ACIT, Trichy V. M/s. The Standard Textiles, Karur

MA 175/CHNY/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7152 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 14-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 22-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K E B RANGARAJAN JUNIOR
• Assessee Lawyers: S SRIDHAR
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER, AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER .. M.P. NOS. 175 & 176/MDS/2010 (IN I.T.A. NOS. 2003 & 2004/MDS/2008) ASSESSMENT YEARS : 2002-03 & 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, RANGE II, TRICHY. (PETITIONER) V. M/S THE STANDARD TEXTILES, BALAJI NAGAR, SEMMADAI, SALEM MAIN ROAD, KARUR. PAN : AAAFT1844M (RESPONDENT) PETITIONER BY : SHRI K.E.B. RANGARAJAN, JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI S. SRI DHAR, ADVOCATE DATE OF HEARING : 14.10.2011 DATE OF PRONOUNCEMENT: 21.10.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THROUGH THESE MISCELLANEOUS PETITIONS, GRIEVANCE RA ISED BY THE REVENUE IS THAT THIS TRIBUNAL HAD REMITTED THE ISSU E RELATING TO CLAIM FOR DEDUCTION UNDER SEC. 80HHC ON DEPB BENEFITS BAC K TO THE FILE OF AO, FOR FRESH CONSIDERATION IN ACCORDANCE WITH THE GUIDELINES LAID M.P. NOS. 175 & 176/MDS/10 2 DOWN BY THE SPECIAL BENCH IN THE CASE OF TOPMAN EXP ORTS V. ITO (318 ITR(AT)87). ACCORDING TO THE LD. DR, HONBLE B OMBAY HIGH COURT HAS IN THE CASE OF CIT VS. KALPATARU COLOURS & CHEMICALS (328 ITR 451) REVERSED THE DECISION OF THE SPECIAL BENCH IN TOPMAN EXPORTS (SUPRA) AND HENCE THERE IS A MISTAKE APPARE NT IN THE ORDER OF THE TRIBUNAL IN THIS REGARD. 2. LEARNED D.R. SUBMITTED THAT THE GUIDELINES MENT IONED IN SPECIAL BENCH ORDER IN TOPMAN EXPORTS CASE NO MORE EXISTED, SINCE IT WAS OVERTURNED BY HON. BOMBAY HIGH COURT IN KALP ATARU COLOURS & CHEMICALS CASE (SUPRA). THEREFORE, ACCORDING TO HI M, THE AO IF HE FOLLOWED THE GUIDELINES GIVEN IN TOPMAN EXPORTS CA SE OF SPECIAL BENCH, WILL BE DOING AN ACT OF JUDICIAL INDISCIPLIN E, SINCE HE WILL HAVE TO GO BY A DECISION WHICH WAS OVERTURNED BY A HIGHE R AUTHORITY. 3. AS AGAINST ABOVE THE LD. AR SUBMITTED THAT THERE WAS NO ERROR APPARENT IN THE ORDER OF THE TRIBUNAL SUPRA. (I) AS ON DATE WHEN THE TRIBUNAL PASSED THE ORDER, THE SPECIAL BENCH DECISION IN TOPMAN EXPORTS CASE WAS THE ONLY AUTHORITY ON THE ISSUE. M.P. NOS. 175 & 176/MDS/10 3 (II) THERE WILL BE A RECTIFICABLE MISTAKE ONLY IF THERE WAS A DECISION OF THE JURISDICTIONAL HIGH COURT OR THE AP EX COURT, AND THERE WAS NOTHING OF THESE SORTS FOR CHENNAI BENCH OF THE TRIBUNAL TO EXERCISE ITS POWERS UNDER SEC. 254(2) OF THE ACT. (III) GIVING ANY FURTHER DIRECTION TO THE A O WILL RESULT IN A REVIEW OF THE ORDER OF THIS TRIBUNAL. (IV) REVENUE HAD TAKEN THE SUBJECT ORDER OF THE TR IBUNAL IN APPEAL BEFORE THE JURISDICTIONAL HIGH COURT AND THE APPEAL HAVING BEEN ADMITTED, AN MP CANNOT BE ENTERTAINED ON SUCH ORDER. 4. WE HAVE SEEN THE ORDERS OF THE TRIBUNAL. ONE OF THE ISSUES RAISED BY THE ASSESSEE IN THE APPEAL WAS REGARDING THE CALCULATION OF DEDUCTION UNDER SEC. 80HHC OF THE ACT ON DEPB BENEF ITS. THIS TRIBUNAL HAD HELD AS UNDER AT PARA 5 OF THE ORDERS IMPUGNED :- RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIAL B ENCH CITED SUPRA, WE ARE RESTORING THIS MATTER TO THE FI LE OF THE ASSESSING OFFICER WITH A DIRECTION TO FOLLOW THE DE CISION OF THE SPECIAL BENCH AND DECIDE THE ISSUE ACCORDINGLY, AFTE R GIVING EFFECTIVE AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH TH E ASSESSING OFFICER BY PROVIDING NECESSARY DETAILS THAT WOULD BE REQUIRED BY M.P. NOS. 175 & 176/MDS/10 4 THE ASSESSING OFFICER FOR DECIDING THE ISSUE. THUS THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE ONLY. 5. AS ON THE DATE WHEN THIS TRIBUNAL PASSED ORDERS, NO DOUBT IT WAS JUSTIFIED IN REMITTING THE MATTER AND DIRECTING THE AO TO FOLLOW THE GUIDELINES IN TOPMAN EXPORTS CASE (SUPRA). BUT IT REMAINS AN UNCONTROVERTED FACT THAT THE SAID DECISION HAS BEEN OVERRULED BY THE HON. BOMBAY HIGH COURT IN KALPATARU COLOURS & CHEMI CALS CASE (SUPRA). IN OUR OPINION THERE IS AN ERROR IN THE OR DER OF THE TRIBUNAL, IN THAT POWER OF AO TO CONSIDER THE ISSUE WAS LIMITED TO THE GUIDELINES LAID DOWN BY THE SPECIAL BENCH IN TOPMAN EXPORTS C ASE, WHEREAS IT SHOULD HAVE BEEN PRINCIPLES EVOLVING OUT OF TOPMAN EXPORTS CASE. IT IS THE MANIFEST DUTY OF A JUDICIAL OR QUASI JUDICIA L BODY TO ENSURE THAT ITS ORDERS ARE CLEAR AND SHOULD SUBSERVE THE ULTIM ATE OBJECT OF RENDERING JUSTICE AND IF THE DIRECTIONS GIVEN COULD LEAD TO A RESULT WHEREBY JUDICIAL DISCIPLINE OF THE HIERARCHY OF COU RTS WOULD GET NEGATED, THEN SUCH DIRECTIONS WILL BE SUSCEPTIBLE T O A RECTIFICATORY PROCEEDINGS, THE MISTAKE IN SUCH DIRECTIONS BEING G LARING AND APPARENT. RECTIFICATION OF SUCH A MISTAKE CANNOT BE REFUSED JUST FOR A REASON THAT ONE OF THE PARTIES TO THE DISPUTE HAS M OVED IN FURTHER M.P. NOS. 175 & 176/MDS/10 5 APPEAL. NO DOUBT IT IS TRUE THAT HON'BLE JURISDICT IONAL HIGH COURT HAS ADMITTED THE APPEAL AGAINST THE ORDER OF THIS TRIBU NAL. BUT THIS WOULD NOT BE A REASON TO MODIFY THE DIRECTIONS GIVEN BY T RIBUNAL TO THE A.O. FOR PASSING ORDERS IN ACCORDANCE WITH LAW, SINCE AN ORDER WHEN PASSED IN ACCORDANCE WITH LAW CAN NEVER PREJUDICE T HE ASSESSEE. 6. THEREFORE, FOR MAINTAINING JUDICIAL DISCIPLINE W E FIND IT APPROPRIATE TO MODIFY THE DIRECTIONS GIVEN TO THE A O IN PARA 5 OF THE ORDERS OF THE TRIBUNAL AS UNDER: HENCE IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE AO AND LD. CIT(A) OM THE ASPECT OF SEC.80HHC DE DUCTION, AND REMIT THE ISSUE BACK TO THE FILE OF THE AO FOR DECIDING IT BASED ON THE PRINCIPLES EVOLVING OUT OF TOPMAN EXPO RTS CASE AND THE DECISIONS OF ANY HIGHER JUDICIAL AUTHORITIES, ON THE RELEVANT ISSUE, WHICH ARE AVAILABLE TO THE AO WHEN HE CONSID ERS IT AFRESH. 7. NEEDLESS TO MENTION, ASSESSEE HAS TO BE GIVEN A FAIR CHANCE TO REPRESENT ITS CASE. 8. MISC. PETITIONS FILED BY THE REVENUE ARE DISPOSE D OF WITH THE ABOVE DIRECTIONS. 9. FOR STATISTICAL PURPOSES THE MISC. PETITIONS ARE TREATED AS PARTLY ALLOWED. M.P. NOS. 175 & 176/MDS/10 6 THE ORDER WAS PRONOUNCED IN THE COURT ON 21 ST OCTOBER, 2011. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 21 ST OCTOBER, 2011. KRI. COPY TO: (1) PETITIONER (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE