KARUR GOVINDARAJ RAAJESH KRISHNA,KARUR V. INCOME-TAX OFFICER, WARD-1, KARUR, KARUR

MA 3/CHNY/2025

AI Insights

The case involves Miscellaneous Applications filed by the assessee, Karur Govindaraj Raajesh Krishna, against the Tribunal's order dated 31.12.2024 concerning the assessment year 2012-13. The primary contention was the alleged violation of natural justice during the hearing on 08.10.2024, where the assessee's legal issues were not effectively heard. The Tribunal had initially relied on a precedent from M/s.IDFC First Bank Ltd., which was later found to deviate from the expected legal interpretation as per the latest decision of the Hon
ble Madras High Court in the case of M/s.Pentafour Software Employees Welfare Foundation. The Tribunal acknowledged the oversight and the need for a re-hearing to address all legal facets appropriately.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792247 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 03-01-2025
• Other Referred Cases: G.K.N Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19, M/s.IDFC First Bank Ltd., ITA Nos.1170 & 1171/Chny/2024, Home Finders Housing Ltd. [2018] 404 ITR 611 (Mad.), M/s.Pentafour Software Employees Welfare Foundation [2019] 418 ITR 427 (Mad.), Andaman Timber Industries v. Commissioner of Central Excise [281 CTR 241 (SC)], Bhika Ram & Ors. v. UoI [1999] 238 ITR 113 (Delhi-HC)
• Laws Referred To: Income-tax Act, 1961, Land Acquisition Act, 1894
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE; R. ANITHA
• Assessee Lawyers: S. SRIDHAR
• Keywords: Principle of natural justice
• Section: 28

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0001ी एबी टी. वक , ाियक सद\u0011 एवं एवं एवं एवं \u0001ी जगदीश, लेखा सद क े सम\u0015 BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER Miscellaneous Application Nos.2 & 3/Chny/2025 (in ITA No.1403/Chny/2024 & CO No.19/Chny/2024) िनधा\u000eरणवष\u000e/Assessment Year: 2012-13 Karur Govindaraj Raajesh Krishna, 10, AVS & AVR Colony, Chinnandankoil Road, Karur-639 002. [PAN: AHZPR 3034 M] v. The ITO, Ward-1, Karur. (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr. S. Sridhar, Advocate \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Ms. R. Anitha, Addl.CIT सुनवाईक\u001aतारीख/Date of Hearing : 22.08.2025 घोषणाक\u001aतारीख /Date of Pronouncement : 01.12.2025 आदेश / O R D E R PER JAGADISH, AM: These are Miscellaneous Applications preferred by the assessee against the Tribunal order dated 31.12.2024 in ITA No.1403/Chny/2024 & CO No.19/Chny/2024 for AY 2012-13. 2. At the outset, the Ld.AR Mr. S. Sridhar, Advocate for Assessee reminded us that when the Income Tax Appeal/CO [ITA no 1403/Chny/2024 & CO no 19/Chny/2024] was listed for hearing on 08.10.2024, and when it was called for hearing, the Ld.AR had assailed the action of AO reopening the assessment by raising a legal issue viz., Printed from counselvise.com MA Nos.2 & 3/Chny/2024 (AY 2012-13) Karur Govindaraj Raajesh Krishna :: 2 :: non-adherence to the procedure laid down in the judgment passed by the Hon’ble Supreme Court in the case of G.K.N Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19, then the Senior Member (who was Presiding the Bench) remarked that similar/identical legal issue had been dealt by him while sitting in another combination in another case i.e. M/s.IDFC First Bank Ltd., in ITA Nos.1170 & 1171/Chny/2024, which is ready for pronouncement; and then took the assessee’s Appeal as heard. Hence, according to the Ld.AR, there was no effective hearing at all on this legal issue as well as on other legal issues/merit of the case. In other words, according to the Ld.AR, due to the aforesaid events unfolding at the time of hearing in the Captioned Appeal, they assumed that the Bench was proceeding to pass orders (on the legal issue) on the same lines of M/s.IDFC First Bank Ltd. (supra). However, when the assessee received the impugned order on 31.12.2024, [which is the subject-matter of present MA] to his utter surprise found that the Tribunal deviated from the order passed in M/s.IDFC First Bank Ltd. (supra) [which was passed on 09.10.2024 in favour of assessee)]. Therefore, according to the Ld.AR, since no effective hearing took place on the date of hearing on 08.10.2024 there was gross violation of natural justice. Hence, these Miscellaneous Applications were filed inter-alia on the ground of failure of natural justice at the time of hearing on 08.10.2024. Hence, the Ld.AR prayed for recalling the impugned order, so that assessee could be Printed from counselvise.com MA Nos.2 & 3/Chny/2024 (AY 2012-13) Karur Govindaraj Raajesh Krishna :: 3 :: granted effective hearing to argue all facets of the issues raised including the applicability of the latest/subsequent decision of the Hon’ble Madras High Court in the case of M/s.Pentafour Software Employees Welfare Foundation reported in [2019] 418 ITR 427 (Mad.) which according to him is binding on the Tribunal. Therefore, the Ld.AR pleads for recalling the impugned order by citing the decision in the case of Andaman Timber Industries v. Commissioner of Central Excise reported in 281 CTR 241 (SC). 3. Per contra, the Ld.DR, submitted that there was no mistake apparent on the face of the record and pleaded for dismissal of the Miscellaneous Applications filed. 4. We have heard both the parties and perused the records. The main contention of the Ld.AR for recalling the impugned order is on the ground that no effective hearing could take place on 08.10.2024, on the legal issue of non-adherence to the procedure laid down in the case of G.K.N Driveshafts (India) Ltd. (supra) and the later decision of the Hon’ble Madras High Court in the case of M/s.Pentafour Software Employees Welfare Foundation (supra)]. In other words, the main thrust of the assessee’s Miscellaneous Application is that the impugned order of the Tribunal is fragile for violation of natural justice. In this regard, the Ld.AR rightly brought to our notice that when the hearing took place on Printed from counselvise.com MA Nos.2 & 3/Chny/2024 (AY 2012-13) Karur Govindaraj Raajesh Krishna :: 4 :: 08.10.2024, the Senior Member (Shri Aby T. Varkey, JM) had observed that on similar legal issue, [while sitting in another combination] he had heard a case viz M/s.IDFC First Bank Ltd. (supra) and is going to pass order in that case next day i.e on 09.10.2024; and then, the Bench wound up the hearing [on the legal issue] and reserved the order for judgment. And even though, the judgment in the case of IDFC First Bank Ltd. (supra) was pronounced one day later on 09.10.2024 [similar legal issue was answered in favour of assessee], however, the impugned order was passed by the Tribunal restoring the assessment back to the file of the AO [by relying on the earlier order of the Hon’ble Madras High Court in the case of Home Finders Housing Ltd. reported in [2018] 404 ITR 611 (Mad.) dated 25.04.2015]. Now before us, the assessee has filed the ibid MAs for recalling the impugned order on the plea of violation of natural justice [no effective hearing took place on the legal issue especially in the light of the latest decision of the Hon’ble Madras High Court in the case of M/s.Pentafour Software Employees Welfare Foundation (supra)] and contended that when there is a later view of the High Court of equal strength on the issue-in-hand, then the later view have to be followed as a precedent and for such a proposition relied on the decision of the Hon’ble Delhi High Court in the case of Bhika Ram & Ors. v. UoI reported in [1999] 238 ITR 113 (Delhi-HC) wherein it was held that the later view of the [Hon’ble Supreme Court] Bench of equal strength will prevail over Printed from counselvise.com MA Nos.2 & 3/Chny/2024 (AY 2012-13) Karur Govindaraj Raajesh Krishna :: 5 :: the earlier view and took us to the decision of the Hon’ble High Court wherein it was held as under: The petitioners seek a direction to the Land Acquisition Collector to refund the amount of tax deducted from the amount of interest awarded to them under Sections 28 and 34 of the Land Acquisition Act, 1894. The tax was deducted at source consistently with the obligation of the Land Acquisition Collector created by Section 194A of the Income-tax Act, 1961. According to the petitioners, the amount of interest being not liable to tax, the Land Acquisition Collector was not justified in deducting the tax at source. The issue is no more res Integra in view of same pronouncement of the Supreme Court in Bikram Singh v. Land Acquisition Collector [1997] 224 ITR 551, wherein their Lordships have held that such an amount of interest on delayed payment of compensation determined under the Land Acquisition Act was a revenue receipt exigible to income-tax under Section 4 of the Act. However, the claimant would be entitled to spread over the income for the period for which payment came to be made, so as to compute the income for assessing tax for the relevant accounting year. In view of the law so laid down the petitioner is not entitled to the relief prayed for. However, learned counsel for the petitioner relied on Satinder Singh v. Umrao Singh, , to submit that compensation would not be treated as income. Learned counsel further submitted that the decision of the Supreme Court in Satinder Singh's case was not brought to the notice of the Supreme Court when Bikram Singh's case [1997] 224 ITR 551, was decided. It is also submitted that the reasoning on which their Lordships have proceeded in the case of Satinder Singh, , was also not argued before the Supreme Court in Bikram Singh's case [1997] 224 ITR 551. Not only are we not satisfied about the correctness of the submission so made, we are also of the opinion that such a plea is not open for consideration by us and Bikram Singh's case [1997] 224 ITR 551 (SC), being a later pronouncement of the Supreme Court by a Bench of co-equal strength, it is binding on us. The senior standing counsel for the Revenue has pointed out that the definition of interest has undergone a change after the pronouncement of the Supreme Court in the case of Satinder Singh, . He also submitted that in Satinder Singh's case , the interest paid was by way of compensation while in the case at hand interest has been allowed as interest on the amount of compensation in accordance with the statutory provisions. The petitioner is at liberty to have the income on account of interest assessed by seeking spread over consistently with the law laid down by the Supreme Court in the case of Bikram Singh [1997] 224 ITR 551. So far as the present petition is concerned, we hold the petitioner not entitled to any relief. The petition is dismissed. No order as to costs. [Emphasis given] 5. In the light of the foregoing discussion, we find merit in the MA/submission of the assessee that per-se there was violation of natural justice, since at the time of hearing of the instant appeal of the assessee Printed from counselvise.com MA Nos.2 & 3/Chny/2024 (AY 2012-13) Karur Govindaraj Raajesh Krishna :: 6 :: (i.e. on 08.10.2024), the Bench on the assumption that it will follow its own order in M/s.IDFC First Bank Ltd. (which was passed on 09.10.2024), had reserved the order without giving assessee effective hearing on the legal issue, which omission renders the impugned order fragile for not hearing the assessee especially since there was two views expressed by the Hon’ble jurisdictional High Court (i) in M/s. Home Finders Housing Ltd. (supra) & (ii) M/s.Pentafour Software Employees Welfare Foundation (supra). And since we have deviated from the view expressed in the case of M/s.IDFC First Bank Ltd. passed on the very next day of hearing i.e. on 09.10.2024, ideally we should have put the assessee on notice before deviating. Hence, there is violation of natural justice, which has affected the assessee prejudicially, which action of the Tribunal need to be set right at the stage of violation of natural justice, so that the appeal can be heard after duly complying with the rules of natural justice. Hence, we are inclined to recall the impugned order of this Tribunal and restore the appeal/CO and direct the Registry to fix the appeal of the department and Cross-Objection of the assessee in due course. 6. In the result, Miscellaneous Applications filed by the assessee are allowed. Order pronounced on the 01st day of December, 2025, in Chennai. Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0001याियक सद\bय/JUDICIAL MEMBER Sd/- (जगदीश) (JAGADISH) लेखा सद /ACCOUNTANT MEMBER Printed from counselvise.com MA Nos.2 & 3/Chny/2024 (AY 2012-13) Karur Govindaraj Raajesh Krishna :: 7 :: चे ई/Chennai, !दनांक/Dated: 01st December, 2025. TLN आदेश क\u001a \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ\u0010/Appellant 2. \u0011\u0012थ\u0010/Respondent 3. आयकरआयु\u0018/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u0011ितिनिध/DR 5. गाड फाईल/GF Printed from counselvise.com "