ACIT, Circle-2(1), Cuttack V. M/s. Swapna Motors Pvt. Ltd., Cuttack

MA 41/CTK/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4323 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 6 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 30-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS
• Section: 254(2); 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ AND ARUN KHODPIA, ACCOUNTANT MEMBER (in ITA No Assessment Year ACIT, Circle -2(1), Cuttack PAN/GIR No. (Appellant Per C.M.Garg By way of these miscellaneous restore the appeals passed by the Tribunal on 27.4.2017 No.571/CTK/2013 & ITA No. 2009-10 & 2010 passed following the decision of Hon’ble the case of CIT vs Victor Shipping Services Pvt Ltd., 357 ITR 642 (All), whereas the said decision has been overruled by the IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK S/SHRI CHANDRA MOHAN GARG, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER M.A. Nos.40 & 41/CTK/2017 ITA No.571/CTK/2013 & ITA No.56/CTK/2015) Assessment Years : 2009-10 & 2010 2(1), Vs. M/s. Swapna Motors Pvt Ltd., Saha Shyam Kunj, Friends Colony, Cuttack No.AAFCS 1450 A (Appellant) .. ( Respondent Assessee by : Shri P.R.Mohanty Revenue by : Shri S.C.Mohanty, Addl Date of Hearing : 25 /3/ 20 Date of Pronouncement : 17/ O R D E R g, JM By way of these miscellaneous petitions, the revenue seeks to restore the appeals passed by the Tribunal on 27.4.2017 No.571/CTK/2013 & ITA No.56/CTK/2015 for 10 & 2010-2011 on the ground that the Tribunal has passed following the decision of Hon’ble Allahabad High Court in the case of CIT vs Victor Shipping Services Pvt Ltd., 357 ITR 642 (All), whereas the said decision has been overruled by the Page1 | 9 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER M.A. Nos.40 & 41/CTK/2017 571/CTK/2013 & ITA No.56/CTK/2015) 10 & 2010-2011 M/s. Swapna Motors Pvt Ltd., Saha Shyam Kunj, Friends Colony, Cuttack Respondent) P.R.Mohanty , AR S.C.Mohanty, Addl CIT (DR) / 2022 05/2022 petitions, the revenue seeks to restore the appeals passed by the Tribunal on 27.4.2017 in ITA 56/CTK/2015 for Assessment Years 2011 on the ground that the Tribunal has Allahabad High Court in the case of CIT vs Victor Shipping Services Pvt Ltd., 357 ITR 642 (All), whereas the said decision has been overruled by the Page2 | 9 Hon’ble Supreme Court in the case of Palam Gas Services vs CIT,(2017) 81 taxman.com 43. 2. Ld Sr DR placing reliance on the order of ITAT Cuttack dated 7.8.2019 in M.A. No.36/CTK/2017 for A.Y. 2010-2011 in the case of ITO vs Jyoti Prasad Rout submitted that the issue is covered in favour of the revenue by this order having similar and identical facts and circumstances. Therefore, the order of the Tribunal dated 27.4.2017 may kindly be recalled and appeals may kindly be fixed for fresh hearing. 3. Replying to above, ld A.R. submitted that in view of recent judgment of Hon’ble Supreme Court in the case of CIT vs Reliance Telecom Ltd., 440 ITR 1 (SC), wherein, it has been held that the Tribunal passed a detailed order originally during appellate proceedings holding that payment made by assessee company for purchase of software was in nature or royalty and TDS was to be deducted at the rate of 10% on such payment, said order could not be completely recalled by Tribunal in exercise of powers under section 254(2) of the Act as powers under section 254(2) were only to rectify/correct any mistake apparent from record. Therefore, the miscellaneous petitions filed by the revenue may be dismissed. Ld A.R. also submitted that the SLP filed by the department in the case of Victor Page3 | 9 Shipping Services Pvt Ltd (supra) has been dismissed by Hon’ble Supreme Court. 4. Placing rejoinder, ld Sr DR drew our attention towards judgement of Hon’ble Supreme Court in the case of ACIT vs.Saurashtra Kutch Stock Exchange, 305 ITR 227 (SC) submitted that even in a situation where the judgment of the Hon’ble jurisdictional High Court or Hon’ble Supreme Court is rendered after the decision of the Tribunal, the decision of the Tribunal is not in harmony to the law so laid down by Their Lordships, therefore, the Tribunal has to rectify the order so as to bring it in harmony with the correct legal position. He submitted that in the present case, the Tribunal order 27.4.2017 has been passed by following the judgment of Hon’ble Allahabad High Court in the case of Victor Shipping Services Pvt Ltd (supra) and Hon’ble Supreme Court in the case of Palam Gas Service (supra) held that judgment in the case of Victor Shipping Service Ltd (supra) is not a good law, thus same has been overruled by the Hon’ble Supreme Court, therefore, the order of the Tribunal may kindly be recalled in view of the preposition rendered by Hon’ble Supreme Court in the case of Saurashtra Kutch Stock Exchange,(supra). Page4 | 9 5. On careful consideration of the rival submissions, first of all, we may point out that similar issue raised by the department in M,A.No.36/CTK/2017 decided by the Tribunal on 7.8.2019 and other various orders have been decided in favour of the revenue by recalling the order of the Tribunal. For the sake of completeness, we find it appropriate to reproduce the relevant paras of the Tribunal in the case of Jyoti Prasad Rout (supra), which read as follows: “2. The mistake pointed out by the revenue is that while adjudicating upon the appeal of the assessee for the assessment year 2010-2011, vide dated 12.4.2017, the Tribunal has held that no disallowance u/s.40(a)(ia) of the Act was warranted in the case of the assessee following the decision of Hon’ble Allahabad High Court in the case of CIT vs. Victor Shipping Services (P) ltd., 357 ITR 642 (All). It is now pointed out that the stand so taken by the Tribunal is contrary to the law laid down by the Hon’ble Supreme Court in the case of Palam Gas Service vs CIT, 81 Taxman.Com. 43 (2017). Ld D.R. points out that even though the Hon’ble Supreme Court judgment was rendered after the Tribunal’s order, the Tribunal is duty bound to modify the said order to bring the same in consonance with the Hon’ble Supreme Court judgment in the case of Palam Gas Service (supra). In support of this proposition, Ld D.R. placed reliance on the Hon’ble Supreme Court judgment in the case of ACIT v. Saurashtra Kutch Stock Exchange, 305 ITR 227 (SC), wherein, it was held that even in a situation where the judgement of the Hon’ble Jurisdictional High Court or Hon’ble Supreme Court is rendered after the decision of the Tribunal, the decision of the Tribunal is not in harmony to the law so laid down by Their Lordships, therefore, the Tribunal has to rectify the order so as to bring it in harmony with the correct legal position. It is also submitted that the question of disallowance u/s.40(a)(ia) of the Act was decided against the assessee by the Hon’ble Supreme Court and, therefore, the disallowance u/s.40(a)(ia) of the Act is now settled by the Hon’ble Supreme Court. In view of above, ld D.R. submitted that the order of the Tribunal be recalled and the appeal may be decided in accordance with the decision of Hon’ble Supreme Court in the case of Palam Gas Service (supra). 3. Ld A.R. of the assessee, on the other hand, supported the order of the Tribunal. He submitted that by recalling this order, it will amount to review of its own order of the Tribunal, which is not permissible. Page5 | 9 4. We heard the rival contentions of both the sides and perused the material on record as well as the order of the Tribunal. We see substance in the submission of ld D.R. As has been held by the Hon’ble Supreme Court in the case of Saurashtra Kutch Stock Exchange(supra), if a subsequent decision alters the earlier one, the later decision does not make new law. It only discovers the correct principle of law which has to be applied retrospectively and that even non-consideration of the decision of the Hon’ble Jurisdictional High Court or of the Hon’ble Supreme Court can be said to be a mistake apparent from the record even when the law so laid down by the Hon’ble Jurisdictional High Court of the Hon’ble Supreme Court is on different law than the date of decision. It is thus clear that it makes no difference whether the decision of the Hon’ble Jurisdictional High Court or Hon’ble Supreme Court, on the basis of which, rectification is to be carried on, is rendered prior to the date of the Tribunal’s decision or subsequent to the date of Tribunal’s decision. In view of this, we observe that there is no dispute that the order passed by the Tribunal dated 12.4.2017 is not in harmony with the law laid down by the Hon’ble Supreme Court in the case of Palam Gas Service (supra) on 3.5.2017. Therefore, we deem it fit and proper to uphold the grievance of the revenue and rectify the mistake pointed out in the Tribunal’s order dated 12.4.2017. 5. By order dated 12.4.2017, the Tribunal deleted the addition made by the Assessing Officer u/s.40(a)(ia) of the Act by following the proposition laid down by Hon’ble Allahabad High Court in the case of Victor Shipping (supra), which is against the law laid down by Hon’ble Supreme Court in the case of Palam Gas Service (supra). The Hon’ble Supreme Court in the judgment of Palam Gas Service (supra) has overruled the said judgment of Hon’ble Allahabad High Court. Moreover, as per proposition rendered by Hon’ble Supreme Court in the case of Sourasthra Kutch (supra), as vehemently relied by the ld D.R, in para 42, their Lordships speaking for the Hon’ble Apex Court, held thus: “42. In our judgment, it is also well-settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the Court to pronounce a `new rule’ but to maintain and expound the ‘old one’. In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the Court operated for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not correctly understood.” In the present case also the Tribunal granted relief by following the proposition rendered by Hon’ble Allahabad High Court in the case of Victor Shipping (supra) by order dated 12.4.2017. Subsequently, the Hon’ble Apex Court in the case of Palam Gas Servce (supra) on 3.5.2017 i.e. after Page6 | 9 pronouncement of the said Tribunal order under challenge in this M.A., overruled the said decision of Hon’ble Allahabad High Court in the case of Victor Shipping (supra). As per the proposition rendered by Hon’ble Supreme Court in para 42 of the judgment in the case of Sourasthra Kutch (supra), the decision rendered later on would have retrospective effect clarifying the legal position, which was not currently understood. Thus, due to retrospective operation of the later order of Hon’ble Supreme Court in the case of Palam Gas Service (supra), we are inclined to hold that after the later said decision of the Hon’ble Supreme Court, in the order of the Tribunal dated 12.4.2017 (supra) under challenge, a mistake has been crept on the face of the order. We, therefore, recall the said order of the Tribunal dated 12.4.2017 and direct the Registry to fix the appeal being ITA No.431/CTK/2016 for A.Y. 2020-2011 for a fresh hearing before the regular bench on 10.9.2019. Since next date of hearing in the original appeal has been informed to both the parties after conclusion of hearing of this M.A., notice of hearing is dispensed with. 6. In the result, the miscellaneous application of the revenue is treated is allowed.” 6. Therefore, it is ample clear that by relying the judgment of Hon’ble Supreme Court in the case of Saurashtra Kutch Stock Exchange (supra) the Tribunal taken a view that even if the judgment of Hon’ble Supreme Court in the case of Palam Gas Service (supra) has been rendered subsequently then also the order of the Tribunal, which is not in harmony to the law so laid down by the Hon’ble Supreme Court, the order of the Tribunal has to be recalled for proper and respectful application of law rendered by the Hon’ble Supreme Court. 7. So far as the applicability of recent decision of Hon’ble Supreme Court in the case of Reliance Telcom Ltd (supra) is concerned, we are of the considered view that in this case Their Lordships considered a position Page7 | 9 where the Tribunal revisited its original order and go into details on merits and completely recalled its order by allowing miscellaneous petition u/s.254(2) of the Act and in that situation, Their Lordships categorically held that the powers available to the Tribunal u/s.254(2) of the Act were only to rectify/correct the apparent mistake from record and not beyond that. Their Lordships held that even if the order of the Tribunal is not correct, then also the Tribunal is not empowered to exercise powers u/s.254(2) of the Act to revisit or revise its order. The only remedy to the aggrieved party is to file appeal before the Hon’ble Jurisdictional High Court. 8. On vigilant, careful and respectful perusal of this order of the Hon’ble Supreme Court in the case of Reliance Telecom Ltd (supra), we note that Their Lordships rendered the preposition that the powers of the Tribunal u/s.254(2) of the Act are available only to rectify/correct any mistake apparent from record and not beyond that. At the same time, we respectfully peruse the judgment of Hon’ble Supreme Court in the case of Saurashtra Kutch Stock Exchange (supra), and find that in that case, the Hon’ble Supreme Court rendered the preposition pertaining to a situation that if the Tribunal order is not in harmony to the law so laid down by Their Lordships of Hon’ble High Courts and Hon’ble Supreme Court, then the Tribunal has to rectify the order so as to bring it in harmony with the correct legal position rendered by Hon’ble Supreme Court or Hon’ble High Courts in their orders. It was made clear that even if the judgment of Page8 | 9 Hon’ble Supreme Court and High Courts was not in existence at the time of passing the Tribunal order and the same was rendered after the Tribunal order then also the Tribunal is duty bound to rectify this in harmony with the correct legal position decided by Hon’ble Supreme Court and Hon’ble High Courts. 9. In the present case, the revenue is not seeking to rectify any mistake in the Tribunal order but the sole contention of the revenue is that the judgment of the Tribunal dated 27.4.2017 is not in harmony with the judgment of Hon’ble Supreme Court in the case of Palam Gas Service (supra), therefore, same may kindly be recalled. Therefore, we respectfully hold that the preposition rendered in the case of Reliance Telecom Ltd (supra) is not applicable to the facts and circumstances and prayer of the Revenue in the M.A. but the same comes within the four corners of the preposition rendered by Hon’ble Supreme Court in the case of Saurashtra Kutch (supra). Therefore, respectfully following the same and keeping in view our earlier decision in the case of Jyoti Prasad Rout (supra), we are inclined to hold that after the decision rendered by Hon’ble Supreme Court in the case of Palam Gas Service (supra), in the order of the Tribunal dated 24.7.2017 under challenge, a mistake is crept, therefore, we recall the order dated 24.7.2017 and direct the Registry to fix the appeal being ITA No.571/CTK/2013 for the A.Y.2009-10 for fresh hearing before the regular Bench. Page9 | 9 10. In the result, M.As. are allowed Order pronounced on 17 / 5 /2022. Sd/- sd/- (Arun Khodpia) (Chandra Mohan Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 17 / 05 /2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The appellant: ACIT, Circle -2(1), Cuttack 2. The Respondent. M/s. Swapna Motors Pvt Ltd., Saha Shyam Kunj, Friends Colony, Cuttack 3. The CIT(A)-, Cuttack 4. Pr.CIT-, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//