ACIT, Tirur V. M/s.Tirur Urban Co-operative Bank Ltd, Tirur

ITA 3/COCH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2632 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2013
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2013
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: MOHAN PULICKKAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.03/COCH/2013 ASSESSMENT YEAR : 2009-10 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(2), TIRUR VS. M/S. TIRUR URBAN CO-OPERATIVE BANK LTD., P.B. NO. 44, CIVIL STATION ROAD, TIRUR, MALAPPURAM 676 101. [PAN: AACFT 5798A] (REVENUE-APPELLANT) (ASSESSEE-R ESPONDENT) REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR ASSESSEE BY SHRI MOHAN PULICKKAL, ADV.. DATE OF HEARING 15/07/2013 DATE OF PRONOUNCEMENT 18/07/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 09-10-2012 PASSED BY THE LD. CIT(A)-II, KOZHIKODE AND IT RELAT ES TO THE ASSESSMENT YEAR 2009-10. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS ENGAGED IN THE BANKING BUSINESS. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS.11,06,551/- AS EXPENDITURE TOWARDS PAYMENT OF SECURITY CHARGES. IT WAS NOTICE D THAT THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE ON THIS PAYMENT AND HENCE, THE ASSESS ING OFFICER DISALLOWED THE SAME BY INVOKING THE PROVISIONS OF SEC. 40A(IA) OF THE ACT. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DELETED THE SAME BY FOLLOWING THE DECISION R ENDERED BY THIS BENCH IN THE CASE OF M/S. CEE PEE GRANITES PVT. LTD. IN I.T.A. NOS. 400 & 401/COCH/2011 DATED 14 TH I.T.A. NO. 03/COCH/2013 2 SEPTEMBER, 2012. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS FILED THIS APPEAL BEFORE US. 3. THE LD. DR SUBMITTED THAT THIS BENCH HAS RENDERE D THE DECISION IN FAVOUR OF THE ASSESSEE IN THE CASE OF M/S. CEE PEE GRANITES PVT. LTD.(REFERRED SUPRA), BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (136 ITD 23). THE LD. DR FURTHER SUBMITTED THAT TH E RATIO LAID DOWN BY THE SPECIAL BENCH HAS BEEN DECLARED AS AN INCORRECT VIEW BY HON BLE HIGH COURTS OF CALCUTTA AND GUJARAT. ACCORDINGLY, THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL. SHE FURTHER SUBMITTED THAT THE ADDITION MADE BY THE AO U/S 40(A)(IA) IS SUSTAINABLE, AS THERE IS FA ILURE ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE ON THE PAYMENT MADE TOWARDS SE CURITY CHARGES. 4. ON THE CONTRARY, THE LD. AR SUBMITTED THAT THE D ECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS, REFERRED SUPRA IS BINDING ON THIS TRIBUNAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. AS SUBMITTED BY THE LD. DR, THE LD. CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF M/S. CEE PEE GRANITES PVT. LTD.(REFERRED SUPRA), WHICH IN TURN WAS RENDER ED BY FOLLOWING THE DECISION OF THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRA NSPORTS (REFERRED SUPRA). WE NOTICE THAT THE HONBLE HIGH COURT OF CALCUTTA, VID E ITS ORDER DATED 28-03-2013 IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE IN ITAT NO . 20/2013, HAS HELD THAT THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS IS NOT ACCEPTABLE. WE ALSO NOTICE THAT THE HONBLE HI GH COURT OF GUJARAT VIDE ITS ORDER DATED 02-05-2013 IN THE CASE OF CIT VS. SIKANDARKHA N N. TUNVAR (TAX APPEAL NO. 905/2012 & ORS.) HAS HELD THAT THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS DOES NOT LAY DOWN THE CORRECT LAW. ACCO RDINGLY, BOTH THE HIGH COURTS DID NOT APPROVE THE DECISION RENDERED BY THE SPECIAL BE NCH IN THE ABOVE SAID CASE. I.T.A. NO. 03/COCH/2013 3 6. IN THE CASE OF KANEL OIL & EXPORT INDS. LTD ( 121 ITD 596) (AHD)(TM), THE HONBLE THIRD MEMBER CONSIDERED THE ISSUE, VIZ., WHICH OF T HE DECISION IS REQUIRED TO BE FOLLOWED WHEN THE DECISIONS RENDERED BY THE SPECIAL BENCH OF THE TRIBUNAL AND BY ANY OF HIGH COURT CONTRADICTS WITH EACH OTHER. IN THI S REGARD, THE HONBLE THIRD MEMBER OBSERVED AS UNDER:- ONE IS OF A SPECIAL BENCH OF THE TRIBUNAL, AHMEDAB AD AND THE OTHER IS OF A HIGH COURT, THOUGH NOT THE JURISDICTIONAL HIGH COURT. A SIMPLE ANSWER WOULD BE THAT THE JUDGMENT OF A HIGH COURT, THOUGH NOT OF THE JUR ISDICTIONAL HIGH COURT, PREVAILS OVER AN ORDER OF THE SPECIAL BENCH EVEN TH OUGH IT IS FROM THE JURISDICTIONAL BENCH (OF THE TRIBUNAL) ON THE BASIS OF THE VIEW THAT THE HIGH COURT IS ABOVE THE TRIBUNAL IN THE JUDICIAL HIERARCHY. B UT THIS SIMPLE VIEW IS SUBJECT TO SOME EXCEPTIONS. IT CAN WORK EFFICIENTLY WHEN THER E IS ONLY ONE JUDGMENT OF A HIGH COURT ON THE ISSUE AND NO CONTRARY VIEW HAS BE EN EXPRESSED BY ANY OTHER HIGH COURT. BUT WHEN THERE ARE SEVERAL DECISIONS O F NON-JURISDICTIONAL HIGH COURTS EXPRESSING CONTRARY VIEWS, IT HAS BEEN RECOG NISED THAT THE TRIBUNAL IS FREE TO CHOOSE TO ADOPT THAT VIEW WHICH APPEALS TO IT.. WE HAVE ALREADY NOTICED THAT THE HONBLE HIGH COURT OF CALCUTTA AND THE HONBLE HIGH COURT OF GUJARAT HAVE NOT APPROVED THE DECISION REN DERED BY THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS AND NO OTHE R CONTRARY DECISION RENDERED BY ANY OF THE HIGH COURT WAS BROUGHT TO OUR NOTICE. H ENCE, WE ARE INCLINED TO FOLLOW THE DECISIONS RENDERED BY THE HONBLE HIGH COURTS OF CA LCUTTA AND GUJARAT. ACCORDINGLY, WE REVERSE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE A ND RESTORE THE ADDITION MADE BY THE ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED. PRONOUNCED ACCORDINGLY ON 18-07-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 18TH JULY, 2013 GJ I.T.A. NO. 03/COCH/2013 4 COPY TO: 1. M/S. TIRUR URBAN CO-OPERATIVE BANK LTD., P.B. NO . 44, CIVIL STATION ROAD, TIRUR, MALAPPURAM 676 101. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2(2), TIRUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOZH IKODE. 5. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 6. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 7. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN