE IS BOUND BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN WR IT PETITION NO.18021/1999. IN SUCH A SITUATION, AS DIRECTED BY HONBLE JURISDICTIONAL HIGH COURT, ASSESSEES VDIS DECLARAT ION HAD TO BE ACCEPTED. IT MIGHT BE TRUE THAT THE COMPETENT AUTH ORITY WAS STILL TO ISSUE A CERTIFICATE AS DIRECTED BY THE HONBLE JURI SDICTIONAL HIGH COURT. THIS WILL NOT MEAN THAT ASSESSEES DECLARATION OF V DIS STOOD NOT ACCEPTED, DESPITE DIRECTION FROM THE JURISDICTIONAL HIGH COURT. IN THIS VIEW OF THE MATTER, WE ARE OF THE OPINION THAT THE SUM OF ` 70 LAKHS SHOWN BY THE ASSESSEE IN HIS VDIS DECLARATION FOR W HICH TAX WAS PAID BELATEDLY, SHOULD NOT HAVE BEEN ONCE AGAIN CON SIDERED FOR ADDITION IN THE ASSESSMENT FOR THE SAME ASSESSMENT YEAR. SUCH ADDITION, THEREFORE, STANDS DELETED. ORDERS OF AUT HORITIES BELOW ARE SET ASIDE. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. I.T.A. NO. 1343/MDS/2011 9 THE ORDER WAS PRONOUNCED IN THE COURT ON 17 TH APRIL, 2012. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 17 TH APRIL, 2012. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-VI, CHENNAI/ CIT-IV, CHENNAI/D.R./GUARD FILE