M/s. Goyal and Industries Ltd., New Delhi V. ITO, New Delhi

MA 144/DEL/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9700 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2000-2001
• Appeal Filed On: 04-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Keywords: Retrospective amendment
• Section: 80HHC

Judgement Text

M.A. NO. 144/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER MA NO. 144/DEL/2012 (IN ITA NO. 4063/DEL/2010) A.Y. 2000-01 M/S GOYAL IMPEX & INDUSTRIES LTD., VS. I.T.O., C OY. WARD 12(2), 1291, POCKET-I, SECTOR-C, NEW DELHI VASANT KUNJ, NEW DELHI 110 070 (PAN: AAACG4105D) (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. RANO JAIN, ADV. DEPARTMENT BY : SH. SATPAL SINGH, D.R. ORDER PER SHAMIM YAHYA, AM BY WAY OF THIS MISC. APPLICATION ASSESSEE SEEKS REC TIFICATION OF MISTAKE IN THE ORDER OF THE TRIBUNAL PASSED IN ITA N O. 4063/DEL/2010 DATED 16.9.2011 FOR ASSESSMENT YEAR 2000-01. THE A SSESSEE HAS SUBMITTED AS UNDER:- 1. THE ABOVE SAID APPEAL WAS FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (A) IN FAVOUR OF THE ASSESSEE. 2. YOUR HONOURS HAVE DECIDED THE APPEAL AND PASSED AN ORDER DATED 16.9.2011. 3. IN THE SAID APPEAL THE REVENUE HAS CHALLENGED TH E ACTION OF THE LD. COMMISSIONER OF INCOME TAX (A) IN M.A. NO. 144/DEL/2012 2 ALLOWING DEDUCTION UNDER SECTION 80HHC IN RESPECT O F THE DEPB RECEIVED BY THE APPELLANT. 4. THE SAID DEDUCTION WAS ALLOWED BY THE LD. COMMISSIONER OF INCOME TAX (A) FOLLOWING THE JUDGEMENT OF THE SPECIAL BENCH OF THE ITAT, MUMBAI IN THE CASE OF TOPMAN EXPORTS VS. C.I.T. 5. YOUR HONOURS IN PARA 6 HAS HELD THAT THE ASSESSE E IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC OF T HE ACT IN RESPECT OF THE DEPB BENEFIT IN VIEW OF THE JUDGEMENT OF THE BOMBAY HIGH COURT IN THE CASE OF C.I.T. VS. KALPATARU COLOURS AND CHEMICALS 328 ITR 4 51 (MUM) WHICH HAS OVERRULED THE JUDGEMENT OF THE SPECIAL BENCH OF THE ITAT, MUMBAI IN THE CASE OF TOPMAN EXPORTS (SUPRA). 6. IT IS SUBMITTED THAT THE JUDGEMENT OF THE BOMBAY H IGH COURT HAS NOW BEEN OVERRULED BY THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS VS. C.I.T. VIDE ITS ORDER DATED 8 TH FEBRUARY, 2012. 7. IN THE SAID JUDGMENT IT HAS BEEN HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC IN RESPECT OF THE DEPB BENEFIT RECEIVED BY IT. 8. IN THE ABOVE SAID JUDGEMENT THE HONBLE SUPREME COURT HAS UPHELD THE JUDGEMENT OF THE SPECIAL BENC H OF THE ITAT, MUMBAI IN THE CASE OF TOPMAN EXPORTS (SUPRA). M.A. NO. 144/DEL/2012 3 9. IN VIEW OF THE JUDGEMENT OF THE BOMBAY HIGH COURT HAS NOW BEEN REVERSED BY THE HONBLE SUPREME COURT A MISTAKE APPARENT FROM RECORD HAS OCCURRED IN THE ORDER PASSED BY YOUR HONOURS. 10. IN THIS REGARD RELIANCE IS BEING PLACED ON THE JUDGEMENT OF THE BOMBAY HIGH COURT IN THE CASE OF COMPTROLLER OF ESTATE VS. B.G. BADAMIA WHEREBY IT WAS HELD THAT THE SUBSEQUENT JUDGEMENT OF THE SUPREME COURT WILL BE A VALID GROUND FOR RECTIFICATION BY T HE TRIBUNAL. 2. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT TH ERE IS NO MISTAKE IN THE ORDER. HENCE, HE OPPOSED THE RECALL /RECTIFICATION IN THE ORDER OF THE TRIBUNAL. 3. WE HAVE CAREFULLY CONSIDERED THE PROPOSITIONS AN D SUBMISSIONS OF BOTH THE PARTIES. WE FIND THAT ON THE ISSUE FOR WHICH THE MISC. APPLICATION HAS BEEN FILED, THE TRIBUNALS ADJUDICA TION WAS AS UNDER IN ITS ORDER. 6. AT THE OUTSET, IT WAS FAIRLY CONCEDED BY LD. CO UNSEL OF THE ASSESSEE THAT THE APPEAL FILED BY THE REVENUE HAS TO BE DECIDED IN FAVOUR OF THE REVENUE, ACCORDING TO TH E DECISION OF THE HONBLE MUMBAI HIGH COURT IN THE CASE OF C.I.T . VS. KALPATARU COLOURS & CHEMICALS [328 ITR 451]. HE ALS O FAIRLY CONCEDED THAT ACCORDING THE SAID DECISION ASSESSEE DOES NOT QUALIFY FOR DEDUCTION U/S 80HHC. ACCORDING TO THE AFOREMENTIONED DECISION, THEIR LORDSHIPS OF HONBLE MUMBAI HIGH COURT WHILE CONSIDERING THE PROVISIONS OF THIR D PROVISO UNDER SECTION 80HHC(3)(C) HAVE POINTED THAT WHERE T HE M.A. NO. 144/DEL/2012 4 ASSESSEE HAS EXPORT TURNOVER EXCEEDING ` 10 CRORES , THE GRANT OF ADDITIONAL BENEFIT OF DEDUCTION ON DEPB IS CONDITIONED BY FULFILLMENT OF TWO CONDITIONS WHICH A RE REFERRED TO THEREIN AND THESE CONDITIONS ARE THAT T HE ASSESSEE MUST HAVE NECESSARY AND SUFFICIENT EVIDENC E THAT (I) HE HAD AN OPTION TO CHOOSE EITHER DUTY DRAW BACK OR DUTY ENTITLED PASS BOOK SCHEME AND (II) THE RATE OF D UTY DRAW BACK CREDIT ATTRIBUTABLE TO CUSTOM DUTY WAS HI GHER THAN THE RATE OF CREDIT ALLOWABLE UNDER THE DEPB SCH EME. WITH REFERENCE TO THIS OBSERVATION OF THEIR LORDSHI PS, LD. AUTHORISED REPRESENTATIVE WAS REQUIRED TO EXPLAIN AS TO WHETHER THE ASSESSEE IN THE PRESENT CASE HAVING TUR NOVER EXCEEDING ` 10 CRORES I.E. (` 14,61,55,601/- FOB VAL UE OF EXPORT TURNOVER AS GIVEN IN THE COMPUTATION OF DEDUC TION U/S. 80HHC IN THE ORDER OF THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) AT PAGE NO. 8), FULFILLED THE CONDIT ION AS LAID DOWN IN THE AFOREMENTIONED THIRD PROVISO OF SECTIO N 80HHC(3). HE FAIRLY CONCEDED THAT THAT THE ASSESS EE DOES NOT FULFIL THESE CONDITIONS. 7. IN THIS VIEW OF THE SITUATION, WE ALLOW THE AP PEAL FILED BY THE REVENUE AND HOLD THAT THE ASSESSEE IS NOT EL IGIBLE FOR ADDITIONAL BENEFIT OF DEDUCTION U/S. 80HHC AS GIVE N IN THE THIRD PROVISO U/S 80HHC(3)(C). 4. NOW AGAINST THE ABOVE ORDER THE ASSESSEE HAS FIL ED THE MISC. APPLICATION PLEADING THAT THE APPEAL WAS DECIDED BY CONSIDERING THE HONBLE MUMBAI HIGH COURT DECISION IN THE CASE OF C.I .T. VS. KALPATARU COLOURS AND CHEMICALS 328 ITR 451 (MUM). NOW IT IS T HE SUBMISSION OF M.A. NO. 144/DEL/2012 5 THE LD. COUNSEL OF THE ASSESSEE THAT THE SAID MUMBA I HIGH COURT JUDGEMENT HAS NOW BEEN OVERRULED BY THE HONBLE SUP REME COURT IN THE CASE OF TOPMAN EXPORTS VS. C.I.T. VIDE ITS O RDER DATED 8.2.2012. UNDER THE CIRCUMSTANCES, ASSESSEE HAS REQUESTED THAT THE APPEAL MAY BE RECALLED/RECTIFIED TO FOLLOW THE ORDER OF THE HO NBLE APEX COURT. 5. WE FIND THAT THE HONBLE APEX COURT IN THE CASE SAURASHTRA KUTCH STOCK EXCHANGE LTD. REPORTED IN 305 ITR 227 (SC) HA S HELD AS UNDER:- 'THE CORE ISSUE, THEREFORE, IS WHETHER NON- CONSIDERATION OF A DECISION OF JURISDICTIONAL COURT (IN THIS CASE A DECISION OF THE HIGH COURT OF GUJARAT) O R OF THE SUPREME COURT CAN BE SAID TO BE A 'MISTAKE APPARENT FROM THE RECORD'? IN OUR OPINION, BOTH - TH E TRIBUNAL AND THE HIGH COURT-WERE RIGHT IN HOLDING T HAT SUCH A MISTAKE CAN BE SAID TO BE A 'MISTAKE APPARENT FROM THE RECORD' WHICH COULD BE RECTIFIED UNDER SECTION 254(2). A SIMILAR QUESTION CAME UP FOR CONSIDERATION BEFORE THE HIGH COURT OF GUJARAT IN SUHRID GEIGY LTD. V. COMMISSIONER OF SURTAX [1999] 237 ITR 834. IT WAS HELD BY THE DIVISION BENCH OF THE HIGH COURT THAT IF THE POINT IS COVERED BY A DECISION OF THE JURISDICTI ONAL COURT RENDERED PRIOR OR EVEN SUBSEQUENT TO THE ORD ER OF RECTIFICATION, IT COULD BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD UNDER SECTION 254(2) OF T HE ACT AND COULD BE CORRECTED BY THE TRIBUNAL. IN OUR JUDGEMENT, IT IS ALSO WELL SETTLED THAT A JU DICIAL DECISION ACTS RETROSPECTIVELY. ACCORDING TO M.A. NO. 144/DEL/2012 6 BLACKSTONIAN THEORY, IT IS NOT THE FUNCTION OF THE COURT TO PRONOUNCE A NEW RULE BUT TO MAINTAIN AND EXPOUND THE OLD ONE. IN OTHER WORDS, JUDGES DO NOT MAKE LAW, THEY ONLY DISCOVER OR FIND THE CORRECT LAW . THE LAW HAS ALWAYS BEEN THE SAME. IF A SUBSEQUEN T DECISION ALTERS THE EARLIER ONE, IT (THE LATER DECI SION) DOES NOT MAKE NEW LAW. IT ONLY DISCOVERS THE CORREC T PRINCIPLE OF LAW WHICH HAS TO BE APPLIED RETROSPECTIVELY. TO PUT IT DIFFERENTLY, EVEN WHERE AN EARLIER DECISION OF THE COURT OPERATED FOR QUITE S OME TIME, THE DECISION RENDERED LATER ON WOULD HAVE RETROSPECTIVE EFFECT CLARIFYING THE LEGAL POSITION WHICH WAS EARLIER NOT CORRECTLY UNDERSTOOD. 6. WE FIND THAT IN MISC. APPLICATION NOS. 552 & 553( DEL)/2008 IN THE CASE OF SHRI MADAN PAL VS. ITO, THE TRIBUNAL VIDE ORD ER DATED 13.2.2009 HAS CONSIDERED THE SIMILAR ISSUE AS UNDER:- 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS CLEAR FROM THE D ECISION IN THE CASE OF VINAY CEMENT LTD. AND P.M. ELECTRONIC S LTD. (SUPRA) THAT THE CORRECT POSITION OF LAW IS THAT PA YMENTS TO PROVIDENT FUND AND ESIC ARE DEDUCTIBLE PROVIDED A PAY MENT IS MADE UP TO THE DUE DATE OF FILING THE RETURN U/ S. 139(1). THEREFORE, IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF V.G. BADAMIA (SUPRA), THE ORDE R OF THE TRIBUNAL SUFFERS FROM A MISTAKE APPARENT FROM RECOR D, WHICH CAN BE RECTIFIED U/S. 254(2) OF THE ACT. ON PERUSAL OF THE ORDER, WE FIND THAT THE DATES OF PAYMENT FOR TH E TWO M.A. NO. 144/DEL/2012 7 YEARS ARE NOT ASCERTAINABLE. THEREFORE, THE ASSESS ING OFFICER IS DIRECTED TO VERIFY WHETHER THE PAYMENTS HAD BEEN MADE BEFORE THE DUE DATE OF FILING OF THE RETUR N FOR THESE YEARS AND, IF SO, ALLOW THE DEDUCTION IN COMP UTING THE INCOME. 7. THUS, FROM THE ABOVE PRECEDENTS AND DISCUSSIONS, WE FIND THAT THE CASE LAW RELIED UPON BY THE TRIBUNAL IS NO LONG ER SUSTAINABLE ON THE VIEW OF THE HONBLE APEX COURT DECISION IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. REPORTED IN 305 ITR 227(S UPRA). ACCORDINGLY, NOW THEREFORE, KEEPING IN VIEW THE AF ORESAID DECISION IN OUR MIND, WE RECALL THE ORDER OF THE TRIBUNAL. THE REGISTRY IS DIRECTED TO FIX THE CASE FOR HEARING IN THE NORMAL COURSE. 8. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/12/201 2. SD/- SD/- [I.C. SUDHIR] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 14/12/2012 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES