ITO, Ward-16(2), Hyderabad V. M/s Liquors India Limited, Hyderabad

ITA 352/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69846 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Keywords: Revised return
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 352/HYD/2013 ASSESSMENT YEAR 2006-07 THE INCOME TAX OFFICER WARD-16(2) HYDERABAD VS. M/S. LIQUORS INDIA LTD. PLOT NO. 8-120, IDA NACHARAM, HYDERABAD PAN: AAACL3279R APPELLANT RESPONDENT APPELLANT BY: SRI M.H.NAIK RESPONDENT BY: SRI K.C. DEVDAS DATE OF HEARING: 09 .10.2013 DATE OF PRONOUNCEMENT: 09.10.2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED 11.12.2012 FOR THE A.Y. 2006-07. 2. THE REVENUE RAISED THE GROUND THAT THE CIT(A) HAS NO T APPRECIATED THE FACT THAT THE AO, AFTER THOROUGH VER IFICATION OF THE ISSUES, MADE THE ADDITIONS. 3. FACTS OF THE CARE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF INDIAN MA DE FOREIGN LIQUOR, BULK DRUGS AND OTHER LINES OF BUSINESS. FO R THE A.Y. 2006-07, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 30.11.2006 ADMITTING A TOTAL INCOME OF RS. 95,25,685. THEREAF TER, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 27.02.2008 ADMITT ING A LOSS OF RS. 2,87,70,415. ORIGINAL ASSESSMENT U/S. 143(3) OF TH E ACT WAS COMPLETED BY THE AO ON 30.12.2008 DETERMINING THE TO TAL INCOME OF THE ASSESSEE AT RS. 27,26,773 AND LONG TERM CAPITAL GAINS AT RS. ITA NO. 352/HYD/2013 M/S. LIQUORS INDIA LTD. ================== 2 1,44,360. THEREAFTER, THE CIT(A)-IV, HYDERABAD INVOK ED THE PROVISIONS OF SECTION 263 OF THE ACT AND PASSED A R EVISION ORDER UNDER THAT SECTION OF THE ACT. AGAINST THE ABOVE ORD ER U/S. 263, THE ASSESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL. AS P ER DIRECTIONS OF THE CIT-IV, HYDERABAD, THE ASSESSING OFFICER COMPLETE D THE REOPENED ASSESSMENT DETERMINING THE TOTAL INCOME OF THE ASSESSEE COMPANY AT RS. 4,87,51,481. ON APPEAL, THE CIT(A) O BSERVED THAT THE ORDER PASSED U/S. 263 OF THE ACT DATED 29.3.2011 WAS ANNULLED BY THE TRIBUNAL VIDE THEIR ORDER DATED 16.11.2012 I N ITA NO. 692/ HYD/2011 FOR A.Y. 2006-07 BY OBSERVING AS FOLLOWS: '7. NOW THE CIT, U/S. 263 OF THE ACT, CANNOT REOPEN A SETTLED ISSUE AND TAKE A DIFFERENT VIEW BY ALLEGING VARIOUS IRRELEVANT FACTS. THE CIT IS BOUND BY THE ORDER OF A HIGHER FORUM ON THIS ISSUE. MORE SO, TH E PAYMENT OF TRADE SCHEME EXPENDITURE TO THE SAME PARTY IS SUBJECT MATTER OF APPEAL BEFORE THIS TRIBU NAL. BEING SO, ON THE SAME ISSUE THE CIT IS NOT EXPECTED TO TAKE A DIFFERENT VIEW. IT IS NEEDLESS TO SAY TH AT AN ORDER DELIVERED BY THE TRIBUNAL IS BINDING ON THE ASSESSING OFFICER AS WELL AS THE CIT/CIT(A). HE IS BOUND TO FOLLOW THE ORDER OF THE TRIBUNAL IN ITS TR UE LETTER AND SPIRIT. THE ASSESSING OFFICER/CIT BEING AN INFERIOR OFFICER VIS-A-VIS THE TRIBUNAL, WAS BOUND BY THE JUDGEMENT OF THE TRIBUNAL AND, THEREFORE, HE SHOULD NOT HAVE TRIED TO DISTINGUISH THE SAME ON UNTENABLE GROUNDS. IT IS ALSO NECESSARY FOR JUDICI AL UNITY AND DISCIPLINE THAT ALL THE AUTHORITIES BELOW THE TRIBUNAL MUST ACCEPT A BINDING JUDGEMENT OF THE TRIBUNAL. A REFERENCE TO THIS MAY BE HAD TO THE JUDGEMENT OF BOMBAY HIGH COURT IN THE CASE OF BANK OF BARODA VS. H.C. SHRIVASTAVA (256 ITR 385) (BOM) AND ALSO TO THE JUDGEMENT OF MADHYA PRADESH HIGH COURT, INDORE BENCH, IN THE CASE OF AGGARWAL WAREHOUSING & LEASING LTD. VS. CIT (257 ITR 235). THUS, THE LEARNED CIT SHOULD NOT HAVE COMMITTED ANY JUDICIAL IMPROPRIETY IN REFUSING TO FOLLOW THE ORDER OF THE TRIBUNAL. EVEN IF HE HAD ANY REMOTE RESERVATION ABOUT CORRECTNESS OF THE DECISION OF TH E TRIBUNAL, HE SHOULD HAVE FOLLOWED THAT ORDER. HE COULD AND SHOULD HAVE LEFT IT TO THE DEPARTMENT TO TAKE THE MATTER IN FURTHER APPEAL TO THE HONBLE HI GH COURT FOR TAKING AN APPROPRIATE DECISION THEREON. BE ITA NO. 352/HYD/2013 M/S. LIQUORS INDIA LTD. ================== 3 THAT AS IT MAY BE, AND HAVING EXPRESSED OUR OPINION THAT THE DECISION BY THE TRIBUNAL WILL PREVAIL OVER THE DECISION TAKEN BY THE FIRST APPELLATE AUTHORITY ON THE PERSISTENT EFFORT MADE BY THE CIT TO DISALLOW THE CLAIM IS UNJUSTIFIED. FURTHER WHEN ONE DEFINITE ST AND WAS TAKEN BY THE TRIBUNAL CONSISTENTLY ON THE SAID ISSUE INVOLVING ALMOST IDENTICAL TERMS, IT CANNOT B E PERMITTED TO CHANGE THE POSITION IN THIS CASE IN TH E ABSENCE OF ANY MATERIAL DIFFERENCE IN THE FACTS. S INCE THE ISSUE INVOLVED IN THE INSTANT CASE IS SIMILAR T O EARLIER YEARS AS THE PAYMENT IS TO THE SAME PARTY, THE DECISION OF THE TRIBUNAL IS BINDING ON THE SUB- ORDINATE FORUM INCLUDING THIS BENCH. THE CLAIM OF THE ASSESSEE CANNOT BE DISTURBED FOR THIS ASSESSMENT YEAR UNDER CONSIDERATION. FURTHER, WE MAKE IT CLEA R THAT NEITHER THE CIT/CIT(A) NOR THE TRIBUNAL CANNOT SCRUTINISE THE EARLIER ORDER OF THE TRIBUNAL, SENTE NCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL THE FACT S HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGEMENT. IF THE AUTHORITY, ON A FAIR READING OF THE JUDGEMENT OF THE TRIBUNAL, FINDS THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKE N INTO ACCOUNT ANY IRRELEVANT MATERIAL IN BASING ITS CONCLUSION, THE DECISION OF THE TRIBUNAL IS NOT LIA BLE TO BE INTERFERED WITH, UNLESS, OF COURSE, THE CONCLUSI ONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE. IT IS NOT NECESSARY FOR THE TRIBUNAL IN ITS JUDGEMENT SPECIFICALLY OR ANY EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES OR HAS CONSIDERED THE TOTALITY OF THE FACTS OF THE CASE, AS IF IT IS A MAGIC FORMULA: IF THE JUDGEMENT OF THE TRIBUNAL SHOWS THAT IT HAS, IN FAC T, DONE SO, THERE IS NO REASON TO INTERFERE WITH THE DECISION OF THE TRIBUNAL. THE CIT IS NOT JUSTIFIED IN FINDING A HOLE IN THE ORDER OF THE TRIBUNAL SO AS T O DISALLOW THE CLAIM OF THE ASSESSEE TOWARDS TRADE SCHEME EXPENDITURE. IN OUR OPINION, THE COMMENTS OF THE CIT REGARDING THE INTERPRETATION TAKEN BY TH E TRIBUNAL ON EARLIER OCCASION DESERVES TO BE REPUDIATED AS A FACT OF GROSS JUDICIAL INDISCIPLINE . CERTAINLY, THE EARLIER VIEW OF THE TRIBUNAL IS TO B E FOLLOWED. CONTRARY VIEW BY THE CIT SUBSEQUENT TO THE ORDER OF THE TRIBUNAL CANNOT BE UPHELD. THE PRINCIPLES OF JUDICIAL DISCIPLINE REQUIRE THE CIT/C IT(A) TO FOLLOW THE ORDER OF THE TRIBUNAL ON THE ISSUE UNRESERVEDLY. THE APPROACH OF THE CIT IN THE PRESE NT ITA NO. 352/HYD/2013 M/S. LIQUORS INDIA LTD. ================== 4 CASE IS IN UTTER DISREGARD TO THE ACCEPTED NORMS OF JUDICIAL DISCIPLINE. THE IMPRESSION OF THE CIT THA T THE CLAIM OF THE ASSESSEE IS SPURIOUS DEDUCTION IS AGAINST THE FINDINGS OF THE TRIBUNAL IN THE EARLIER ASSESSMENT YEARS. THE REASONS GIVEN BY THE CIT TO DISREGARD THE BINDING NATURE OF THE TRIBUNAL ORDER WHICH WAS PRESSED INTO SERVICE BEFORE HIM BY THE ASSESSEE WOULD BE IN VIOLATION OF THE LAWS. UTMOST REGARD SHOULD BE PAID BY THE ADJUDICATING AUTHORITY AND APPELLATE AUTHORITIES TO THE REQUIREMENT OF MAINTAINING JUDICIAL DISCIPLINE AND THE NECESSITY F OR GIVING EFFECT TO THE ORDERS OF THE HIGHER APPELLATE AUTHORITIES WHICH ARE BINDING ON THEM. FOR THIS PURPOSE, WE PLACE RELIANCE ON THE JUDGEMENT OF SUPREME COURT IN THE CASE OF UNION OF INDIA VS. KAMALAKSHI FINANCE CORPORATION LTD. (1991) (55) ELT 433 SC. ACCORDINGLY, IN THE LIGHT OF THE ABOVE, WE ANNUL THE ORDER PASSED BY THE CIT U/S. 263 OF THE ACT AND DECIDE THE ISSUE IN DISPUTE IN FAVOUR OF TH E ASSESSEE UPHOLDING THE ARGUMENTS OF THE ASSESSEE.' AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. AS THE ORDER PASSED U/S. 263 OF THE ACT DATE D 29.3.2011 WAS QUASHED BY THE TRIBUNAL BY ORDER DATED 16.11.2012 I N ITA NO. 692/ HYD/2011 FOR A.Y. 2006-07, THERE IS NO SURVIVING ORD ER SO AS TO PASS CONSEQUENTIAL ORDER IN TERMS OF SECTION 143(3) R.W. S. 263 OF THE ACT. HENCE, THE CIT(A) IS JUSTIFIED IN ANNULLING THE ASSE SSMENT ORDER DATED 30.6.2011 PASSED U/S. 143(3) R.W.S. 263 OF TH E ACT. THE GROUND TAKEN BY THE REVENUE IS REJECTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH OCTOBER, 2013. SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 9 TH OCTOBER, 2013 TPRAO ITA NO. 352/HYD/2013 M/S. LIQUORS INDIA LTD. ================== 5 COPY FORWARDED TO: 1. THE INCOME TAX OFFICER, WARD - 16(2), ROOM NO. 615, 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD-500 004. 2. M/S. LIQUORS INDIA LTD., PLOT NO. 8 - 120, IDA NACHARAM, HYDERABAD. 3. THE CIT(A) - V, HYDERABAD. 4. THE CIT - IV, HYDERABAD 5. THE DR 'B' BENCH, ITAT, HYDERABAD