Indian Overseas Bank, CHENNAI V. ACIT, CHENNAI

MA 135/CHNY/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3166 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 24-07-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 23-07-2014
• Court: TRIBUNAL
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] M.P.NOS. 133 TO 136/MDS/2014 [IN I.T.A.NOS.117 & 118/MDS/2007, 577 & 578/MDS/200 5 ASSESSMENT YEARS : 2000-01, 2003-04, 1997-98 & 1998-99 M/S INDIAN OVERSEAS BANK 762, ANNA SALAI CHENNAI VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE II(3) CHENNAI [PAN AAACI 1223 J ] ( PETITIONER ) (RESPONDENT) PETITIONER BY : SHRI C. NARESH, C.A. RESPONDENT BY : SHRI SHAJI P. JACOB, ADDL. CIT / DATE OF HEARING : 24 - 0 7 - 2015 / DATE OF PRONOUNCEMENT : 31 - 0 7 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THE ASSESSEE FILED THE PRESENT MISCELLANEOUS PETI TIONS TO RECALL THE ORDER OF THIS TRIBUNAL DATED 18.4.2013. 2. SHRI C. NARESH, LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS TRIBUNAL BY ORDERS DATED 21.1.2008 AND 20 .8.2007 DISMISSED THE APPEALS FILED BY THE REVENUE ON THE GROUND THAT COD APPROVAL M.P. NOS.133 TO 136/14 :- 2 -: WAS NOT OBTAINED FOR PROSECUTING THE APPEALS BEFORE THIS TRIBUNAL. ACCORDING TO THE LD. REPRESENTATIVE, THE APEX COURT IN THE CASE OF ELECTRONICS CORPORATION OF INDIA LTD HELD THAT FOR PROSECUTING THE APPEAL BY THE DEPARTMENT AGAINST THE PUBLIC SECTOR UNDERTAKING, A CLEARANCE FROM THE COD IS A MANDATORY CONDITION. A CCORDINGLY, ALL THE APPEALS FILED BY THE REVENUE WERE DISMISSED. HOWEV ER, SUDDENLY, AFTER EXPIRY OF FOUR YEARS, AN ORDER WAS PASSED BY THIS TRIBUNAL ON 18.4.2013 SETTING ASIDE ITS EARLIER ORDERS AND REST ORING ALL THE APPEALS ON FILE WITHOUT EVEN ISSUING NOTICE TO THE ASSESSE E. ON A QUERY FROM THE BENCH, WHETHER THE REVENUE FILED ANY APPLICATIO N TO RECALL THE EARLIER ORDERS OF THIS TRIBUNAL, THE LD. REPRESENTA TIVE CLARIFIED THAT HE WAS NOT AWARE OF ANYTHING AND THERE IS NO REFERENCE IN THE ORDER OF THE TRIBUNAL ABOUT FILING OF MISCELLANEOUS PETITION BY THE REVENUE. THE TRIBUNAL, IT APPEARS THAT, ON ITS OWN MOTION PA SSED THE ORDER SETTING ASIDE ITS EARLIER ORDERS AND RESTORED THE A PPEALS. 3. THE FIRST CONTENTION OF THE ASSESSEE IS THAT THIS T RIBUNAL CANNOT RECALL THE ORDERS AFTER EXPIRY OF FOUR YEARS EITHER ON ITS OWN OR ON THE APPLICATION FILED BY THE REVENUE. FURTHERMO RE, AFTER EXPIRY OF FOUR YEARS, AN INTEREST WAS VESTED WITH THE ASSESS EE BY OPERATION OF LAW, THEREFORE, THE VESTED INTEREST CANNOT BE DISTU RBED WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE. THE LD. REPRESENT ATIVE PLACED HIS RELIANCE ON THE DECISION OF CHANDIGARH BENCH OF THI S TRIBUNAL IN ACIT M.P. NOS.133 TO 136/14 :- 3 -: VS STATE BANK OF PATIALA IN M.A NOS. 5 TO 7/CHD/201 3, DATED 27.6.2013, THE COPY OF WHICH IS FILED BY THE ASSESSEE. ACCOR DING TO THE LD. REPRESENTATIVE, AFTER EXPIRY OF FOUR YEARS FROM THE DATE OF THE ORDER, THE TRIBUNAL HAS NO POWER TO PASS AN ORDER U/S 254 (2) OF THE ACT BY RECALLING ITS EARLIER ORDER. THE LD. REPRESENTATIV E HAS ALSO PLACED HIS RELIANCE ON THE UNREPORTED JUDGMENT OF KERALA HIGH COURT IN CIT VS STATE BANK OF TRAVANCORE IN R.P. NO.895 OF 2010 DAT ED 30.11.2011, THE COPY OF WHICH IS FILED BY THE ASSESSEE AND SU BMITTED THAT THE APEX COURT IN ELECTRONICS CORPORATION OF INDIA LTD VS UNION OF INDIA & OTHERS [2011] 332 ITR 58 HAS RECALLED ITS EARLIER O RDER. AFTER JUDGMENT OF THE APEX COURT, THERE IS NO SCOPE FOR THE COD C ONSIDERING CLEARANCE FOR FILING APPEAL BETWEEN PUBLIC SECTOR U NDERTAKINGS OR BETWEEN GOVERNMENT AND PUBLIC SECTOR UNDERTAKINGS. THE COD REJECTED THE REVENUES APPLICATION FOR PERMISSION T O FILE APPEAL BEFORE THE TRIBUNAL. THEREFORE, THE KERALA HIGH COURT FOU ND THAT ONCE THE COD REJECTED THE CLAIM OF THE REVENUE FOR FILING TH E APPEAL, THE ORDERS OF THE COD CANNOT BE IGNORED. THE KERALA HIGH COUR T FURTHER FOUND THAT THE APPROVAL GRANTED OR DECLINED BY THE COD CO ULD BE GONE INTO BY THE APPELLATE COURT IN ANY CASE PENDING OR DISPO SED OF. THE APPLICATION OF THE REVENUE TO RESTORE THE APPEAL ON THE BASIS OF THE SUBSEQUENT JUDGMENT WAS REJECTED BY THE KERALA HIGH COURT. REFERRING TO THE DECISION OF DELHI BENCH OF THIS TR IBUNAL IN DCIT VS M.P. NOS.133 TO 136/14 :- 4 -: AIRPORT AUTHORITY OF INDIA [2013] 143 ITD 319, THE LD. REPRESENTATIVE SUBMITTED THAT WHEN THE COD APPROVAL WAS DENIED PRI OR TO THE JUDGMENT OF THE APEX COURT DATED 17.2.2011, ORDER C ANNOT BE RECALLED. ACCORDING TO THE LD. REPRESENTATIVE, THIS DECISION IN THE CASE OF AIRPORT AUTHORITY OF INDIA IS IN FAVOUR OF THE ASSESSEE. THE LD. REPRESENTATIVE HAS ALSO PLACED HIS RELIANCE ON THE UNREPORTED JUDG MENT OF THE HIGH COURT OF JHARKHAND AT RANCHI IN HINDUSTAN COPPER LT D VS UNION OF INDIA & ORS IN W.P.(T) NO.6852 OF 2013, DATED 13.3. 2014, AND SUBMITTED THAT WHEN NO APPLICATION OF THE REVENUE W AS BEFORE THE COD, THE ORDER OF THE TRIBUNAL CANNOT BE RECALLED. ACCORDING TO THE LD. REPRESENTATIVE, IT WAS NOT THE CASE OF THE REVENUE THAT THE APPLICATION FILED BY THE REVENUE FOR COD CLEARANCE WAS PENDING WHEN THE APPEAL WAS DISMISSED BY THIS TRIBUNAL. REFERRING TO ANOTH ER JUDGMENT OF THE MADRAS HIGH COURT IN STATE TRADING CORPORATION VS C OMMISSIONER OF CUSTOMS, W.A.NO.651 OF 2015, DATED 1.6.2015, THE LD . REPRESENTATIVE SUBMITTED THAT ON IDENTICAL SET OF FACTS, THE MADRA S HIGH COURT FOUND THAT THE W.A CANNOT BE RESTORED. ACCORDING TO THE LD. REPRESENTATIVE, SINCE THE ASSESSEE WAS NOT PUT ON NOTICE BEFORE RE CALLING THE ORDER, THE PRINCIPLES OF NATURAL JUSTICE WAS VIOLATED. 4. ON THE CONTRARY, SHRI SHAJI P. JACOB, LD. REPRESENT ATIVE FOR THE REVENUE SUBMITTED THAT THIS TRIBUNAL DISMISSED THE APPEALS OF THE REVENUE ON THE GROUND THAT COD CLEARANCE WAS NOT OB TAINED FOR M.P. NOS.133 TO 136/14 :- 5 -: PROSECUTING THE APPEALS AS PER THE DIRECTION OF THE APEX COURT. THE APEX COURT SUBSEQUENTLY FOUND THAT COD CLEARANCE IS NOT REQUIRED FOR FILING THE APPEAL. THEREFORE, THE TRIBUNAL FOUND T HAT ITS EARLIER ORDERS DISMISSING THE APPEALS NEED TO BE RECALLED. ACCORD INGLY, THE ORDERS WERE RECALLED. ON A QUERY FROM THE BENCH WHETHER THE REVENUE HAS FILED ANY APPLICATION FOR RECALL OF THE EARLIER ORD ERS OF THE TRIBUNAL, THE LD. DR FAIRLY SUBMITTED THAT HE IS NOT AWARE OF ANY APPLICATION FILED BY THE REVENUE. THE FACT REMAINS THAT THE TRIBUNAL RE CALLED ITS ORDERS. ON A QUERY FROM THE BENCH HOW THE TRIBUNAL CAN RECA LL ITS ORDERS AFTER EXPIRY OF FOUR YEARS, ESPECIALLY WITHOUT ISSUING NO TICE, THE LD. DR SUBMITTED THAT ON IDENTICAL SET OF FACTS, THE DELHI BENCH OF THIS TRIBUNAL IN DCIT VS AIRPORT AUTHORITY OF INDIA (SUP RA) FOUND THAT THE REJECTION OF THE MEMORANDUM OF APPEAL IS PRIMARIL Y AN INTERIM ORDER AND NOT AN ORDER U/S 254(1) OF THE ACT. THE LD. D R FURTHER SUBMITTED THAT THE DELHI BENCH OF THIS TRIBUNAL AFTER CONSIDE RING A HYPOTHETICAL CASE WHERE THE TRIBUNAL DISMISSED THE APPEAL FOR WA NT OF COD APPROVAL AND AFTER FOUR YEARS OF THE TRIBUNALS ORD ER, COD APPROVAL WAS GRANTED. UNDER SUCH CIRCUMSTANCES, WHETHER THE LIMITATION IMPOSED U/S 254(2) WOULD HAVE OPERATED OR NOT IS T HE MOST CRUCIAL ASPECT TO BE CONSIDERED FOR DECIDING THE MISCELLANE OUS PETITION. THE TRIBUNAL SPECIFICALLY FOUND THAT AFTER COD APPROVAL WAS GIVEN, THE TRIBUNAL COULD NOT, IN THE INTEREST OF JUSTICE, REF USE TO RECALL ITS ORDER M.P. NOS.133 TO 136/14 :- 6 -: EVEN AFTER FOUR YEARS FROM THE DATE OF THE IMPUGNED ORDER. THE LD. DR HAS ALSO PLACED HIS RELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN CIT VS PANCHU ARUNACHALAM [2010] 323 ITR 31 AND SUBMITTED THAT THE ASSESSEE FILED THE MISCELLANEOU S PETITION FOR THE SECOND TIME, THEREFORE, THE SECOND MISCELLANEOUS PE TITION IS NOT MAINTAINABLE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH THE RECORDS OF THIS TRIBUNAL. PRIMA F ACIE, IT APPEARS THAT THE TRIBUNAL ON ITS OWN PASSED AN ORDER AFTER REFER RING TO THE LATTER JUDGMENT OF THE APEX COURT IN ELECTRONICS CORPORATI ON OF INDIA LTD. RECALLING ITS EARLIER ORDER AND RESTORED THE APPEAL S ON FILE. WE FIND FROM THE RECORDS THAT THE REVENUE FILED APPLICATION S ON 15.1.2013 PRAYING FOR THE RECALL OF THE TRIBUNAL ORDERS ON TH E GROUND THAT COD CLEARANCE IS NO LONGER REQUIRED IN VIEW OF THE JUDG MENT OF THE APEX COURT IN M/S ELECTRONICS CORPORATION OF INDIA VS UO I (CIVIL APPEAL NO.1883 OF 2011). AFTER RECEIVING THE APPLICATIONS FROM THE REVENUE THE SAME WAS NOT NUMBERED AND EVEN TAKEN ON FILE. THE TRIBUNAL SUDDENLY PASSED AN ORDER DATED 18.4.2013 RECALLING ALL THE EARLIER ORDERS ON ITS OWN. THE IMMEDIATE PROVOCATION OF TH E TRIBUNAL MAY BE THE APPLICATIONS FILED BY THE REVENUE TO RECALL ITS EARLIER ORDERS. WHATEVER MAY BE THE REASON, FOUR YEARS PERIOD AS P ROVIDED U/S M.P. NOS.133 TO 136/14 :- 7 -: 254(2) FOR RECTIFICATION HAS EXPIRED EVEN ON THE DA TE OF FILING OF APPLICATIONS BY THE REVENUE. IN ALL FAIRNESS, THIS TRIBUNAL OUGHT TO HAVE ISSUED NOTICE TO THE ASSESSEE AFTER TAKING TH E APPLICATIONS FILED BY THE REVENUE ON RECORD. IT IS UNFORTUNATE THAT T HE TRIBUNAL HAS NOT ISSUED ANY NOTICE AND SUDDENLY PASSED THE ORDER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE APPLICATIONS F ILED BY THE REVENUE WERE NOT TAKEN ON FILE AND THE TRIBUNAL HAS PASSED THE ORDER SUO MOTU, IT CANNOT BE CONSIDERED TO BE A SECOND MISCEL LANEOUS PETITION. FOR ALL PRACTICAL PURPOSES, THIS IS THE FIRST APPLI CATION FILED BY THE ASSESSEE, THEREFORE, THE JUDGMENT OF THE MADRAS HIG H COURT IN PANCHU ARUNACHALAM (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE CASE. SINCE THE ORDER WAS PASSED EX-PARTE WITHOUT HEARING EITHE R THE ASSESSEE OR THE REVENUE, THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT PROVISO TO RULE 24 AND PROVISO TO RULE 25 OF THE INCOME TAX (A PPELLATE TRIBUNAL) RULES, 1963 WOULD COME INTO OPERATION. ONE MAY SA Y THAT RULES 24 AND 25 ARE APPLICABLE ONLY TO APPEALS AND NOT TO TH E MISCELLANEOUS PETITIONS, THE FACT REMAINS THAT THE ORDER WAS PASS ED BY THE TRIBUNAL SUO MOTU RECALLING ITS EARLIER ORDERS THEREFORE, FO R ALL PRACTICAL PURPOSES THE ORDER IS PASSED WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THERE IS GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THEREF ORE, IN EXERCISE OF THE POWERS OF THIS TRIBUNAL UNDER PROVISO TO RULE 24 AN D PROVISO TO RULE M.P. NOS.133 TO 136/14 :- 8 -: 25 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, THE OR DER OF THIS TRIBUNAL DATED 18.4.2013 IS RECALLED AND THE ORDERS OF THIS TRIBUNAL DATED 20.8.2007 AND 21.1.2008 ARE RESTORED. 6. IN THE CASES REFERRED BY THE REVENUE, AN OPPORTUNIT Y WAS GIVEN TO BOTH THE PARTIES AND TRIBUNAL HAS PASSED A N ELABORATE ORDER, THEREFORE, THOSE CASES ARE NOT APPLICABLE TO THE FA CTS OF THE PRESENT CASE. 7. IN THE RESULT, THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OF JULY, 2015, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER / CHENNAI / DATED: 31 ST JULY, 2015 RD !' / COPY TO: 1 . PETITIONER 4. # # $ / CIT 2. %#&' / RESPONDENT 5. ()*# +, / DR 3. # # $ (! *) / CIT(A) 6. )./ 0 / GF