ACIT, CHENNAI V. M/s. Indian Bank, CHENNAI

MA 140/CHNY/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9296 (ITAT-CHENNAI)
• Duration Of Justice: 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 18-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Retrospective amendment
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER .. M.P. NOS. 137, 138, 139 & 140/MDS/2012 (IN I.T.A. NOS. 470 TO 472/MDS/2010 & I.T.A. NO. 08/MDS/2007) ASSESSMENT YEARS : 2004-05 TO 2006-07 & 2003-04 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(2), CHENNAI - 600 034 . (PETITIONER) V. M/S INDIAN BANK, 254-260, AVVAI SHANMUGAM SALAI, CHENNAI - 600 014. PAN : AAACI1607G (RESPONDENT) PETITIONER BY : SHRI SHAJI P. JACOB, ADDL. CIT RESPONDENT BY : SHRI C. NAR ESH, CA DATE OF HEARING : 12.10.2012 DATE OF PRONOUNCEMENT: 12.10.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THESE MISCELLANEOUS PETITIONS FILED BY THE REV ENUE, ITS GRIEVANCE IS THAT THIS TRIBUNAL DID NOT CONSIDER TH E AMENDMENT IN SECTION 115JB(2) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') BROUGHT INTO STATUTE BY FINANCE ACT, 2012. AS PER THE REVE NUE, PRESIDENT OF INDIA HAD GIVEN ASSENT TO THE FINANCE ACT, 2012 ON 28.5.2012 AND M.P. NOS. 137 TO 140/MDS/12 2 THIS TRIBUNAL OUGHT HAVE CONSIDERED THE SAID FINANC E ACT SINCE THE ORDER WAS PASSED ON 11 TH JUNE, 2012. 2. BEFORE US, LEARNED D.R. SUBMITTED THAT THE AMEND MENTS MADE IN SECTION 115JB, BY VIRTUE OF THE NEW EXPLANATION ADDED IS RETROSPECTIVE IN NATURE. ACCORDING TO HIM, THE EXP LANATION WAS CLARIFICATORY IN NATURE AND HENCE THE MISTAKE IN NO T CONSIDERING SUCH RETROSPECTIVELY APPLICABLE PROVISION WAS A MISTAKE APPARENT ON RECORD, REQUIRING A RECTIFICATION UNDER SECTION 254 (2) OF THE ACT. RELIANCE WAS PLACED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF ITO V. ASOK TEXTILES LTD. (41 ITR 732) IN T HIS REGARD. 3. WE HAVE HEARD THE REVENUES COUNSEL. THE ISSUE BEFORE THIS TRIBUNAL WAS REGARDING APPLICATION OF SECTION 115JB TO THE ASSESSEE- BANK WHEN IT WAS NOT REQUIRED PREPARE PROFIT & LOSS ACCOUNT IN ACCORDANCE WITH SCHEDULE VI TO COMPANIES ACT, 1956. THIS TRIBUNAL HAD HELD SECTION 115JB COULD NOT APPLIED TO THE ASS ESSEE, FOLLOWING ITS OWN DECISION IN ASSESSEE'S OWN CASE FOR ASSESSM ENT YEAR 2000- 01 IN I.T.A. NO. 469/MDS/2010. NOW THE CONTENTION OF THE DEPARTMENT IS THAT SECTION 115JB(2) HAS BEEN AMENDE D. EVEN IF THE SAID CONTENTION IS ACCEPTED, IT IS CLEAR THAT THE A MENDMENT MADE BY THE FINANCE ACT, 2012 IS EFFECTIVE ONLY FROM 1.4.20 13. EXPLANATION 3 M.P. NOS. 137 TO 140/MDS/12 3 NO DOUBT, DOES SPECIFY THE YEARS WHERE AN ASSESSEE HAS OPTION TO FOLLOW EITHER THE PROVISIONS OF COMPANIES ACT OR TH E PROVISIONS OF THE ACT GOVERNING SUCH ASSESSEE. THE QUESTION WHETHER AN AMENDMENT BROUGHT IN FINANCE ACT, 2012, EXPLICITLY WITH EFFEC T FROM 1.4.2013 CAN BE RETROSPECTIVELY CONSTRUED, IS NOT AN ISSUE, WHIC H IN OUR OPINION IS AMENABLE TO RECTIFICATORY PROCEEDINGS UNDER SECTION 254(2) OF THE ACT. VIDE RULE 34A OF APPELLATE TRIBUNAL RULES, 19 63, AN APPLICATION UNDER SECTION 254(2) SHOULD CLEARLY AND CONCISELY S TATE THE MISTAKE ON RECORD ON WHICH RECTIFICATION IS SOUGHT. NOT ON LY HAS REVENUE FAILED TO SHOW WHAT WAS THE MISTAKE WHICH WAS APPAR ENT ON RECORD, BUT, ON THE OTHER HAND, IT IS SEEKING A REVIEW OF T HE ORDER OF THE TRIBUNAL IN THE GUISE OF RECTIFICATION ORDER. THE PROVISIONS OF THE ACT FOR MOVING A RECTIFICATION PETITION, WHERE THERE IS A MISTAKE WHICH IS CLEARLY APPARENT ON RECORD, SEEMS TO BE MISUSED BY THE REVENUE. 4. AS FOR THE RELIANCE PLACED ON THE JUDGMENT OF HO NBLE APEX COURT IN THE CASE OF ASOKA TEXTILES (SUPRA), THERE THE ISSUE WAS NOT WHETHER A RETROSPECTIVE AMENDMENT COULD BE A BASIS FOR A RECTIFICATORY PROCEEDING. MISTAKE IN LAW WAS ALREA DY THERE WHEN THE A.O. FAILED TO CHARGE INTEREST IN THE ASSESSMENT. M.P. NOS. 137 TO 140/MDS/12 4 5. WE ARE FORTIFIED IN TAKING THIS VIEW BY THE JUDG MENT OF HONBLE ALLAHABAD HIGH COURT IN REVIEW PETITION NO.10 OF 20 11 IN J.B. ROY V. DCIT DATED 7.9.2012, WHERE IT WAS HELD THAT CASES A LREADY SETTLED BEFORE AN AMENDMENT TO ACT CANNOT BE RE-OPENED. TH EIR LORDSHIP TOOK NOTICE OF THE THE RATIO LAID DOWN BY HONBLE A PEX COURT IN BABU RAM V. C.C. JACOB AIR (1999)SC 1845, WHERE IT WAS O BSERVED THAT THE PROSPECTIVE DECLARATION OF LAW IS A DEVISE INNO VATED BY THE APEX COURT TO AVOID REOPENING OF SETTLED ISSUES AND TO P REVENT MULTIPLICITY OF PROCEEDINGS. SIMILARLY, AMENDMENT COMING INTO EFFE CT ON FIRST APRIL 2013 IS APPLICABLE TO FUTURE CASES EVEN IF IT IS TO AVOID UNCERTAINTY AS PER THE RATIO LAID DOWN IN M.A. MURTHY V. STATE OF KARNATAKA (264 ITR 1) (SC). THEREFORE, THE AMENDMENT INTRODUCED IN SE CTION 115JB HAS THE EFFECT ONLY FROM ASSESSMENT YEAR 2013-14 AND NO T EARLIER. ON THE DATE WHEN THE ISSUE WAS DECIDED, THE LAW THAT STOOD WAS CORRECTLY APPLIED. THE APPEAL WAS RIGHTLY DISMISSED AS PER T HE THEN LAW AND THE SUBSEQUENT AMENDMENT IS NOT APPLICABLE AS THE M ATTER HAS ALREADY ATTAINED FINALITY. 6. IN THE RESULT, ALL THE MISCELLANEOUS PETITIONS F ILED BY THE REVENUE ARE DISMISSED. M.P. NOS. 137 TO 140/MDS/12 5 THE ORDER WAS PRONOUNCED IN THE COURT ON FRIDAY, TH E 12 TH OF OCTOBER, 2012. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 12 TH OCTOBER, 2012. KRI. COPY TO: PETITIONER/RESPONDENT/CIT(A)/CIT/D.R./GUA RD FILE