Asst. Commissioner of Income-Tax, (Central Circle-2), Hyderabad V. M/s Janapriya Engineers Syndicate, Hyderabad

ITA 1622/HYD/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8997 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 29-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.1 614 /HYD/201 2 : ASSESSMENT YEAR 2005 - 06 ITA NO.1 622 /HYD/201 2 : ASSESSMENT YEAR 2006 - 07 ITA NO.1 623 /HYD/201 2 : ASSESSMENT YEAR 2007 - 08 ITA NO.1 624 /HYD/201 2 : ASSESSMENT YEAR 2008 - 09 ASSTT. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 2, HYDERABAD V/S. M/S. JANAPRIYA PROPERTIES PVT. LTD. (PREVIOUSLY KNOWN AS M/S. JANAPRIYA ENGINEERS SYNDICATE) HYDERABAD ( PAN - AABFJ 7649 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJAT MITRA RESPONDENT BY : SHRI A.SRINIVAS DATE OF HEARING 19 . 01 .201 5 DATE OF PRONOUNCEMENT 19.01.2015 O R D E R PER BENCH : VIDE COMMON ORDER DATED 29.11.2013, THE INCOME TAX APPELLATE TRIBUNAL B BENCH, HYDERABAD, CON S ID E RED THE ISSUE OF ADDITION S MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE UN D ER S.40(A)(IA) OF THE INCOME TAX ACT,1961 AND OBSERVED AS UN D ER - 57. WE HEARD BOTH SIDES AND PERUSED THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THE DECISION OF THE CIT(A) WHILE DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER S.40(A)(IA) OF THE ACT, IS BAS ED ON THE SPECIAL BENCH DECISION OF THE VISAKHAPATNAM TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORT IN ITA NO.477/VIZ/2008 DATED 29.3.2012. WE FIND THAT THE SAID DECISION OF THE SPECIAL BENCH HAS BEEN STAYED BY THE HONBLE HIGH COURT OF ANDHRA PRADESH VIDE ITS INTERIM ORDER DATED 8 TH OCTOBER, 2012. THAT BEING SO, IN THE INTERESTS OF JUSTICE, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) ON THIS ISSUE AND RESTORED THIS ASPECT OF THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO REDECIDE THE DISALLOWANCE IF ANY THAT MAYBE WARRANTED IN TERMS OF S .40A(IA) OF THE ACT, IN CONSONANCE WITH THE VIEW THAT THE ITA NO. 1 614 /HYD/201 2 & 3 ORS M/S. JANAPRIYA PROPERTIES PVT. LTD. HYDERABAD . 2 HONBLE HIGH COURT MAY TAKE ON THE ABOVE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL. THE ASSESSING OFFICER IS DIRECTED TO REDECIDE THIS ISSUE IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE 2. AGGRIEVED BY THE ORDER OF TH E TRIBUNAL , THE R E VENUE PREFERRED APPEALS B E FORE THE HON'BLE HIGH COU R T OF JUDICATURE AT HYDERABAD FOR THE STA TE OF T E LANGANA AND THE ST ATE OF A NDH R A PRADESH, WHEREIN IT WAS CONTENDED THAT THE ORDER OF THE TRIBUNAL CANNOT B E GIVEN EFFECT TECHNICALLY, SIN C E A CONSEQUENTIAL ORDER HAS TO B E PASSED BY THE ASSESSING OFFICER WITHI N ONE YE A R FROM THE FINANCIAL Y E AR IN WHICH THE ORDER OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL IS RECEIVED, WHEREAS IN THE IN S TAN T CA S E, THE DIRECTION W AS TO PASS ORDERS IN CON S ON A N C E WITH THE V I EW, THAT IS YET TO BE TAKEN, BY THE HON'BLE HIGH COU R T IN THE CA S E OF MERILYN SHIPPING AND TRANSPORTS (SUPRA) . 3. IT I S WELL KNOWN THAT SP E CIAL B E N CH WAS CON S TITU T ED SO AS TO HAVE UNIFORMITY OF OPI N ION ACROSS THE COUN T RY ON A PARTICULAR LEGAL ISSUE AND TH EREFORE, THE O R DER OF THE SP E CIAL B EN C H WOULD BE BIND ING ON THE OTHER BE NCHES UNTIL AND UNLESS A JURI S DI C T I ONAL HIGH COU R T DECISION OR A SUPREME C OU R T DECISION IS RENDERED CONTRARY TO THE VIEW TAKEN BY TH E SP E CIAL BENCH. IN TH E INSTANT CASE, THE HON'BLE HIGH C OU R T, IN TH E CA S E OF M ERYLIN SHIPPING AND TR ANSPO R T, STAYED THE OPERATION OF THE ORDER PASSED BY THE SP E CIAL BENCH, AND KEEPING IN VIEW TH IS PECULIAR CI RC UMSTANCE, TH E T RIBUNAL HAD TO PASS AN ORDER BY MERELY SET TING ASIDE THE ISSUE TO THE FILE O F THE ASSESSING OFFICER TO CON S I D ER THE I S SU E A FRE SH IN LINE WITH THE PROBABLE VIEW THAT MAY B E TAKEN BY THE HON'BLE HIGH COURT IN THE CA S E OF MERYLIN SHIP P ING AND TRANS POR T. 4. HAVING REGARD TO THE PECULIAR CI R CUM S TANCES O F THE C A SE, T HE HIGH COURT HAVING NOTICED THE CA C HCE - 22 SITUATION IN WHICH IT WAS PL A CED IN, CL A RIFIED THE CONCEPT OF PRECED E NT AND IN THIS REGARD OBSERVED AS UN D E R - ITA NO. 1 614 /HYD/201 2 & 3 ORS M/S. JANAPRIYA PROPERTIES PVT. LTD. HYDERABAD . 3 W E ARE OF THE VIEW THAT UNTIL AND UNLESS THE DECISION OF T H E S PECIAL B ENCH I S UPSET BY THIS C OU R T, IT BINDS SMALLER BENCH AND COORDINATE B ENCH OF THE TRIBUNAL. UND ER THE CIRCUM S TANC E S, IT IS NO T OPEN TO THE TRIBUNAL , AS RIGHTLY CONTEND E D BY MR. NARASIMHA SARMA, LEARNED COUNSEL, TO REMAND ON TH E GROUND OF P E NDENCY ON THE SAME ISSUE BEFORE THIS COURT, OVERLOOKING A ND OVERRULING, BY N EC E SSARY IM P LICATION, THE DECISION OF THE SPECIAL BENCH. WE SIMPLY SAY THAT IT IS NO T P E RMI S SIBL E UN D ER QUASI JU D I C I A L DISCIPLINE. UN D ER THE CIRCUMSTANCES, WE SET ASIDE THE IMPUGN E D JUDGMENT AND ORDER, AND R E STORE THE MATTER TO THE FIL E O F TH E TRIBUNAL , WHI C H WILL DE C IDE THE ISSUE IN ACCO R D ANCE WI T H LAW AND IT WOULD B E OPEN TO TH E TRIBUNAL EITHER TO FOLLOW TH E SP E CIAL B ENCH DECISION OR NOT TO FOLLOW. IF TH E SP E CIAL B ENCH DECISION IS NO T FOLLOWED, OBVIOUSLY REMEDY LIES ELSEWHERE. THE APPEAL I S THUS ALLOWED ONLY ON THE POI N T OF REMAND. W E DIRECT THE TRIBUNAL TO DECIDE THE MATTER ON REMAND AFRESH WITHIN A P E RIO D O F TWO MON T H S FROM THE DATE OF COMMUNICATION OF THIS ORDER. THU S, TH E MATTER WAS REMANDED TO THE TRIBUNAL FOR FRESH ADJU D I C ATION ON THE ISSUE. 5. HAVING REGARD TO THE DIR E CTION G IVEN BY THE HON'BLE HIGH COURT, THE M AT TER WAS P O STED FOR HEARING. THE LEARNED COUN SE L APP E ARING ON BEHALF O F THE ASSESSEE PL A CED BEFORE US THE FOLLO W IN G ORD E RS OF THE ITAT TO SUBMIT THAT THE HON'BLE ALLAHABAD H IGH C OU R T IN ITS DECISION IN TH E CA S E OF CIT V/S. VECTOR SH I PPING SERVI C ES PVT. LTD. (357 ITR 647) HAS TAKEN A VI E W ON THE ISSUE IN FAVOUR O F TH E ASSESSEE IN CONSONAN C E WITH TH E VI E W TAKEN BY THE ITAT VISAKHAPATNAM SP E CIAL BENCH IN TH E C AS E OF MERYLIN SH I PPING AND TR A NSPO R T (SUPRA) , AND THE VIEW TAKEN BY TH E HON'BLE ALL A HABAD HIGH COURT WAS IMPLIEDLY AF F IRMED BY THE HON'BLE SUPREME COURT BY DISMISSING AN SLP SOUGHT BY THE R EVENUE, AND THUS THE VIEW TAKEN BY THE I TAT SP E CIAL B ENCH VISAKHAPATNA M DE S ERVES TO B E FOLLOWED. ( A ) DECISION OF HYDERABA D BENCH A OF THE TRIBUNAL IN USHODAYA ENTERPRISES LTD. HYDERABAD V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE ITA NO. 1 614 /HYD/201 2 & 3 ORS M/S. JANAPRIYA PROPERTIES PVT. LTD. HYDERABAD . 4 16(2), HYDERABAD (ITA NOS.676/HYD/2009 & 411/HYD/2010 DATED 7.1.2015) ( B ) DECISION OF MUMBAI BENCH A OF THE TRIBUNAL IN M/S. ARCADIA SHARE & STOCK BROKERS PVT. LTD., MUMBAI V/S. DY. COMMISSIONER OF INCOME - TAX, RANGE 4(1), MUMBAI (ITA NO.1871/MUM/2013 DATED 22.12.2014) 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE F A IRLY AGREED T H A T THE ITAT HYDERABAD BENCH CONSIDERED AN IDENTICAL ISSUE AND FOLLOWED THE DECI S I O N OF THE SP E CIAL BENCH IN TH E C A S E OF MERYLIN SH I PPING AN D TR AN S PO R T (SUPRA) . 7. UPON HEARING THE RIVAL SUBM I SSION S , WE ARE O F THE VIEW THAT THE DECISION OF THE ITAT SP E CIAL BENCH IS BIN D IN G ON THE TRIBUNAL, PARTICULARLY IN VIEW OF THE CLARIFICATORY ORDER PASS E D BY THE HON'BLE HIGH COURT OF JUDICATURE AT HYDERABAD IN THE IN ST AN T CASE, AND THUS, WE RESPECTFULLY FOLLOW THE DECISION OF SP E CIAL BENCH IN THE CASE OF MERYLIN S H I PPING AND T RAN S PO R TS (SUPRA), AND HOL D THAT THE PROVIS IONS OF S.4 0(A)(IA) C A NNOT BE INVOKED WH E RE THE P AYM E N T S WERE ALREADY MADE BY THE ASSESSEE. WE DIRECT THE ASSESSING OFFICER ACCOR D IN G LY. I N THE RESULT, APP E ALS O F TH E REVENUE INSOFAR AS THE ABO V E ISSUE IS CON C ERNED, ARE HEREBY DISMI S SED. ORDER PRONOUNCED IN THE COURT ON 19 TH JANUARY, 2015 SD/ - SD/ - (D.MANMOHAN) (B.RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER DT/ - 19 TH JANUARY, 2015 ITA NO. 1 614 /HYD/201 2 & 3 ORS M/S. JANAPRIYA PROPERTIES PVT. LTD. HYDERABAD . 5 COPY FORWARDED TO: 1 . M/S. JANAPRIYA PROPERTIES PVT. LTD. (PREVIOUSLY KNOWN AS M/S. JANAPRIYA ENGINEERS SYNDICATE) 8 - 2 - 120/86, PLOT NO.11 & 12, KEERTHI AND PRIDE TOWERS, ROAD NO.2, BANJARA HILLS, HYDERABAD 34. 2. ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 2, HYDERABAD 3. 4 COMMISSIONER OF INCOME - TAX(APPEALS) I, HYDERABAD COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S