DCIT 1(3), V. GENERAL INSURANCE CORPORATION OF INDIA,

MA 429/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0051 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Keywords: Rectification of order; Advance ruling; Revised return
• Section: 115JB

Judgement Text

MA NO.429 OF 2012 G.I.C. OF INDIA LTD MUMBAI PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI VIVEK VARMA, JUDICIAL MEMBER M.A. NO.429/MUM/2012 (ARISING OUT OF ITA NO. 3554/MUM/2009) (ASSESSMENT YEAR: 2007-08) DCIT 1(3) ROOM NO.540 AAYAKAR BHAVAN MK MARG, MUMBAI 400020 VS. GENERAL INSURANCE CORPORATION OF INDIA, SURAKSHA, 170 J. TATA ROAD, CHURCHGATE, MUMBAI 400020 PAN: AAACG 0615 N (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI O.P. MEENA, DR ASSESSEE BY: SHRI FARROKH V. IRANI DATE OF HEARING: 15/03/2013 DATE OF PRONOUNCEMENT: 15/03/2013 O R D E R PER B. RAMAKOTAIAH, A.M. THIS MISCELLANEOUS APPLICATION IS PREFERRED BY THE DCIT 1(3), MUMBAI CONTENDING THAT THERE ARE CERTAIN FACTS WHI CH HAVE BEEN OVERLOOKED THEREBY CALLING FOR RECTIFICATION. THERE AFTER AO STATED THE FACTS AND ULTIMATELY MAKES A PLEA AS UNDER TO PASS NECESSARY RECTIFICATION ORDER: 1. THE HON'BLE ITAT HAS ERRED IN HOLDING THAT THE PROVISIONS OF MINIMUM ALTERNATE TAX AS PER SECTION 115JB OF THE I.T. ACT, 1961 ARE NOT APPLICABLE TO T HE CASE OF ASSESSEE INSPITE OF THE JUDGMENT OF NIKO RESOURC ES LTD VS. CIT (BY AUTHORITY FOR ADVANCE RULINGS, NEW DELHI) REPORTED IN 234 ITR 528 AND DRESDNER BANK AG (108 ITD 375), ITAT MUMBAI. 2. THE PROVISIONS OF SECTION 115JB OVERRIDES THE PROVISIONS OF SECTION 44 AS THE PROVISIONS OF SECTI ON 115JA AND 115JB WERE INTRODUCED MUCH LATER IN THE INCOME TAX ACT. 3. THE ITAT HAS NOT APPRECIATED THE FACT THAT THOUG H THE BANKING COMPANIES OR INSURANCE COMPANIES IS NOT REQUIRED TO PREPARE ACCOUNTS AS PER COMPANY ACT AND HENCE, EXEMPT FROM PREPARATION OF ACCOUNTS AS PER MA NO.429 OF 2012 G.I.C. OF INDIA LTD MUMBAI PAGE 2 OF 5 SCHEDULV VI OF COMPANYS ACT, STILL IT IS BOUND TO PREPARE PROFIT & LOSS A/C AS PER PROVISIONS OF SECTION 115J B AS APPLICABLE FOR CALCULATION OF TAX PAYABLE IN ITS CA SE. 2. WE HAVE HEARD THE LEARNED DR AND THE LEARNED COUNSE L. AFTER CONSIDERING THE RIVAL ARGUMENTS, WE ARE OF THE OPIN ION THAT THE MA PREFERRED BY THE REVENUE IS MISCONCEIVED. THE ITAT DID NOT ADJUDICATE THE ISSUE OF SECTION 115JB AT ALL AS THE ISSUE WAS ALREADY DECIDED BY THE CIT (A) AND THE REVENUE HAS NOT COME IN APPEAL. THE ENTIRE ORDER OF THE ITAT ON THE ISSUE IS REPRODUCED FOR THE SAKE OF CONVENIENCE. ISSUE NO.7 NON-APPLICABILITY OF PROVISIONS OF SECTION 115JB I.E. MAT (MODIFIED GROUND OF APPEAL NO.4 ORIGINAL GROUND OF APPEAL NO.4). THE ASSESSEE HAD O FFERED INCOME UNDER SECTION 115JB BOOK PROFIT IN THE ORIGI NAL RETURN AND SUBSEQUENTLY IN REVISED RETURN. BEFORE T HE CIT (A) IT RAISED AN ADDITIONAL GROUND WHERE IT WAS CON TENDED THAT PROVISIONS OF SECTION 115JB ARE NOT APPLICABLE TO THE ASSESSEE. AS THIS GROUND GOES TO THE ROOT OF TAXABI LITY OF BOOK PROFIT UNDER SECTION 115JB, THE SAME WAS ADMIT TED BY THE CIT (A) AND ADJUDICATED AS UNDER: 15.2 IN THE COURSE OF APPELLATE PROCEEDINGS, IT HAS BEEN INFORMED THAT THE ACCOUNTS OF APPELLANT ARE PREPARED IN ACCORDANCE WITH THE INSURANCE ACT AND NOT IN ACCORDANCE WITH SCHEDULE VI OF THE COMPANIES ACT. IN PARTICULAR MY ATTENTION HAS BEEN DRAWN TO THE PROVISIONS OF SECTION 211 OF THE COMPANIES ACT WHICH DEALS WITH THE FORM AND CONTENTS OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. IT HAS BEEN ARGUED THAT THE PROVISO TO SUB-SECTION1 CATEGORICALLY SPECIFIES THAT THE PROVISIONS SHALL NOT BE APPLICABLE FOR AN INSURANCE OR BANKING COMPANY. SIMILARLY IT HAS BEEN ARGUED THAT THE PROVISO TO SUB-SECTION 2 OF THIS SECTION RELATING TO THE PROFIT AND LOSS ACCOUNT ALSO SPECIFIES THAT SCHEDULES VI PART II SHALL NOT BE APPLICABLE TO ANY INSURANCE OR BANKING COMPANY. THEREFORE, IT HAS BEEN ARGUED THAT THE BASIC PREMISE OF APPLICABILITY OF SECTION 115JB DOES NOT STAND AND CONSEQUENTLY THIS SECTION DOES NOT APPLY TO APPELLANT COMPANY. MY ATTENTION HAS ALSO BEEN DRAWN TO THE DECISION OF HON'BLE MUMBAI ITAT IN THE CASE OF KRUNG THAI BANK PCL IN ITA NO.3390 OF 2009 WHERE IT HAS BEEN HELD MA NO.429 OF 2012 G.I.C. OF INDIA LTD MUMBAI PAGE 3 OF 5 THAT PROVISIONS OF SECTION 115JB CAN COME INTO PLAY ONLY WHEN ASSESSEE IS REQUIRED TO PREPARE ITS ACCOUNTS IN ACCORDANCE WITH PART II AND PART III OF SCHEDULE VI OF THE COMPANIES ACT. 15.3 I HAVE PERUSED THE FACTS OF THE CASE. I FIND THAT HON'BLE TRIBUNAL HAVE GIVEN A CATEGORICAL FINDING THAT IF ACCOUNTS ARE NOT REQUIRED TO BE PREPARED UNDER PART II AND PART III OF SCHEDULE VI OF THE COMPANIES ACT, SECTION 115JB CANNOT BE INVOKED. A SIMILAR DECISION WAS DELIVERED IN THE CASE OF MAHARASHTRA STATE ELECTRICITY BOARD (82 ITD 422) AND IN THE UNREPORTED DECISION OF RELIANCE ENERGY LTD. THE ISSUE INVOLVED IS IDENTICAL AND THEREFORE, THE RATIO LAID DOWN BY HON'BLE ITAT HAS TO BE FOLLOWED. IT IS THEREFORE HELD THAT SECTION 115JB CANNOT BE INVOKED IN THE CASE OF APPELLANT. HOWEVER, IT IS NOTICED THAT IN THE RETURN OF INCOME APPELLANT HAD ON ITS OWN OFFERED INCOME UNDER PROVISIONS OF SECTION 115JB OF THE INCOME TAX ACT TO THE EXTENT OF ` 15,13,60,66,509/-. TO THIS EXTENT, APPELLANT CANNOT BE GRANTED RELIEF SINCE ASSESSED INCOME CANNOT BE BELOW THE RETURNED INCOME. RELIANCE IS PLACED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD REPORTED IN 284 ITR 323. TO THE EXTENT OF THIS DECLARED INCOME THEREFORE, RELIEF CANNOT BE GRANTED. HOWEVER, ANY FURTHER ADDITIONS TO THIS INCOME CANNOT BE UPHELD. THE ADDITIONAL GROUND OF APPEAL IS DECIDED ACCORDINGLY. (EMPHASIS PROVIDED) EVEN THOUGH THERE WAS A FINDING THAT PROVISIONS OF SECTION 115JB CANNOT BE INVOKED IN THE CASE OF THE ASSESSEE , THE FINDING OF WHICH WAS NOT CONTESTED BY THE REVENUE S INCE THERE IS NO CROSS APPEAL, THE ASSESSEES CONTENTION WAS THAT HAVING GIVEN A FINDING THAT PROVISIONS OF SECTION 1 15JB ARE NOT APPLICABLE, THE CIT (A) IS BOUND TO ALLOW THE G ROUND AND CANNOT REJECT THE ADDITIONAL GROUND BASED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD REPORTED IN 284 ITR 323. 11. IT WAS SUBMITTED BY THE LEARNED COUNSEL THAT TH E ISSUE OF NON APPLICABILITY OF 115JB WAS DECIDED BY THE COORDINATE BENCH IN THE CASE OF KRUNG THAI BANK PCL VS. JT DIT IN ITA NO.3390 OF 2009. IT WAS FURTHER SUBMITTE D THAT THE CIT (A) IS BOUND TO GRANT RELIEF FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL T HERMAL MA NO.429 OF 2012 G.I.C. OF INDIA LTD MUMBAI PAGE 4 OF 5 POWER CORPORATION VS. CIT 229 ITR 383 FOLLOWED BY T HE HON'BLE BOMBAY HIGH COURT JUDGMENT IN THE CASE OF S ET SATELLITE (SINGAPORE) PTE LTD VS.DDIT 307 ITR 205. IT WAS ALSO SUBMITTED THAT THE COORDINATE BENCH IN THE CAS E OF CHICAGO PNEUMATIC INDIA LIMITED (15 SOT 252) ALSO CONSIDERED THAT ASSESSING OFFICER IS BOUND TO ASSES S THE CORRECT INCOME AND HE MAY GRANT RELIEF/REFUNDS SUO MOTTO AND CAN DO SO ON BEING POINTED OUT BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR WHICH THE ASSE SSEE HAS NOT FILED REVISED RETURN. ON THE PRINCIPLES LAI D DOWN IN THE ABOVE CASES, IT WAS SUBMITTED THAT THE CIT (A) ERRED IN NOT GRANTING THE RELIEF AND REQUESTED FOR GRANTING RELIEF FROM APPLICATION OF PROVISIONS OF SECTION 115JB. THE LEA RNED DEPARTMENTAL REPRESENTATIVE HOWEVER, RELIED ON THE ORDERS OF THE CIT (A) AND SUBMITTED THAT THE ASSESSEE CANN OT CLAIM EXEMPTION HAVING ADMITTED THE INCOME AND RELIED ON THE ORDER OF THE CIT (A). 3. AS CAN BE SEEN FROM THE ABOVE, THERE IS A CLEAR MENTION THAT THERE IS NO NEED TO ADJUDICATE THE ISSUE, SINCE THE RE IS NO CHALLENGE TO THE CIT (A) FINDING THAT THE PROVISIONS OF SECTI ON 115JB ARE NOT APPLICABLE TO ASSESSEE. HAVING HELD THAT PROVISIONS ARE NOT APPLICABLE, THE LEARNED CIT (A) DID NOT ALLOW THE G ROUND ON THE REASON THAT ASSESSEE DID ADMIT INCOME UNDER SECTION 115JB. THIS ISSUE ONLY WAS CONTESTED BY ASSESSEE IN THE GROUND AND FOLLOWING THE PRINCIPLES LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF SET SATELLITE (SINGAPORE) PTE LTD VS. DDIT 307 I TR 205, AND COORDINATE BENCH DECISION IN THE CASE OF CHICAGO PN EUMATIC INDIA LIMITED (15 SOT 252), WHAT ITAT HAS DIRECTED IS ONL Y TO EXEMPT THE INCOME SINCE THE CIT (A) DID NOT ALLOW THE ULTIMATE CONCLUSION AFTER GIVING A FINDING THAT PROVISIONS OF SECTION 115JB A RE NOT APPLICABLE. SINCE THE ISSUE OF APPLICABILITY OF PROVISIONS OF S ECTION 115JB WAS NOT ADJUDICATED BY THE ITAT, THE PRESENT MA RAISED BY AO IS MISCONCEIVED. EVEN OTHERWISE, ONCE A DECISION WAS G IVEN ON AN ISSUE HOW THE SAME CAN BE REVIEWED UNDER THE PROVIS IONS OF SECTION 254(2) HAS NOT BEEN EXPLAINED AND THE ENTIRE CONTEN TION OF THE M.A IS FOR REVIEW OF THE ORDER WHICH CANNOT BE DONE UND ER THE PROVISIONS, AS DECIDED BY THE HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT V. RAMESH ELECTRIC AND TRADING CO. [1993] 203 ITR 497 (BOM). THEREFORE, THE M.A. IS REJECTED. MA NO.429 OF 2012 G.I.C. OF INDIA LTD MUMBAI PAGE 5 OF 5 4. BEFORE PARTING, WE WOULD LIKE TO PLACE ON RECOR D OUR UNHAPPINESS AGAINST AO FOR PREFERRING THIS SORT OF MISCONCEIVED APPLICATION. THE ORDER CLEARLY INDICATE THAT THE IS SUE OF SECTION 115JB HAS NOT BEEN ADJUDICATED AND ONLY A CONSEQUEN TIAL DIRECTION WAS GIVEN BASED ON THE CIT (A) ORDER, SINCE REVENUE HAS NOT CHALLENGED. THE PROPER COURSE COULD HAVE BEEN TO PR EFER AN APPEAL ON THE FINDINGS OF THE CIT (A) AND THEN AGITATE THE ISSUE IN A HIGHER FORUM. HAVING NOT DONE SO, THE REVENUE IS PRECLUDED IN AGITATING THE SAME IN M.A WHEN THE ISSUE WAS NOT EVEN ADJUDIC ATED. IN FACT, WE INTEND TO LEVY THE COST ON AO, BUT WE REFRAINED IN DOING SO. WE ALSO ASKED THE DR WHETHER THE LEARNED CIT APPROVED THE FILING OF M.A, AS APPROVAL WAS NOT PLACED ON RECORD. IF THE F ILING OF THIS APPLICATION WAS APPROVED BY THE LEARNED CIT IT IS A LL THE MORE REGRETFUL THAT A SENIOR OFFICER APPROVED THE ACTION OF AO WITHOUT ANY APPLICATION OF MIND. WITH THESE REMARKS, THE M.A. I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2013. SD/- SD/- ( VIVEK VARMA ) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 15 TH MARCH, 2013. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI