ASST CIT CIR 2(1), V. BHARAT PETROLEUM CORPOPRATION LTD,

MA 346/MUM/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3065 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 16-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMAND J
• Assessee Lawyers: J D MISTRY
• Keywords: Application of stay; Reasonable cause

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM) , AND B.R.BASKARAN (AM) , . . , MISC.APPLICATI ON NO. 346 /MUM/20 1 4 ARISING OUT OF I.T.A. NO .4777 / MUM/2 0 05 , ( / ASSESSMENT YEAR : 200 1 - 02 ) ASSTT.COMMISSIONR OF INCOME TAX , CIRCLE 2(1), ROOM NO.561, 5 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 / VS. M/S BHARAT PETROLEUM CORPORATI ON LTD., TAXATION SECTION, 3 RD FLOOR, BHARAT BHAVAN - 2, 4 AND 6 CURRIMBHOY ROAD, BALLARD ESTATE, MUMBAI. ( / APP LICANT ) .. ( / RESPONDENT ) ./ ./ PAN/GIRNO.: AAACB2902M / APP LICANT BY : SHRI PREMAND J / RESPONDENT BY : SHRI J D MISTRY / DATE OF HEARING : 2 4.4.2015 / DATE OF PRONOUNCEMENT : 29 . 4. 2015 / O R D E R PER B.R.BASK ARAN, ACCOUNTANT MEMBER : THE REVENUE HAS FILED THIS MISCELLANEOUS APPLICATION SEEKING RECALL OR ORDER DATED 24.3.2008 PASSED BY CO - ORDINATE BENCH OF THE TRIBUNAL DISMISSING THE APPEAL FILED BY THE REVENUE FOR WANT OF A PPROVAL FROM COMMITTEE ON DISPUTE (COD) AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ONGC V/S COLLECTOR OF CENTRAL EXCISE 1992 (SUPPLEMETN - 2) SCC 432. 2. THE LD. DR SUBMITTED THAT THE HONBLE SUPREME COURT , VIDE ITS DECISION RENDERED IN THE MONTH OF FEBRUARY, 2011 IN THE CASE OF ELECTRONICS CORPORATION OF INDIA REPORTED IN 332 ITR 58 (SC) , HAS REPEALED MA NO. 346 / MUM/20 1 4 2 THE PROCESS OF REFERRING THE DISPUTE FOR APPROVAL OF COD . THE LD. DR FURTHER SUBMITTED THAT THE ORDER DISMISSING THE APPEAL OF REVENUE FOR WANT OF COD APPROVAL IS NOT PAS SED UNDER SECTION 254(2) OF THE ACT AND HENCE THE PERIOD OF FOUR YEARS PRESCRIBED FOR RECALLING T HE ORDER U/S 254(2) OF THE ACT IS NOT APPLICABLE TO THE PRESENT PETITION FILED BY THE REVENUE. IN THIS REGARD, HE PLACED R ELIANCE ON THE DECISION RENDERED BY THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V/S AIRPORT AUTHORITY OF INDIA (2013) 154 TTJ (DEL) 191. SINCE THE DEPARTMENTS APPEAL WAS FILED PRIOR TO THE DECISION OF HONBLE SUPREME COURT RENDERED IN THE CASE OF ELECTRONICS CORPORATION OF INDIA LT D (SUPRA), THE LD. DR WAS ASKED TO FIND OUT AS TO WHETHER AN Y APPLICATION WAS FILED WITH COD SEEKING ITS APPROVAL FOR PROSECUTING THE APPEAL FILED IT BEFORE THE TRIBUNAL . T HE LD.DR , UPON CAUSING NECESSARY ENQUIRIES, FAIRLY ADM ITTED THAT THE REVENUE HAS NO T MOVED ANY APPLICATION BEFORE THE COD. 3. THE LD. DR SUBMITTED THAT , AFTER THE REPEAL OF THE PROCEDURE FOR OBTAINING PERMISSION OF COD BY THE HONBLE SUPREME COURT, THE QUESTION OF PRESENCE OR ABSENCE OF COD PERMISSION IS NO LONGER RELEVANT. HE FURTH ER SUBMITTED THAT THE APPEAL FILED BY THE DEPARTMENT WAS NOT A CASE WHERE THE COD HAS NOT ACCORDED ITS PERMISSION, WHICH WOULD DISENTITLE THE REVENUE TO PROSECUTE THE APPEAL. SINCE THE REVENUE HAS NOT MOVED ANY PETITION SEEKING PERMISSION FROM COD AND SIN CE THE PROCEDURE OF SEEKING PERMISSION FROM COD HAS BEEN DONE AWAY WITH, THE APPEAL OF THE DEPARTMENT SHOULD BE CONSIDERED TO BE AN APPEAL THAT IS FILED IN THE PRESENT DAY CIRCUMSTANCES. SINCE THE TRIBUNAL HAS DISMISSED THE APPEAL FOR WANT OF COD PERMISSI ON AND SINCE THE SAID PERMISSION WAS NO LONGER REQUIRED, THE ORDER PASSED BY THE TRIBUNAL BECOMES ERRONEOUS. ACCORDINGLY HE PRAYED THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL SHOULD BE RECALLED. MA NO. 346 / MUM/20 1 4 3 4. THE LD. DR SUBMITTED THAT THE DEPARTMENT HAS FILED T HIS M ISCELLANEOUS APPLICATION ONLY ON 16 - 07 - 2014, I.E., AFTER EXPIRY OF ABOUT 3 - 1/2 YEARS AFTER THE DATE OF ORDER OF HONBLE SUPREME COURT PASSED IN THE CASE OF ELECTRONICS CORPORATION OF INDIA (SUPRA). IN THIS REGARD HE SUBMITTED THAT THE DEPARTMENT IS R EQUIRED TO FOLLOW CERTAIN ADMINISTRATIVE PROCEDURE S PRESCRIBED IN THIS REGARD AND THE SAME HAS CAUSED THE DELAY . THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE S APPEAL WAS ALSO DISMISSED FOR WANT OF COD PERMISSION. SUBSEQUENTLY, THE ASSESSEE ALSO MOVE D A MISCELLANEOUS APPLICATION SEEKING RECALL OF THE TRIBUNAL ORDER, BY WHICH APPEAL OF THE ASSESSEE WAS DISMISSED. BY THE TIME THE ASSESSEE FILED MA , THE COD HAD GRANTED APPROVAL FOR PROSECUTING ONLY TWO ISSUES CONTESTED BY THE ASSESSEE. HOWEVER, THE CO - OR DINATE BENCH OF THE TRIBUNAL WHICH HEARD THE MA FILED BY THE ASSESSEE HAS RECALLED THE ITS EARLIER ORDER , VIDE ORDER DATED 20.3.2013 PASSED IN MA NO.515/MUM/2012 , AND THE TRIBUNAL DID NOT STATE THAT ONLY TWO ISSUES THAT WERE PERMITTED BY THE COD SHOULD BE PROSECUTED, I.E., THE CO - ORDINATE BENCH HAS ALLOWED THE ASSESSEE TO PROSECUTE ALL THE ISSUES CONTESTED IN THE APPEAL OF THE ASSESSEE. THE LD. DR SUBMITTED THAT THE APPEAL FILED BY THE REVENUE IS ALSO ARISING OUT OF THE VERY SAME ORDER PASSED BY T HE LD. CI T(A) AND S INCE THE TRIBUNAL HAS ALLOWED THE ASSESSEE TO CONSIDER ALL THE ISSUES BY DISREGARDING THE PERMISSION GIVEN BY COD , IN THE INTEREST OF EQUITY, THE ORDER PASSED IN THE HANDS OF THE REVENUE ALSO SHOULD BE RECALLED FOR CONSIDER ING ALL THE ISSUES CONT ESTED BY THE REVENUE . 5. THE LD . D.R FURTHER SUBMITTED THAT THE TRIBUNAL MAY DECLINE TO RECALL ITS ORDER, IF THE COD PERMISSION WAS REJECTED. HOWEVER, S INCE THE REVENUE HAS NOT FILED ANY APPLICATION BEFORE COD SEEKING PERMISSION , IT CANNOT BE CONSID ERED TO BE A CASE OF REJECTION OF COD . ACCORDINGLY HE PRAYED THAT THE IMPUGNED ORDER OF THE TRIBUNAL SHOULD BE RECALLED. MA NO. 346 / MUM/20 1 4 4 6. THE LD . A.R STRONGLY OPPOSED THE PLEA PUT FORTH BY THE LD D.R. HE SUBMITTED THAT THE PRESENT APPLICATION HAS BEEN FILED BY THE RE VENUE AFTER THE EXPIRY OF FOUR YEARS FROM THE DATE OF ORDER PASSED BY THE TRIBUNAL. FURTHER THERE WAS AN INORDINATE DELAY OF ABOUT 3 YEARS AND 6 MONTHS IN FILING THE PRESENT MISCELLANEOUS APPLICATION, IF THE DATE OF THE ORDER OF THE HONBLE SUPREME COURT PASSED IN THE CASE OF ELECTRONICS CORPORATION OF INDIA LTD IS RECKONED WITH. THE LD A.R INVITED OUR ATTENTION TO THE ORDER DATED 05 - 07 - 2013 PASSED BY THE CO - ORDINATE BENCH OF MUMBAI TRIBUNAL IN THE CASE OF M/S CENTRAL BANK OF INDIA IN M.A. NO.736/M/2012. IN THE SAID ORDER, THE TRIBUNAL REJECTED THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE ON THE GROUND THAT (A) THE APPLICATION WAS FILED AFTER EXPIRY OF FOUR YEARS FROM THE DATE OF ORDER PASSED BY THE TRIBUNAL AND (B) THERE WAS DELAY OF ABOUT ONE AND HALF YEARS FROM THE DATE OF ORDER PASSED BY THE HONBLE SUPREME COURT AND THE REVENUE HAS NOT SHOWN ANY REASONABLE CAUSE FOR THE SAID DELAY. 7. THE LD A.R SUBMITTED THAT CHALLENGED THE ABOVE SAID ORDER PASSED BY THE TRIBUNAL IN THE CASE OF CENTRAL B ANK OF INDIA, BY FILING A WRIT PETITION BEFORE THE HONBLE HIGH COURT OF BOMBAY. BEFORE THE HONBLE HIGH COURT, THE REVENUE ADMITTED THAT IT HAS NOT MADE ANY APPLICATION TO OBTAIN APPROVAL OF THE COD BEFORE FILING THE APPEAL TO THE TRIBUNAL. THE HONBLE HIGH COURT, VIDE ITS ORDER DATED 23 - 07 - 2014 PASSED IN WRIT PETITION NO.11580 OF 2013, HELD THAT THE NECESSITY OF OBTAINING APPROVAL FROM COD, WHICH WAS IN PRACTICE AT THE RELEVANT POINT OF TIME CANNOT BE DONE AWAY WITH ON THE GROUND THAT THE SUPREME COURT HAS NOW HELD THAT THE PRACTICE NEEDS TO BE DISCONTINUED. THE LD A.R SUBMITTED THAT, IN THE PRESENT CASE ALSO, THE REVENUE HAS ADMITTED THAT IT HAS NOT MOVED ANY APPLICATION BEFORE COD SEEKING ITS PERMISSION. ACCORDINGLY HE SUBMITTED THAT THE DECISION OF JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CENTRAL BANK OF INDIA (REFERRED SUPRA) SQUARELY APPLIES TO THE FACTS OF THE INSTANT CASE MA NO. 346 / MUM/20 1 4 5 ALSO. ACCORDINGLY HE CONTENDED THAT THE MISCELLANEOUS PETITION FILED BY THE REVENUE SHOULD BE DISMISSED. 8. WE H EARD THE PARTIES AND PERUSED THE RECORD. THE ORDER REJECTING THE APPEAL FILED BY THE ASSESSEE FOR WANT OF COD PERMISSION WAS PASSED BY THE TRIBUNAL ON 24 - 03 - 2008. THE PRESENT MISCELLANEOUS APPLICATION WAS FILED BY THE REVENUE ON 16.7.2014. THUS THE PRES ENT APPLICATION HAS BEEN FILED AFTER EXPIRY OF FOUR YEARS FROM THE DATE OF ORDER OF THE TRIBUNAL. THE LD A.R HAS POINTED OUT THAT THERE WAS A DELAY OF ABOUT THREE AND HALF YEARS FROM THE DATE OF THE ORDER OF HONBLE SUPREME COURT PASSED IN THE CASE OF ELE CTRONICS CORPORATION OF INDIA LTD (SUPRA). ADMITTEDLY, THE REVENUE DID NOT SHOW ANY REASONABLE CAUSE FOR THE DELAY OF THREE AND HALF YEARS CAUSED IN FILING THE PRESENT APPLICATION. FURTHER, IT IS AN ADMITTED FACT THAT THE REVENUE HAS NOT MOVED ANY APPLIC ATION BEFORE COD SEEKING ITS PERMISSION FOR PROSECUTING THE APPEAL. WE HAVE ALREADY NOTICED THAT THE HONBLE BOMBAY HIGH COURT, UNDER IDENTICAL CIRCUMSTANCES, HAS CONSIDERED THE ISSUE OF RECALLING OF THE ORDER IN THE CASE OF CENTRAL BANK OF INDIA (REFERRE D ABOVE). FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE FOLLOWING OBSERVATIONS MADE BY THE HIGH COURT: - 6. MR.SURESH KUMAR LEARNED COUNSEL APPEARING FOR THE REVENUE ON INSTRUCTIONS STATES THAT THE REVENUE HAD NOT MADE ANY APPLICATION TO OBTAIN APPROV AL OF THE COD BEFORE IT FILED ITS APPEAL FOR AY - 1996 - 98 TO THE TRIBUNAL. THIS INSPITE OF THE COD MECHANISM BEING VERY MUCH IN FORCE AT THAT TIME. THE RECALL OF ITS EARLIER ORDERS IN RESPECT OF ONGC BY THE SUPREME COURT IN THE CASE OF ELECTRONICS CORPORTION OF INDIA LTD ONLY DOES AWAY WITH THE PRACTICE IN VIEW OF THE CHANGED CIRCUMSTANCES. THE NECESSITY OF OBTAINING APPROVAL FROM COD WHICH WAS IN PRACTICE AT THE RELEVANT TIME CANNOT BE DONE AWAY WITH ON THE GROUND THAT THE SUPREME COURT HAS NOW HELD THAT THE PRACTICE NEEDS TO BE DISCONTINUED. 7. IN THE ABOVE FACTS AND CIRCUMSTANCES, WE SE E NO REASON TO EN TERTA IN THE PRESENT PETITION. ACCORDINGLY, WRIT PETITION IS DISMISSED WITH NO ORDER AS TO COSTS. MA NO. 346 / MUM/20 1 4 6 9. IMMEDIATELY AFTER CONCLUSION OF HEARING, THE LD. DR F ILED A WRITTEN SUBMISSION, WHEREIN HE HAD PLACED RELIANCE ON THE DECISION DATED 23.7.2013 PASSED BY HONBLE CALCUTTA HIGH COURT IN THE CASE OF CHITTARANJAN LOCOMOTIVE WORKS V/S UNION OF INDIA (W.P.NO.158 OF 2013). IN THE ABOVE SAID CASE, THE ASSESSEE THE REIN FILED AN APPEAL BEFORE CUSTOM S , EXCISE AND SERVICE TAX TRIBUNAL ON 17.02.2011. ON THE VERY SAME DAY, THE HONBLE SUPREME COURT HAD PASSED ITS ORDER IN THE CASE OF ELECTRONICS CORPORATION OF INDIA LTD (SUPRA). HOWEVER , THE CENTRAL EXCISE AND SERVIC E TAX TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE FOR WANT OF CLEARANCE FROM COD. HOWEVER, THE HONBLE CALCUTTA HIGH COURT SET ASIDE THE ORDER OF TRIBUNAL WITH THE FOLLOWING OBSERVATIONS: THE ORDERS OF THE HON'BLE SUPREME COURT WHICH REQUIRED COD CLEA RANCE HAVING BEEN RECALLED, THE LEARNED TRIBUNAL PATENTLY ERRED IN DISMISSING THE SAID APPLICATION AND THE APPEAL ON THE PURPORTED GROUND THAT SAIL HAD NOT PRODUCED EVIDENCE OF HAVING APPLIED FOR CLEARANCE FROM THE COD OR ON THE GROUND THAT SAIL HAD NOT PR ODUCED ANY CLEARANCE FROM THE COD. AS HELD BY THE SUPREME COURT IN THE CASE OF M.A.MURTHY VS. STATE OF KARNATAKA, REPORTED IN (2003) 7 SCC 517 A DECISION OF T HE SUPREME COURT ENUNCIATING A PRINCIPLE OF L AW IS APPLICABLE TO ALL CASES, IRRESPECTIVE OF STAGE OF PENDENCY THEREOF BECAUSE IT IS ASSUMED THAT WHAT IS ENUNCIATED BY THE SUPREME COURT IS, IN FACT, THE LAW FROM THE INCEPTION UNLESS, OF COURSE, THE SUPREME COURT EXPRESSLY INDICATES THAT THE DECISION W OULD HAVE PROSPECTIVE EFFECT. MAY BE, AS CONTENDED BY MR. MAITY, THE APPEAL WAS FILED BEFORE 17TH FEBRUARY, 2011 WHEN THE CONSTITUTION BENCH JUDGMENT OF THE SUPREME COURT RECALLING THE EARLIER ORDERS WAS PRONOUNCED. THE ORDERS WHEREBY CLEARANCE WAS REQUIRE D HAVING BEEN RECALLED, THE APPEAL AND THE STAY APPLICATION COULD NOT HAVE BEEN DISMISSED ON THE GROUND OF WANT OF CLEARANCE OR WANT OF AN APPLICATION FOR CLEARANCE.' IN VIEW OF THE LAW ENUNCIATED IN THE ABOVE JUDGMENT, THE STAND OF THE TRIBUNAL THAT THE APPLICATION IS NOT MAINTAINABLE BECAUSE OF NON - PRODUCTION OF CLEARANCE FROM COD. IS NOT SUSTAINABLE. ACCORDINGLY THE IMPUGNED ORDER IS HEREBY SET ASIDE. MA NO. 346 / MUM/20 1 4 7 ACCORDINGLY, IT WAS PRAYED THAT THE MISCELLANEOUS APPLICATION SHOULD BE ALLOWED. 10. HOWEVER, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE IN VIEW OF THE ORDER PASSED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CENTRAL BANK OF INDIA (SUPRA). HENCE, WE DO NOT FIND IT NECESSARY TO SEEK THE VIEWS OF ASSESSEE ON THE WRITTEN SUBMISSION F ILED BY THE LD.DR. SINCE THE FACTS PREVAILING IN THE INSTANT CASE ARE IDENTICAL, BY FOLLOWING THE BINDING DECISION OF THE JURISDICTIONAL HIGH COURT, WE REJECT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. 1 1 . IN THE RESULT, ALL THE MISCELLANEOUS APPLICATIO N FILED BY THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29TH APRIL,2015 . 29TH APRIL, SD SD ( / JOGINDER SINGH ) ( . . , / B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 29TH APRIL ,201 5 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCE RNED 4. / CIT CONCERNED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI