The ADIT(Intn.Taxn.), Ahmedabad V. The Niko Resources Ltd., Baroda

MA 268/AHD/2009

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3114 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 11-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUM
• Assessee Lawyers: S N SOPARKAR
• Keywords: Retrospective amendment
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI N.S. SAINI , ACCOUNTANT MEMBER AND SHR I RAJPAL YADAV , JUDICIAL MEMBER ASSISTANT DIRECTOR OF INCOME - TAX (INTERNATIONAL - TAXATION), 4 TH FLOOR, NATURE VIEW BLDG, ASHRAM ROAD , AHMEDABAD (APPELLANT) VS NIKO RESOURCES LTD, 4 TH FLOOR, LAND MARK RACE COU RSE CIRCLE, BARODA (RESPONDENT) ASSISTANT DIRECTOR OF INCOME - TAX (INTERNATIONAL - TAXATION), 4 TH FLOOR, NATURE VIEW BLDG, ASHRAM ROAD, AHMEDA BAD (APPELLANT) VS NIKO RESOURCES LTD, 4 TH FLOOR, LAND MARK RACE COURSE CIRCLE, BARODA (RESPONDENT) M.A. NO . 397/AHD/2009 (IN I T A NO . 95 / A HD/20 07 ) A SSESSMENT YEAR 2000 - 01 M.A. NO . 396 /AHD/2009 (IN ITA NO. 661 /AHD/20 05 ) A SSESSMENT YEAR 200 1 - 02 M.A. NO . 399 /AHD/2009 (IN M A NO. 86 /AHD/20 08 ) (IN ITA NO. 96/AHD/2007) A SSESSMENT YEAR 2002 - 03 MA NOS 268, 395,396,397,39 8,399 & 400/AHD/2009 PAGE NO AD IT VS. NIKO RESOURCES LTD 2 ASSISTANT DIRECTOR OF INCOME - TAX (INTERNATIONAL - TAXATION), 4 TH FLOOR, NATURE VIEW BLDG, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS NIKO RESOURCES LTD, 4 TH FLOOR, LAND MARK RACE COURSE CIRCLE, BARODA (RESPONDENT) ASSISTANT DIRECTOR OF INCOME - TAX (INTERNATIONAL - TAXATION), 4 TH FLOOR, NATURE VIEW BLDG, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS NIKO RESOURCES LTD, 4 TH FLOOR, LAND MARK RACE COURSE CIRCLE, BARODA (RESPONDENT) ASSISTANT DIRECTOR OF INCOME - TAX (INTERNATIONAL - TAXATION), 4 TH FLOOR, N ATURE VIEW BLDG, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS NIKO RESOURCES LTD, 4 TH FLOOR, LAND MARK RACE COURSE CIRCLE, BARODA (RESPONDENT) M.A. NO . 268 /AHD/2009 (IN M A NO. 86 /AHD/20 08 ) (IN ITA NO. 96/AHD/2008) A SSESSMENT YEAR 2002 - 03 M.A. NO . 400 /AHD/2009 (IN ITA NO. 97 /AHD/20 07) A SSESSMENT YEAR 2003 - 04 M.A. NO . 398 /AHD/2009 (IN ITA NO. 3690 /AHD/20 07) A SSESSMENT YEAR 20 04 - 05 MA NOS 268, 395,396,397,39 8,399 & 400/AHD/2009 PAGE NO AD IT VS. NIKO RESOURCES LTD 3 ASSISTANT DIRECTOR OF INCOME - TAX (INTERNATIONAL - TAXATION), 4 TH FLOOR, NATURE VIEW BLDG, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS NIKO RESOURCES LTD, 4 TH FLOOR, LAND MARK RACE COURSE CIRCLE, BARODA (RESPONDENT) REVENUE BY: S MT. SONIA KUM AR , SR. D.R. ASSESSEE BY: S H RI S.N. SOPARKAR , A.R. DATE OF HEARING : 19 - 06 - 2 015 DATE OF PRONOUNCEMENT : 24 - 06 - 2 015 / ORDER P ER : RAJPAL YADAV , JUDICIAL MEMBER : - FIRST WE TAKE ALL MAS EXCEPT MA NO. 268/AHD/2009. THE FACTS ARE COMMON IN ALL THESE MISCELLANEOUS APPLICATIONS , THEREFORE, FOR THE FACILITY OF REFERENCE, WE ARE MAINLY TAKING FROM ASSESSMENT YEAR 2000 - 01. THEY ARE , THAT ASSESSEE - COMPANY ENTERED INTO AN AGREEMENT ON 23 RD SEPTEMBER, 1994 JOINTLY WITH GUJARAT STATE PETROLEUM CORPORATION LTD. (GSPCL) , A COMPANY INCORPORATED UNDER THE LAWS OF INDIA, INTO PRODUCTION SHARING CONTRACT WITH THE GOVT OF INDIA FO R EXPLORATION AND EXTRACTION OF MINERAL OIL AND NATURAL GAS IN HAZIRA FIELD W ITH 33% PARTICIPATING INTEREST . THE ASSESSEE COMPANY STARTED COMMERCIAL PRODUCTION IN HAZIRA ON 6 TH OF SEPTEMBER, 1995. IT CLAIMED DEDUCTION U/S. 80IB(9) OF THE ACT BY CLAIMING WELL OR CLUSTER OF WELLS AS SEPARATE UNDERTAKING, WHICH COMMENCES COMMERCIAL PRODUCTION AT DIFFERENT POINTS OF TIME. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE COMPANY BY HOLDING AMONG OTHER MA NOS 268, 395,396,397,39 8,399 & 400/AHD/2009 PAGE NO AD IT VS. NIKO RESOURCES LTD 4 THINGS THAT WELL OR CLUSTER OF WELL DOES NOT CON STITUTE AN UNDERTAKING, THUS, IS NOT EL IGIBLE FOR DEDUCTION U/S. 80IB(9) OF THE ACT. THE ITAT HAS ALLOWED THE CLAIM OF THE ASSESSEE - COMPANY HOLDING THAT A WELL OR A CLUSTER OF WELLS AS CLAIMED BY THE ASSESSEE COMPANY CONSTITUTES AN UNDERTAKING . V IDE FINA N CE ACT, 2009, SECTION 80IB(9 ) WAS AMENDED WITH RETROSPECTIVE EFFECT FROM 01 - 04 - 2002 WHICH PROVIDES THAT A DEDUCTION SHALL BE AVAILABLE TO AN UNDERTAKING ENGAGED IN COMMERCIAL PRODUCTION OF MINERAL OIL WHICH HAS BEGU N OR BEGINS COMMERCIAL PRODUCTION ON OR A FTER 01 - 04 - 1997. FURTHER EXPLANATION TO SUB SECTION 9 OF SECTION 80IB OF THE A CT LAYS DOWN THAT ALL BLOCKS LICENSED UNDER A SINGLE CONTRACT SHALL BE TREATED AS A SINGLE UNDERTAKING. 2. ON THE STRENGTH OF HON BLE SUPREME COURT DECISION IN THE CASE OF M.K. VANKATCHALLAYA ITO VS. BOMBAY DYING MANUFACTURING COMPANY LTD REPORT ED IN 39 ITR 143, IT IS PLEAD ED BY THE REVENUE THAT IN VIEW OF RETROSPECTIVE AMENDMENT IN SECTION 80IB(9), T HE TRIBUNAL S ORDER SUFFERS WITH A PATENT ERROR BECAUSE IT IS TO BE ASSUMED TH AT THE AMENDED PROVISION WAS AVAILABLE AT THE TIME WHEN TRI BUNAL DECIDED THE CONTROVERSY AND IF AMENDED PROVISION IS TAKEN INTO CONSIDERATION , THEN , THE CONCLUSION ARRIVED AT BY THE TRIBUNAL WOULD HAVE NEVER BEEN ARRIVED. THUS , IT IS A PATENT ERROR. 3 . L EARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT THIS RETROSPECTIVE AMENDMENT WAS SPECIFICALLY BEEN CHALLENGED BY WAY OF WRIT PETITION BY THE ASSESSEE IN THE HON BLE HIGH COURT. THE HON BLE HIGH COURT HAS DECIDED THE WRIT PETITION IN FAVOUR OF THE ASSESSEE AND HELD THAT THIS RETROSPECTIVE AMENDMENT IS VIOLATIVE OF ARTICLE 14 OF THE CONSTITUTION OF MA NOS 268, 395,396,397,39 8,399 & 400/AHD/2009 PAGE NO AD IT VS. NIKO RESOURCES LTD 5 INDIA AND NOT VALID. HE PLACED ON RECORD THE COPY OF THE JUDGMENT OF HON BLE HIGH COURT REPORTED IN 374 ITR 369. 4. ON DUE CONSIDERATION OF FACT S AND CIRCUMSTANCES , WE ARE OF THE VIEW THAT POWER OF RECTIFICATION U/S. 254(2) OF THE INCOME TAX ACT, 1961, CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS S OUGHT TO BE RECTIFIED IS A N OBVIOUS AND PATENT WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE WHICH REQUIRES TO BE ESTABLISHED BY ARG UMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. THE APPARENT MISTAKE PLEADED BY THE REVENUE IS BASED ON THE RETROSPECTIVE AMENDMENT CARRIED OUT IN SECTION 80IB(9 ) . THIS AMENDMENT HAS BEEN QUASHED BY THE HON BLE JURISDIC TIONAL HIGH COURT IN ASSESSEE S OWN CASE. THEREFORE, THE REVENUE CANNOT TAKE ANY BENEFIT OF THIS AMENDMENT. IF IT IS EXCLUDED FROM THE PLEADINGS OF REVENUE S MISCELLANEOUS APPLICATIONS , THEN , NO A PPARENT ERROR REMAINS , THEREFORE , ALL THESE MA S ARE REJECTED. NOW WE TAKE UP MA NO. 268/AHD/2009 5. IN THIS MISCELLANEOUS APPLICATION, IT IS PLEADED BY THE REVENUE THAT ASSESSEE HAS FILED ITS RETURN OF INCOME ON 31 - 10 - 2002. THE ASSESSEE DID NOT CLAIM DEDUCTION U/S. 80IB(9) . F OR GRANT OF THIS DEDUCTION , A PRAYER WAS MADE DURING THE ASSESSMENT PROCEEDING ON 7 TH JANUARY, 2005. IT WAS PLEADED , THAT ASSESSEE IS ENTITLED FOR DEDUCTION U/S. 80IB (9) IN RESPECT OF UNDERTAKING H2 AND H3. THE ASSESSING OFFICE R DECLINED THE PRAYER OF THE ASSESSEE AND APPEAL TO THE COMMISSIONER OF INCOME TAX (APPEALS) DID NOT BRING ANY RELIEF. HOWEVER, THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE. THE TRIBUNAL HAS FOLLOWED ITS FINDING IN ASSESSMENT YEAR 2004 - 05 RENDERED I N ITA NO . 3523/AHD/2007. THE TRIBUNAL HAS ALSO CONSIDERED MA NOS 268, 395,396,397,39 8,399 & 400/AHD/2009 PAGE NO AD IT VS. NIKO RESOURCES LTD 6 THIS ISSUE IN ASSESSMENT YEAR 2003 - 04 AND ALLOWED THE DEDUCTION. THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE TRIBUNAL S ORDER OBSERVED THAT SINCE ASSESSEE HAD NOT CLAIMED A DEDUCTION , THEREFO RE , IT CANNOT BE GIVEN. THE ASSESSING OFFICER HAS RELIED UPON THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) INDIA LTD. VS. CIT 284 ITR 323. AGAINST HIS VIEW OF THE ASSESSING OFFICER, ASSESSEE TOOK THE MATTER IN THE H ON BLE HIGH COUR T BY WAY OF A WRIT PETI TI ON BEARING NO. 2955 OF 2009. HON BLE HIGH COURT HAS DIRECTED THE ASSESSING OFFICER VIDE JUDGMENT DATED 16 TH JUNE, 2009 TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL. ACCORDING TO THE H ON BLE HIGH COURT, ASSESSING OFFICER CANNOT SI T ON THE ORDER OF TRIBUNAL AS IF HE WAS SITTING ON AN APPEAL OVER THE ORDER . 6. IN THIS MISCELLANEOUS APPLICATION, REVENUE HAS PLEADED THAT THOUGH ORDER OF THE TRIBUNAL DATED 1 ST OF AUGUST, 2008 PASSED IN ITA NO. 96 HAS BEEN CHALLENGED IN APPEAL BEFORE THE HON BLE HIGH COURT BUT TRIBUNAL HAS COMMITTED AN APPARENT ERROR BY ENTERTAINING THE ALLEGED ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE. THE EMPHASIS OF THE REVENUE IS THAT IF DEDUCTION WAS NOT CLAIMED BY THE ASSESSEE IN INCOME TAX RETURN , THEN , IT CA NNOT BE CLAIMED BY WAY OF A LETTER AND THIS PLEA OUGHT NOT HAVE BEEN ENTERTAINED BY THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE , ON THE OTHER HAND, CONTENDED THAT THIS RESTRICTION HAS BEEN POINTED OUT UPON THE ASSESSING OFFICER , THE APPELLATE AUTHO RITY CAN ENTERTAIN THE CLAIM. HE PUT RELIANCE UPON THE ORDER OF ITAT PASSED IN THE CASE OF SNC LAVALIN/ACRESINK VS. ACIT 15 SOT PAGE 1 (DELHI) , SHICAGO PENEUMATIC INDIA LTD VS. DCIT 15 SOT 252 (BOMBAY). ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES , WE DO NOT FIND ANY APPARENT ERROR IN THE ORDER OF THE TRIBUNAL BECAUSE IT IS QUITE A DEBATABLE ISSUE , WHETHER CLAIM OF THE ASSESSEE COULD BE ENT ERTAINED BY THE TRIBUNAL OR NOT? THE REVENUE HAS MA NOS 268, 395,396,397,39 8,399 & 400/AHD/2009 PAGE NO AD IT VS. NIKO RESOURCES LTD 7 ALREADY CHALLENGED THE ORDER OF THE TRIBUNAL IN THE APPEAL B EFORE THE HIGH COURT. WE WERE INFORMED THAT APPEALS ARE PENDING FOR DECISION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN THIS APPLICATION. IT IS DISMISSED. 7. IN THE RESULT, ALL THE MISCELLANEOUS APPLICATIONS ARE DISMISSED. ORD ER PR ONOUNCED IN THE OPEN COURT ON 24 - 06 - 2015 SD/ - SD/ - ( N.S. SAINI ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 24 /06 /2015 AK / CO PY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. . BY ORDER/ , / ,