Assistant Commissioner of Income Tax , Central Circle-1(2), Hyderabad V. Aurobindo Pharma Ltd., Hyderabad

MA 23/Hyd/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5193 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-02-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2002-2003
• Appeal Filed On: 14-04-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 80HHC; 254(2); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD ‘ B ’ BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER (Through Virtual Hearing) M.A. Nos.19, 23 & 24/Hyd/2021 (In ITA Nos.1507, 1509 & 1510/Hyd/2013) (Assessment Years : 1999-2000, 2002-03 & 2004-05) Asst. Commissioner of Income Tax, Central Circle 1(2), Hyderabad. .....Appellant. Vs. M/s. Aurobindo Pharma Ltd., Hyderabad. PAN AABCA 7366H .....Respondent. M.A. No.22/Hyd/2021 (In ITA Nos.1508/Hyd/2013) (Assessment Year : 2001-02) Asst. Commissioner of Income Tax, Central Circle 1(2), Hyderabad. .....Appellant. Vs. M/s. Ranith Pharma Limited, (Now amalgamated with M/s. Aurobindo Pharma Ltd.), Hyderabad. PAN AAACR 9749L .....Respondent. Appellant By : Shri YVST Sai. (CIT-DR) Respondents By : Shri C.P. Ramaswami. Advocate. Date of Hearing : 11.02.2022. Date of Pronouncement : 15.02.2022. O R D E R Per S.S. Godara, J.M.(Oral) : 2 MA Nos.19, 22 to 24/Hyd/2021 These four Revenue’s Miscellaneous Applications are filed u/s. 254(2) of Income Tax Act, 1961 (‘the Act’) seek to recall the tribunal’s common order in main case ITA Nos.1507 to 1510/Hyd/2013 Dt.16.02.2021 accepting the taxpayer’s section 80HHC deduction claim(s) vide following detailed discussion : “ 4. Learned CIT-DR vehemently contended at the outset that both the lower authorities’ action under challenge denying the assessee the alleged double deduction(s) u/s.80HHC and Sec.80I is very much in tune with the tribunal’s first round remand order restoring the issue back to the Assessing Officer to be decided as per Special Bench (supra) and therefore, even if it is held that the legal position has changed, the same deserves to be upheld. We notice in this factual backdrop that the assessees’ instant four appeals are pending since the year 2013. The ‘lead’ appeal ITA No.1507/Hyd/2013 has seen thirty six adjournments in all. Case file(s) notings therein sufficiently indicate that the tribunal had proceeded to await the hon'ble apex court’s decision in ACIT Vs. Micro Labs Ltd. [380 ITR 1] (SC). Hon'ble division bench of the apex court had formed a divergent opinion qua the issue of double deduction which finally culminated in a reference made to a larger bench. Learned co- ordinate bench earlier directions in the case records dt.02-06-2016, 18- 09-2017 and 01-10-2019 made it clear that postponement of hearing in the instant batch of four appeals was warranted to clarify the final status of hon'ble apex court’s trial order only. 5. Learned counsel in this factual backdrop has filed a copy of the status report pertaining to the hon'ble apex court final decision on the issue as it is evident from the official site. Learned CIT-DR fails to dispute that the Revenue’s Special Leave Petition (C) No.031153/12 registered on 08-10- 2012; converted to Civil Appeal No.7427/2012, stands dismissed on 17- 09-2018. Meaning thereby that the corresponding hon'ble high court’s order deciding the issue in assessee’s favour and against the department has attained finality that the twin claims of Section 80HHC and Section 80-IA raised at the former’s behest qua profits of the eligible business undertaking do not amount to double deduction. 6. We next advert to the Revenue’s objections that once this tribunal’s remand directions had made it clear that the issue had to be decided in view of the Special Bench’s decision (supra), we ought not to take note 3 MA Nos.19, 22 to 24/Hyd/2021 of all other intervening legal developments at all. We find no force in the foregoing technical argument. The clinching fact that remains is that on the one hand is tribunal’s remand order directing the Assessing Officer to follow its yet another Special Bench (supra) which itself stands overruled in (2011) 332 ITR 42 (Bom) Associated Capsules (P) Ltd. Vs. DCIT and on the other hand is the judicial verdict directly on the issue coming from the Hon'ble highest court of land. We thus quote Article- 141 of the Constitution of India and hold that judicial discipline requires that all judicial forums must make way for the hon'ble apex court’s decision on the relevant issue. It must therefore be presumed that the issue now stands settled upto hon'ble Supreme Court in assessee’s favour with retrospective effect in other words. We thus accept the assessee’s sole substantive grievance in principle and leave it open for the Assessing Officer to finalise consequential computation as per law. It is made clear that although the assessee has filed its calculation sheet(s) regarding Section 80-IA and Section 80HHC deduction(s) pertaining to the alleged eligible undertakings, this latter component is restored back to the Assessing Officer to arrive at his final conclusion as per law after factual verification of the necessary records.” 2. Learned CIT-DR vehemently contended during the course of hearing that our impugned common order suffers an apparent mistake on record since we have erred in treating the hon’ble apex court decision in case of ACIT Vs. Micro Labs Ltd. (supra) to have been decided on merits whereas the same stood dismissed since involving lower than the prescribed tax limit in light of CBDT Circular Dt.08.08.2019 Mr. Sai sought to highlight the fact that any judicial order dismissing Revenue’s case in light of tax effect circular(s) issued from time to time is never treated as 4 MA Nos.19, 22 to 24/Hyd/2021 having settled the corresponding issue on merits or on legality; as the case may be. 3. Learned CIT-DR next invited our attention to the Revenue’s paper book as well as identical pleadings in the instant miscellaneous application that their lordships are yet to decide the impugned issue of double deduction (supra) in Civil Appeal No.14925/2015 M/s. Arctic India Engg. Pvt. Ltd.; which in turn, stands clubbed with C A No.23423/2011 in case of M/s. Shital Fibers Limited as well as similar other cases as per the list. 4. Learned authorized representative, on the other hand, has strongly contested the Revenue’s foregoing argument on the ground that u/s.254(2) rectification proceedings ought not to be treated as a fresh re-hearing on all issues involved in the main appeal. He has quoted hon’ble apex court’s decisions in CIT Vs. Reliance Telecom Ltd. (2021) 133 taxmann.com 41 (SC) and ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) in assessee's favour. Heard both the parties. Case files perused. 5 MA Nos.19, 22 to 24/Hyd/2021 5. We have given our thoughtful consideration to the foregoing rival contentions and find no merit in the assessee's stand. There is hardly any dispute that our impugned order has decided the section 80HHC deduction issue in assessee's favour and against the department going by the assessee's paper book indicating their lordships to have dismissed the Revenue’s appeal(s) in Micro Labs Limited (supra) on merits. The factual position has turned out to be in opposite direction wherein the issue is yet to be adjudicated by hon’ble apex court on legality as well as on merits; as the case may be. We therefore of the opinion that our common order dt.16.2.2021 suffers from an apparent mistake on record on legal position in light of the above cited facts. The same stands recalled since based on an erroneous assumptions on law and facts. The fact also remains that their lordships are yet to take a final call on the assessee's sole substantive grievance on merits as the entire batch involving many connected cases are pending. We therefore modify our impugned order allowing the assessee's corresponding substantive grounds to the extent 6 MA Nos.19, 22 to 24/Hyd/2021 that it would be treated as allowed for statistical purposes only so as to enable the Assessing Officer to proceed afresh as and when hon’ble apex court decides section 80HHC r.w.s. 80 I issue(s). Suffice to say, learned Assessing Officer has to await for the final decision of hon’ble apex court and thereafter proceed to adjudicate the assessee's case(s) within three effective opportunities of hearing, as per law. Ordered accordingly. 4. These Revenue’s Miscellaneous Application Nos.19, 22, 23 & 24/Hyd/2021 are allowed and assessee's corresponding ITA Nos.1507 to 1510/Hyd/2013 stand modified to have been accepted for statistical purposes in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 15th Feb., 2022. Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) Accountant Member Judicial Member Hyderabad, Dt. 15.02.2022. * Reddy gp 7 MA Nos.19, 22 to 24/Hyd/2021 Copy to : 1. M/s. Aurobindo Pharma Ltd., C/o Dr. C.P. Ramaswami, Advocate, 102 & 303, Gitanjali Apartments, Plot No.108, Srinagar Colony, Hyderabad. ii) M/s. Ranith Pharma Limtied, C/o Dr. C.P. Ramaswami, Advocate, 102 & 303, Gitanjali Apartments, Plot No.108, Srinagar Colony, Hyderabad. 2. ACIT, Central Circle 1(2), Hyderabad / DCIT, Central Circle 1(1), Hyderabad. 3. C I T(A)-1, Hyderabad. 4. CIT(Central), Hyderabad. 5. DR, ITAT, Hyderabad. 6. Guard File. By Order Sr. Pvt. Secretary, ITAT, Hyderabad.