Thiagarajar Mills (P) Limited, Madurai V. JCT, Madurai

MA 43/CHNY/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3167 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-08-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 18-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 14A; 254(2); 113; 43; 153

Judgement Text

आयकर अपीलीय अिधकरण, ‘डी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI ी महावीर सह, उपा य एवं ी मनोज कुमार अ वाल, लेखा सद य के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER M.A Nos.42, 43, & 44/Chny/2020 (Arising out of ITA Nos.1202, 1203 & 1204/Chny/2015) िनधा रण वष /Assessment Year: 2009-10, 2010-11 & 2011-12 M/s. Thiagarajar Mills (P.) Ltd., GST Road, Kappalur, Madurai – 625 008. [PAN: AAACT-4304-R] Vs. The Joint Commissioner Income Tax, Company Circle-1, Madurai. ( अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Shri S. Sridhar, Advocate यथ क ओर से /Respondent by : Shri Hema Bhupal, JCIT सुनवाई क तारीख/Date of Hearing : 19.08.2022 घोषणा क तारीख /Date of Pronouncement : 19.08.2022 आदेश / O R D E R Per Mahavir Singh, Vice President : By way of these three Miscellaneous Applications, the assessee has requested for recalling of the Tribunal’s order passed in ITA Nos.1202, 1203 & 1204/Chny/2015 vide order dated 29.11.2019. 2. At the time of hearing, the Ld. counsel for the assessee Shri S. Sridhar, Advocate cited Tribunal decision in the case of Dilip Kumar Chatterjee Vs. ACIT 173 ITD 41 (Cut.) and stated that this was stated before the Bench during the course of hearing, but not considered. He MA Nos.42, 43 & 44/Chny/2020 :- 2 -: stated that even the decision of Hon’ble Delhi High Court in the case of Valvoline Ltd. Vs. DCIT 297 ITR 103 (Del.) was cited at the instance of the Bench, but none of the decision was considered and hence, this rectification. The Ld. counsel stated that the three appeals have two common issues involved as under: a. Foreign Exchange loss incurred on Forward Contracts entered into with Banks to hedge against the fluctuations in the value of Foreign Currency. b. Disallowance under section 14A of the Income-tax Act, 1961. 3. He stated that as regards to first issue, the decision of Coordinate Bench in the case of SCM Garments (P) Ltd. Vs. DCIT 68 SOT 3977 (Chennai) was cited and in regard to second issue, the decision of Hon’ble Gujarat High Court in the case of PCIT Vs. Sintex Industries Ltd. [2017] 82 taxmann.com 171 (Guj.) was cited, but not considered. According to Ld. counsel for the assessee, the non consideration of Tribunal decision and decision of other High Courts constitute mistake apparent from record. Hence, according to Ld. counsel, the order of Tribunal suffers from mistake apparent from record. 4. On the other hand, the Ld. Sr. D.R relied on the Tribunal’s order and stated that there is no mistake apparent from record because these decisions are non jurisdictional High Court and the Tribunal has MA Nos.42, 43 & 44/Chny/2020 :- 3 -: taken independent view and now the assessee in the grab of this rectification application want review of the order. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. The only grounds of the assessee is that the non jurisdictional High Court i.e., the decision of Hon’ble Delhi High Court in the case of Valvoline Ltd. Vs. DCIT, supra, and the decision of Hon’ble Gujarat High Court in the case of PCIT Vs. Sintex Industries Ltd., supra, was not considered and even the Tribunal decisions in the cases of SCM Garments (P) Ltd. Vs. DCIT, supra, and Dilip Kumar Chatterjee Vs. ACIT, supra, are not considered whether this constitute mistake apparent from the record u/s. 254(2) of the Act. 6. The only dispute is that the Tribunal has not considered a non jurisdictional decision and the Tribunal decision in some other cases as noted above. The assessee on facts could not controvert the decision of the Tribunal in the present case and could not point out what is mistake apparent from the record. Merely, not considering non jurisdictional High Court decision cannot be called a mistake apparent from the record for the reason that the Tribunal is not bound to follow the decision of a non jurisdictional High Court decision and this MA Nos.42, 43 & 44/Chny/2020 :- 4 -: preposition is settled by Hon’ble Delhi High Court in the case of Taylor Instrument Co. (India) Ltd. v. CIT [1998] 232 ITR 771 & 774 (Del.), the Hon’ble Delhi High Court has considered the issue of binding precedent and held as under: “The territorial jurisdiction of the Income-tax Appellate Tribunal extends over several States though each such State has its own High Court. There is unanimity of opinion amongst different High Courts that decisions of the High Court are binding on the subordinate courts, authorities and Tribunal situated within its jurisdictional territory and its power of superintendence extends throughout the territory in relation to which it exercises jurisdiction. The binding authority of a High Court does not extend beyond its territorial jurisdiction. The decision of one High Court is not a binding precedent for another High Court or for courts or Tribunals outside the territorial jurisdiction of the High Court to which they are subordinate. (See CIT v. Thana Electricity Supply Ltd. [1994] 206 ITR 727 (Bom); CIT v. Ved Parkash [1989] 178 ITR 332 (P&H); State of A. P. v. CTO [1988] 169 ITR 564 (AP); CIT v. Mohan Lal Kansal [1978] 114 ITR 583 (P & H) and Raja Benoy Kumar Sahas Roy v. CIT [1953] 24 ITR 70 (Cal)). In the case of CIT v. Thana Electricity Supply Ltd. [1994] 206 ITR 727, the Division Bench of the Bombay High Court has held (headnote) : "A conjoint reading of sections 257 and 260 of the Income-tax Act, 1961, shows that the Act itself contemplates independent decisions of various High Courts on the question of law referred to them. It has visualised the possibility of conflict of opinion between different High Courts on the same question of law and has also made specific provision to take care of such a situation in suitable cases. In fact, in the light of the clear language of section 260 of the Act, every High Court is required to give its own opinion on a particular question of law. It should not follow, as a matter of course, only with a view to achieve uniformity in the matter of interpretation, the decision of another High Court, if such decision is contrary to its own opinion. Such action will be contrary to the clear mandate of section 260 of the Act. It will amount to abdication of its duty by the High Court to give its decision' on the point of law referred to it." In CIT v. Ved Parkash [1989] 178 ITR 332, a Division Bench of the Punjab and Haryana High Court has held (headnote): “. . . as the decision of a High Court is binding only upon the authorities, Tribunals and courts functioning within its territorial jurisdiction, no Tribunal beyond such jurisdiction can treat or hold as MA Nos.42, 43 & 44/Chny/2020 :- 5 -: constitutionally invalid any provision of the Income-tax Act solely for the reason that the High Court of another State may have declared the said provision to be ultra vires. To grant such a power to the Tribunal or even to a High Court, in a reference under section 256 of the Income-tax Act, would again amount to conferring jurisdiction upon them to pronounce upon the constitutional validity of the provisions of the statute creating them, which would clearly be contrary to the well-settled position in law. unless and until the Supreme Court or the High Court the State in question, under article 226 of the Constitution, declares provision of the Act to be ultra vires, it must be taken to be constitutionally valid and treated as such." The abovesaid view of the law has been followed by a Division Bench of this court in a recent judgment in the case of Suresh Desai and Associates v. CIT [1998] 230 ITR 912 (ITC No. 153 of 1993 decided on September 5, (1997) and also finds support from a Division Bench decision this court in Seth Banarsi Dass Gupta v. CIT [1978] 113 ITR 817 (Delhi). In short merely because the provisions of section 140A(3) have been held to be ultra vires the Constitution by the High Court of Madras, the Tribunal deciding the case arising out of an assessment made by an incometax authority situated within the jurisdiction of the Delhi High Court could not have proceeded on the assumption that the said provision was ultra vires the Constitution. Doing so would be tantamount to the Tribunal declaring the provision to be ultra vires the Constitution for the purpose of assessments lying within the jurisdiction of the authorities situated within the territory of the Delhi High Court. This is precisely not permissible. It is well settled that the Tribunal and the tax authorities being creatures of the Income-tax Act, 1961, cannot pronounce upon the constitutional validity or vires of any provision of the Act. Therefore, such question cannot arise out of the order of the Tribunal and cannot made the subject-matter of a reference to the High Court and subsequent appeal to the Supreme Court (see K. S. Venkataraman and Co. Pvt. Ltd. Shyamsunder v. STO [1966] 60 ITR 260 (SC) and Senthilnathan Chettiar (C.T.) v. State of Madras [1968] 67 ITr 102 (SC)). For the foregoing reasons, it is held that the Tribunal was justified in law in sustaining the penalty despite the provisions of section 140A(3) having been held by the High Court of Madras to be ultra vires the Constitution. The question is answered in favour of the Revenue and against the assessee. No order as to costs.” 7. Hence, as the assessee in the given facts of the case could not point out any mistake apparent from the record in the order of the Tribunal and merely not considered the non jurisdictional High Court MA Nos.42, 43 & 44/Chny/2020 :- 6 -: decision will not tantamount to mistake apparent from the record. Hence, we dismiss these three Miscellaneous Applications. 8. In the result, all the three Miscellaneous Applications of the assessee are dismissed. Order pronounced in the Open Court on 19 th August, 2022. Sd/- Sd/- (मनोज मनोजमनोज मनोज कुमार कुमारकुमार कुमार अ वाल अ वालअ वाल अ वाल) (Manoj Kumar Aggarwal) लेखा लेखालेखा लेखा सद य सद यसद य सद य /Accountant Member (महावीर िसंह) (Mahavir Singh) उपा / Vice President चे ई/Chennai, दनांक/Dated: 19 th August, 2022. EDN/- आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF