M/s. Mali Florex Ltd., Hyderabad V. Dy.CIT, Range 16(2), Hyderabad

MA 150/HYD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0582 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 25-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: K C DEVADAS
• Section: 153A; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBE R AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER MISC. NO.150/HYD/2013 (IN ITA NO.891/HYD/2011) : ASSESSME NT YEAR 2008-09 M/S. MALI FLOREX LTD., HYDERABAD ( PAN AACCM 8205 A ) V/S DY. COMMISSIONER OF INCOME-TAX CIRCLE 16(2), HYDERABAD (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI K.C.DEVADAS RESPONDENT BY : SHRI M.H.NAIK, DR DATE OF HEARING 21.06.2013 DATE OF PRONOUNCEMENT 12.07.2013 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: BY THIS MISCELLANEOUS APPLICATION, ASSESSEE SEEKS RECTIFICATION/CLARIFICATION OF THE ORDER OF THIS TR IBUNAL DATED 28.9.2012 INSOFAR AS IT RELATED TO ITA NO.891/HYD/2011 OF THE ASSESSEE, FOR THE ASSESSMENT YEAR 2008-09, ON THE GROUND THAT CERTAIN MISTAKES APPARENT FROM RECORD HAVE CREPT INTO THE SAME LEAVING SOME S COPE FOR DOUBT/INTERPRETATION AND AMBIGUITY . 2. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTE D THAT THE ASSESSEE RAISED THE GROUNDS IN ITS APPEAL ITA NO.8 91/HYD/2P011 WITH REGARD TO LEVY OF INTEREST UNDER S.234A AND S.234B OF THE INCOEME-0TAX ACT, AND THE LEARNED AUTHORISED REPRESENTATIVE AT T HE TIME OF ARGUING ON THE ORIGINAL APPEAL HAS RELIED ON THE JUDGMENTS OF THE DELHI HIGH COURT IN THE CASE OF CIT V/S. K.K.MARKETING (278 ITR 596) AN D IN THE CASE OF VISWANATH KHANNA VS. UNION OF INDIA (335 ITR 548), AND THE ASSESSEE MA NO.150/HYD/2013(IN ITA NO.891/HYD/2013) M/S. MALI FLOREX LTD., HYDERABAD 2 HAS ALSO RELIED ON THE JUDGMENT OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V/S. ASHOK KUMAR (334 ITR 355). HE SUBMITTED THAT THE TRIBUNAL HAS METICULOUSLY MENTIONED THOSE JUDGMENT S IN ITS ORDER AND GAVE ITS FINDINGS AT PARA 37 OF ITS ORDER DATED 28 .9.2012 IN THE FOLLOWING MANNER- 37. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT THE SIEZED AMOUNT HAS TO BE ADJUSTED IN TERMS OF SE CTION 132B OF THE ACT. HOWEVER, AFTER ADJUSTING EXISTING LIABILI TIES, IF ANY AMOUNT REMAINS, THE SAME HAS TO BE ADJUSTED TOWARDS OUTSTANDING TAX RELATING TO THE ASSESSMENT COMPLETED U/S. 153A OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO REC ALCULATE THE INTEREST U/S. 234A AND 234B OF THE ACT. .. ACCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE, THE ASSESSING OFFICER HOWEVER, HAS NOT FOLLOWED THE DIRECTION OF THE TRIB UNAL AND LEVIED INTEREST UNDER S234A AND 234B OF THE ACT, WITHOUT GIVING CRE DIT TO THE SEIZED CASH. ACCORDING TO HIM, THERE IS A MISTAKE APPAREN T FROM RECORD AND APPROPRIATE DIRECTION BE GIVEN TO THE ASSESSING OF FICER BY GIVING CATEGORICAL FINDINGS AND SPECIFIC DIRECTIONS TO THE ASSESSING OFFICER. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, STRONGLY SUPPORTING THE ORDER OF THE TRIBUNAL, SUBM ITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD, WARRANTING ANY RECTIF ICATION IN TERMS OF S.254(2) OF THE ACT. 4. WE HEARD BOTH SIDES AND PERUSED THE MATERIAL ON RECORD, IN THE LIGHT OF THE ORDER OF THE TRIBUNAL DATED 28.9.2 012. THERE IS NO MISTAKE IN THE SAID ORDER OF THE TRIBUNAL, WARRANTI NG ANY RECTIFICATION, AS THE TRIBUNAL MADE IT AMPLY CLEAR AND GAVE DIRECTION THAT SEIZED AMOUNT HAS TO BE ADJUSTED FIRST TOWARDS EXISTING LIABILI TIES AND THEREAFTER IT SHOULD BE ADJUSTED TOWARDS THE OUTSTANDING TAX LIA BILITY OF THE ASSESSMENT YEARS UNDER CONSIDERATION, AND ACCORDIN GLY DIRECTED THE ASSESSING OFFICER TO RECALCULATE THE INTEREST UNDER S.234A AND 234B OF THE INCOME-TAX ACT. IT CLEARLY MEANS THAT IF THERE IS NO EXITING TAX LIABILITY AT THE TIME OF SEIZURE OF THE CASH, THE S EIZED AMOUNT SHOULD BE MA NO.150/HYD/2013(IN ITA NO.891/HYD/2013) M/S. MALI FLOREX LTD., HYDERABAD 3 ADJUSTED TOWARDS PAYMENT OF ADVANCE TAX IN TERMS OF JUDGMENTS CITED BY THE ASSESSEE, NOTED ABOVE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO PASS APPROPRIATE ORDERS IN CONFORMITY WITH THE O RDER OF THE TRIBUNAL. 5. IT IS PERTINENT TO MENTION AT THIS JUNCTURE T HAT THE INCOME-TAX AUTHORITIES ARE REQUIRED TO EXERCISE THEIR POWERS I N ACCORDANCE WITH LAW, AS PER THE POWER GIVEN TO THEM IN SPECIFIC SECTIONS . IF THE POWERS CONFERRED ON A PARTICULAR AUTHORITY ARE EXERCISED B Y ANOTHER AUTHORITY WITHOUT MANDATE OF LAW, IT WOULD CREATE CHAOS IN TH E ADMINISTRATION OF LAW AND HIERARCHY OF ADMINISTRATION WOULD MEAN NOTHING. JUDGMENT OF A HIGHER FORUM CANNOT BE SUBSTITUTED BY THE DECISIONS OF THE LOWER AUTHORITIES. JUDICIAL DISCIPLINE REQUIRES THAT THER E CANNOT BE ANY AMOUNT OF DISREGARD TO THE SUPERIOR AUTHORITY IN THE HIERARCH Y BY THE ASSESSING OFFICER. WHEN ONCE THE TRIBUNAL DECIDES AN ISSUE IN ONE WAY, THE ONLY COURSE AVAILABLE TO THE ASSESSING OFFICER IS TO FOL LOW THE ORDER OF THE TRIBUNAL IN TRUE SPIRITS, AND IT IS NOT PERMISSIBLE FOR THE ASSESSING OFFICER TO TAKE A DIFFERENT VIEW, OR TO SIT IN JUDGMENT OVE R THE ORDER OF THE TRIBUNAL BY INTERPRETING THE SAME IN THE MANNER HE WANTED. THUS, THE ASSESSING OFFICER IS DUTY BOUND TO STRICTLY ADHERE TO THE DIRECTIONS OF THE TRIBUNAL WHILE RE-DECIDING THE ISSUES IN PURSUANCE OF THE ORDERS OF THE TRIBUNAL. AT THIS JUNCTURE, IT IS APT TO REFER TO T HE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF STATE OF A NDHRA PRADESH V/S. CTO AND ANOTHER (169 ITR 564), WHEREIN IT HAS BEEN HELD AS FOLLOWS- THE TRIBUNALS FUNCTIONING WITHIN THE JURISDICTION OF A PARTICULAR HIGH COURT IN RESPECT OF WHOM THE HIGH COURT HAS THE POWER OF SUPERINTENDENCE UNDER ARTICL E 227 ARE BOUND TO FOLLOW THE DECISIONS OF THE HIGH COURT UNLESS, ON AN APPEAL TO THE SUPREME COURT, TH E OPERATION OF THE JUDGMENT IS SUSPENDED. IT IS NOT PERMISSIBLE FOR THE AUTHORITIES AND THE TRIBUNALS T O IGNORE THE DECISIONS OF THE HIGH COURT OR TO REFU SE TO FOLLOW THE DECISIONS OF THE HIGH COURT ON THE PRETE XT THAT AN APPEAL HAS BEEN FILED IN THE SUPREME COU RT WHICH IS PENDING OR THAT STEPS ARE BEING TAKEN TO F ILE AN APPEAL. IF ANY AUTHORITY OR THE TRIBUNAL REF USES TO FOLLOW ANY DECISION OF THE HIGH COURT ON THE ABOVE GROUNDS, IT WOULD BE CLEARLY GUILTY OF COMMITTING CONTEMPT OF THE HIGH COURT AND IS LIABLE TO BE PROC EEDED AGAINST. AT THIS JUNCTURE, IT IS ALSO PERTINENT TO MENTION T HE OBSERVATIONS OF THE HIGH COURT, BY PLACING RELIANCE ON THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF SUBRAMANIAN ITO V/S SIEMENS INDIA LTD. (156 ITR 11), WHICH ARE AS FOLLOWS- MA NO.150/HYD/2013(IN ITA NO.891/HYD/2013) M/S. MALI FLOREX LTD., HYDERABAD 4 REFERENCE MAY ALSO BE INVITED TO THE DECISION OF T HE BOMBAY HIGH COURT IN SUBRAMANIAN, ITO V. SIEMENS INDIA LTD. [1985] 156 ITR 11. THE QUESTI ON THAT AROSE FOR CONSIDERATION IN THIS CASE IS WHETHER THE INCOME-TAX OFFICER IS BOUND BY THE DECI SION OF A SINGLE JUDGE OR A DIVISION BENCH OF THE COURT WITHIN WHOSE JURISDICTION HE IS OPERAT ING EVEN IF AN APPEAL HAS BEEN PREFERRED AGAINST SUCH DECISION AND IS PENDING. THE FOLLOWING OBSERVATIONS OF THE BOMBAY HIGH COURT MAY BE EXTRACTED : 'SO FAR AS THE LEGAL POSITION IS CONCERNED, THE ITO WOULD BE BOUND BY A DECISION OF THE SUPREME COURT AS ALSO BY A DECISION OF THE HIGH COURT OF THE STATE WITHIN WHOSE JURISDICTION HE IS (FUNCTIONING), IRRESPECTIVE OF T HE PENDENCY OF ANY APPEAL OR SPECIAL LEAVE APPLICATION AGAINST THAT JUDGMENT. HE WOULD E QUALLY BE BOUND BY A DECISION OF ANOTHER HIGH COURT ON THE POINT, BECAUSE NOT TO FOL LOW THAT DECISION WOULD BE TO CAUSE GRAVE PREJUDICE TO THE ASSESSEE. WHERE THERE IS A CONFLICT BETWEEN DIFFERENT HIGH COURTS, HE MUST FOLLOW THE DECISION OF THE HIG H COURT WITHIN WHOSE JURISDICTION HE IS (FUNCTIONING), BUT IF THE CONFLICT IS BETWEEN DECISIONS OF OTHER HIGH COURTS, HE MUST TAKE THE VIEW WHICH IS IN FAVOUR OF THE ASSESS EE AND NOT AGAINST HIM. SIMILARLY, IF THE INCOME-TAX APPELLATE TRIBUNAL HAS DECIDED A POI NT IN FAVOUR OF THE ASSESSEE, HE CANNOT IGNORE THAT DECISION AND TAKE A C ONTRARY VIEW, BECAUSE THAT WOULD EQUALLY PREJUDICE THE ASSESSEE.' (EMPHASIS SUPPLIED) 6. IN THE LIGHT OF THE ABOVE DISCUSSION, WHILE TH ERE IS NO WARRANT FOR RECTIFICATION OF THE ORDER OF THE TRIBUNAL, IN THE ABSENCE OF ANY SPECIFIC MISTAKE THEREIN, AND THE GRIEVANCE IF ANY TO THE AS SESSEE, ARISES OUT OF THE CONSEQUENTIAL ORDERS PASSED BY THE ASSESSING OF FICER, WE ONLY DIRECT THE ASSESSING OFFICER TO PASS APPROPRIATE ORDERS IN CONFORMITY WITH THE ORDER OF THE TRIBUNAL DATED 28.9.2012, AND DISPOSE OF THIS MISCELLANEOUS APPLICATION ACCORDINGLY. 7. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISPOSED OF IN THE TERMS NOTED ABOVE. ORDER PRONOUNCED IN THE COURT ON 12.07.2013 SD/- SD/- ( SAKTIJIT DEY ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER. DT/- 12 TH JULY, 2013 COPY FORWARDED TO: 1. 2. 3 M/S. MALI FLOREX LTD., 4-51/L/88 PLOT NO.88 LUMBINI SLN SPRINGS, GACHIBOWLI, HYDERABAD 500 032 DY. COMMISSIONER OF INCOME-TAX CIRCLE 16(2), HYDERA BAD COMMISSIONER OF INCOME-TAX(APPEALS) I HYDERABAD MA NO.150/HYD/2013(IN ITA NO.891/HYD/2013) M/S. MALI FLOREX LTD., HYDERABAD 5 4. COMMISSIONER OF INCOME-TAX CENTRAL HYDERABAD 5 . DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S.