Kamarhatty Company Ltd., Kolkata V. DCIT, Circle - 1, Kolkata, Kolkata

MA 65/KOL/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7556 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 11-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Opportunity of being heard
• Section: 43B

Judgement Text

, D , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA ( ) . . , , , ) [BEFORE SRI S.V. MEHROTRA, A.M. & SRI MAHAVIR SIN GH, J.M.] M.A. NOS. 65 & 66/KOL./2011 ( / IN I.T.A NOS. 1762 & 1763/KOL/2007) ASSESSMENT YEARS : 2003-2004 & 2004-2005 KAMARHATTY COMPANY LIMITED, KOLKATA -VS.- DEPUTY COMMISSIONER OF INCOME TAX, (PAN : AABCK 2916 K) CIRCLE-1, KOL KATA ( APPLICANT ) ( RESPONDENT ) FOR THE APPLICANT : SHRI S.K. TULSIYAN, A.R. FOR THE RESPONDENT : SHRI R.K. SAHA, D.R. ! ' $ ! ' $ ! ' $ ! ' $ % % % % /DATE OF HEARING : 06.01.2012 &' $ % &' $ % &' $ % &' $ % /DATE OF PRONOUNCEMENT : 06.01.2012 ( / ORDER PER SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER/ . . , :- THE ASSESSEE HAS FILED THESE TWO MISCELLANEOUS APP LICATIONS UNDER SECTION 254(2) OF THE ACT FOR AMENDMENT/ ORDER IN RESPECT OF CERTAIN MISTAKES ALLEGEDLY HAVING BEEN CREPT IN THE ORDER OF TRIBUNAL DATED 23.11.2007. 2. BRIEF FACTS AS EMANATING FROM THE MISCELLANEOUS APPLICATIONS ARE THAT THE ADDITIONS MADE BY ASSESSING OFFICER AND CONFIRMED BY LD. CIT( APPEALS) OF RS.80,86,689/- AND 23,90,259/-, ON ACCOUNT OF PAYMENTS BY THE ASSESSEE OF THE EMPLOYEES CONTRIBUTION TO P.F. AND E.S.I., WERE RESTORED BY TRIBUNAL TO THE FILE OF AS SESSING OFFICER WITH SPECIFIC DIRECTIONS TO EXAMINE WHETHER PAYMENT WAS MADE WITHIN GRACE PERIO D OR NOT IN TERMS OF THE DECISION OF HONBLE SPECIAL BENCH OF ITAT, KOLKATA IN THE CASE OF JCIT VS.- ITC LIMITED VIDE ORDER DATED 07.09.2007 IN ITA NO. 1541/CAL/2000. THE ASSE SSEE IN PARA 2 OF ITS MISCELLANEOUS APPLICATIONS HAS POINTED OUT THAT THE ISSUE BEING T HE TIME LIMIT WITHIN WHICH THE EMPLOYEES CONTRIBUTION TO P.F. AND ESI IS TO BE PAID BY THE A SSESSEE-EMPLOYER, IN ORDER TO MAKE IT ELIGIBLE FOR DEDUCTION OF THE SAME UNDER SECTION 36(1)(VA) O F THE ACT, STOOD ALREADY DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF VINAY CEMENT L IMITED DECIDED ON 07.03.2007 REPORTED IN [2007] 213 CTR 268. THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF THE HONBLE GAUHATI M.A. NOS. 65 & 66-KOL.-2011 (ITA NOS.1762 & 1763/KO L./2007) 2 HIGH COURT IN THE CASE OF CIT VS.- GEORGE WILLIAMS ON REPORTED IN 284 ITR 619 (GAU.). IT IS FURTHER STATED THAT THE DECISION DATED 07.03.2007 O F THE HONBLE SUPREME COURT IN THE CASE OF VINAY CEMENT LIMITED HAS BEEN FOLLOWED BY VARIOUS C OURTS IN ARRIVING AT THEIR DECISIONS IN THE FOLLOWING CASES :- (I) CIT VS.- DHARMENDRA SHARMA [297 ITR 320 (DEL .)]; (II) CIT VS.- P.M. ELECTRONICS LIMITED [313 ITR 161 (DEL.)]; (III) CIT VS.- AIMIL LIMITED [321 ITR 508 (DEL.) ]; (IV) ACIT VS.- SAURASHTRA KUTCH STOCK EXCHANGE L IMITED [305 ITR 227 (SC)]; (V) CIT VS.- V.L.S. FINANCE LIMITED [310 ITR 224 . THUS, IT IS SUBMITTED THAT SINCE THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF VINAY CEMENT LIMITED WAS PASSED ON 07.03.2007 AND TRIBUNA L PASSED THE ORDER ON 23.11.2007, A MISTAKE HAS CREPT IN THE ORDER OF TRIBUNAL WHICH RE QUIRES RECTIFICATION. IN SUPPORT OF HIS CONTENTION, THE ASSESSEE HAS, INTER ALIA, RELIED ON THE FOLLOWING CASE LAWS :- (I) CIT VS.- SAURASHTRA KUTCH STOCK EXCHANGE LIMITED [ 305 ITR 227 (SC)]; (II) CIT VS.- VLS FINANCE LIMITED [310 ITR 224 (DEL.)]; (III) CIT VS.- ALOM EXTRUSIONS LIMITED [319 ITR 306 (SC) ]; (IV) ALLIED MOTORS (P) LTD. VS.- CIT [224 ITR 677 (SC)] ; (V) DCIT VS.- UNIVERSAL CAPSULE P. LTD. [ITA NO. 3793/ MUM./2005]; (VI) HONDA SIEL POWER PRODUCT LTD. VS.- CIT [295 ITR 46 6 (SC)]; (VII) M/S. MEPCO INDUSTRIES LTD. VS.- CIT (CIVIL APPEAL NO. 7622-7633 OF 2009, ORDER DATED 19.11.2009); (VIII) JCIT VS.- ITC LIMITED (ITA NO. 1541/CAL./2000)(KOL . SPECIAL BENCH); (IX) CIT VS.- M/SS. VIJAY SHREE LIMITED (ITA NO. 245 OF 2011 (KOL. HIGH COURT). 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. IT IS WELL SETTLED LAW THAT IF A DECISION OF ANY SUBORDINATE COURT IS IN VARIANCE WITH THE LAW LAID DOWN BY THE HONBLE SUPREME COURT, THEN, I RRESPECTIVE OF THE FACT THAT THE DECISION OF THE HONBLE SUPREME COURT WAS RENDERED SUBSEQUENT T O THE PASSING OF TRIBUNAL ORDER, THE ORDER OF TRIBUNAL IS TO BE RECTIFIED IN CONSONANCE WITH THE DECISION OF HONBLE SUPREME COURT. HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS.- SAURASHTRA KUTCH STOCK EXCHANGE (2003) 262 ITR 146 HAS OBSERVED AT PAGES 160-161 AS UNDER :- M.A. NOS. 65 & 66-KOL.-2011 (ITA NOS.1762 & 1763/KO L./2007) 3 WHETHER THE JUDGMENT OF THE JURISDICTIONAL COURT W OULD CONSTITUTE A MISTAKE APPARENT FROM THE RECORD OR NOT IS NO LONGER RES IN TEGRA. IN THE CASE OF PARSHURAM POTTERY WORKS CO. LTD. VS. D.R. TRIVEDI, WTO (1975) 100 ITR651 (GUJ.), THE FACTS BEFORE THE COURT WERE THAT THE PE TITIONER COMPANY CLAIMED DEDUCTION OF CERTAIN AMOUNT IN RESPECT OF THE PROVI SION FOR TAXATION WHILE COMPUTING ITS NET WEALTH. THE SAID CLAIM WAS DISALL OWED BY THE ASSESSING OFFICER AS ACCORDING TO HIM HE PROVISION FOR TAX LI ABILITY DID NOT CONSTITUTE A DEBT OWED ON THE VALUATION DATE. THOUGH THE SAID A SSESSMENT WAS NOT CHALLENGED BY WAY OF APPEAL, WHEN THE PETITIONER CA ME TO KNOW SUBSEQUENTLY ABOUT A DECISION OF THE TRIBUNAL ALLOWING SUCH A CL AIM IN SOME OTHER CASE, THE PETITIONER APPLIED TO THE ASSESSING OFFICER FOR REC TIFYING THE ASSESSMENT ORDER UNDER SECTION 35 OF THE WEALTH-TAX ACT, 1957. THE S AID APPLICATION CAME TO BE REJECTED ON THE GROUND THAT THERE WAS NO MISTAKE AP PARENT ON THE FACE OF THE RECORD. THE PETITIONER FILED A REVISION APPLICATION BEFORE THE COMMISSIONER OF WEALTH-TAX BUT DID NOT SUCCEED. THEREUPON THE PETIT IONER APPLIED TO THE HIGH COURT FOR EXERCISING WRIT JURISDICTION TO QUASH THE ORDER AND FOR A DIRECTION TO RECTIFY THE ASSESSMENT ORDER. THE HIGH COURT AFTER REFERRING TO THE EARLIER DECISION OF THIS COURT IN THE CASE OF CWT V. RAIPUR MANUFACTURING CO. LTD. [1964] 52 ITR 482 AND OF THE SUPREME COURT IN THE C ASE OF KESORAM INDUSTRIES AND COTTON MILLS LTD. VS.- CWT [1966] 59 ITR 767, HELD THAT THE PROVISION FOR TAXATION WAS A DEBT OWED WAS DEDUCTIBLE WHILE COM PUTING THE NET WEALTH OF THE ASSESSEE. THEREFORE, THE HIGH COURT HELD THAT T HERE WAS CLEARLY AN ERROR OF LAW APPARENT ON THE FACE OF THE RECORD AND THE ASSE SSMENT ORDER WAS ERRONEOUS. REPELLING THE CONTENTION OF THE REVENUE THAT THE AF ORESAID JUDICIAL PRONOUNCEMENTS WERE SUBSEQUENT TO THE DATE OF THE A SSESSMENT ORDER IT IS LAID DOWN THAT THE SAID DECISIONS MERELY STATED WHAT THE LAW HAD ALWAYS BEEN AND MUST ALWAYS BE UNDERSTOOD TO HAVE BEEN. THE FACT TH AT THE SAID DECISIONS WERE NOT BEFORE THE ASSESSING OFFICER WHEN HE MADE THE A SSESSMENT ORDER HAD NO MATERIAL BEARING ON THE QUESTION WHETHER THE SAID O RDER DISCLOSES ANY MISTAKE APPARENT FROM THE RECORD AND WAS LIABLE TO BE RECTI FIED UNDER SECTION 35 OF THE WEALTH-TAX ACT, 1957. IT WAS FURTHER HELD THAT THE DECISION IN THE CASE OF RAIPUR MANUFACTURING CO. LTD. [1964] 52 ITR (GUJ), HAD BEE N BROUGHT TO THE ATTENTION OF THE COMMISSIONER DURING THE COURSE OF HEARING OF THE REVISION PETITION AND AS HE FAILED TO APPLY THE SAID DECISION THERE WAS AN E RROR OF LAW APPARENT ON THE FACE OF THE RECORD. THAT NON-PREFERRING OF APPEAL A GAINST THE ASSESSMENT COULD NOT DISENTITLE THE ASSESSEE TO SEEK RECTIFICATION O NCE A PATENT ERROR OF LAW APPEARED ON THE FACE OF THE RECORD. THE AFORESAID PRINCIPLE HAS BEEN REITERATED BY THIS COURT IN THE CASE OF SUHRID GEIGY LTD. V. COMMISSIONER OF SURTAX [1999] 237 ITR 834, WHEREIN ONE OF US (MR. JUSTICE A. R. DAVE), WAS A PARTY TO THE DECISION. IT IS LAID DOWN IN THE SAID DECISION THAT (HEADNOTE) : SECTION 13 OF THE COMPANIES (PROFITS) SURTAX ACT, 1964, PROVIDES FOR RECTIFICATION OF MISTAKE APPARENT FROM THE RECORD. A POINT WHICH IS DEBATABLE CANNOT BE TERMED A MISTA KE. BUT WHEN THE POINT IS COVERED BY A DECISION OF THE SUPR EME COURT OR CONCERNED HIGH COURT, EITHER RENDERED PRIOR TO O R SUBSEQUENT TO THE ORDER PROPOSED TO BE RECTIFIED, T HEN THE POINT M.A. NOS. 65 & 66-KOL.-2011 (ITA NOS.1762 & 1763/KO L./2007) 4 CEASES TO BE A DEBATABLE POINT AND IT ALSO CEASES T O BE A POINT REQUIRING ELABORATE ARGUMENTS OR DETAILED INVESTIGA TION/ INQUIRY. THE SUBSEQUENT DECISIONS OF THE JURISDICTI ONAL HIGH COURT DO NOT ENACT THE LAW BUT DECLARE THE LAW AS I T ALWAYS WAS. HENCE, IT IS WELL SETTLED THAT A DECISION OF THE JU RISDICTIONAL HIGH COURT, EVEN IF RENDERED SUBSEQUENTLY, WOULD CONSTITUTE A MISTAKE A PPARENT FROM THE RECORD INVESTING AN AUTHORITY WITH JURISDICTION TO RECTIFY THE MISTAKE. THE AFORESAID DECISION HAS BEEN AFFIRMED BY HONBLE SUPREME COURT IN THE CASE OF ACIT VS.- SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 305 ITR 227. ADMITTEDLY, THE PRESENT ISSUE IS COVERED BY THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF CIT VS.- VINAY CEMENT LTD.(SUPRA). FURTHER, WE FIND THAT THIS ISSUE HAS R ECENTLY BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT DATED 06.09.2011 IN THE C ASE OF CIT VS.- VIJAY SHREE LIMITED IN ITAT NO. 245 OF 2011 & G.A. NO. 2607 OF 2011, WHERE IN IT HAS BEEN HELD AS UNDER :- THE ONLY ISSUE INVOLVED IN THIS APPEAL IS AS TO WH ETHER THE DELETION OF THE ADDITION BY THE ASSESSING OFFICER ON ACCOUNT OF EMP LOYEES CONTRIBUTION TO ESI AND PF BY INVOKING THE PROVISION OF SECTION 36(1)(V A) READ WITH SECTION 2(24)(X) OF THE ACT WAS CORRECT OR NOT. 2. IT APPEARS THAT THE TRIBUNAL BELOW, IN VIEW OF T HE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS.- ALOM EXTRUSION LTD., REPORTED IN 2009 VOL. 290 ITR 306, HELD THAT THE DELETION WAS JUSTIFIED. BEING DISSATISFIED, THE REVENUE HAS COME UP WITH THE PRESENT APPEAL. AFTER HEARING MR. SINGH, LEARNED ADVOCATE, APPEARIN G ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF T HE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS.- ALOM EXTRUSION LTD., WE FIND THAT THE SUPREME COURT IN THE AFORESAID CASE HAS HELD THAT T HE AMENDMENT TO THE SECOND PROVISO TO THE SEC. 43(B) OF THE INCOME TAX ACT, AS INTRODUCED BY FINANCE ACT, 2003, WAS CURATIVE IN NATURE AND IS REQUIRED TO BE APPLIED RETROSPECTIVELY WITH EFFECT FROM 1 ST APRIL, 1988. SUCH BEING THE POSITION, THE DELETION OF THE AMOUNT PAID BY THE EMPLOYEES CONTRIBUTION BEYOND DUE DATE WAS DEDUCTIBLE BY INVOKING THE AFORESAID AMENDED PROVISIONS OF SECTIO N 43(B) OF THE ACT. 4. WE, THEREFORE, MODIFY TRIBUNALS ORDER DATED 23. 11.2007 IN PARA 14 AS UNDER :- 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THIS ISSUE IS COVERED BY TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS.- VINAY CEMENT LIMITED [2007] 213 CTR 268 WHEREIN IT HAS BEEN HELD AS UNDER :- M.A. NOS. 65 & 66-KOL.-2011 (ITA NOS.1762 & 1763/KO L./2007) 5 IN THE PRESENT CASE, WE ARE CONCERNED WITH THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 43B. IN THE CIRCU MSTANCES, THE ASSESSEE WAS ENTITLED TO CLAIM THE BENEFIT IN SECTI ON 43B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT HE HAS CONTRIBUTED TO PROVIDENT FUND BEFORE FILING OF THE RETURN. FURTHER, WE FIND THAT THIS ISSUE HAS RECENTLY BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS.- VIJAY SHREE LIMITED IN ITAT NO. 245 OF 2011 & G.A. NO. 2607 OF 2011, WHERE IN IT HAS BEEN HELD AS UNDER :- THE ONLY ISSUE INVOLVED IN THIS APPEAL IS AS TO WH ETHER THE DELETION OF THE ADDITION BY THE ASSESSING OFFICER O N ACCOUNT OF EMPLOYEES CONTRIBUTION TO ESI AND PF BY INVOKING T HE PROVISION OF SECTION 36(1)(VA) READ WITH SECTION 2( 24)(X) OF THE ACT WAS CORRECT OR NOT. 2. IT APPEARS THAT THE TRIBUNAL BELOW, IN VIEW OF T HE DECISION OF THE SUPREME COURT IN THE CASE OF COMMIS SIONER OF INCOME TAX VS.- ALOM EXTRUSION LTD., REPORTED IN 2 009 VOL. 290 ITR 306, HELD THAT THE DELETION WAS JUSTIFIED. BEING DISSATISFIED, THE REVENUE HAS COME UP WITH THE PRES ENT APPEAL. AFTER HEARING MR. SINGH, LEARNED ADVOCATE, APPEARIN G ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF IN COME TAX VS.- ALOM EXTRUSION LTD., WE FIND THAT THE SUPREME COURT IN THE AFORESAID CASE HAS HELD THAT THE AMENDMENT TO T HE SECOND PROVISO TO THE SEC. 43(B) OF THE INCOME TAX ACT, AS INTRODUCED BY FINANCE ACT, 2003, WAS CURATIVE IN NATURE AND IS REQUIRED TO BE APPLIED RETROSPECTIVELY WITH EFFECT FROM 1 ST APRIL, 1988. SUCH BEING THE POSITION, THE DELETION OF THE AMOUNT PAID BY THE EMPLOYEES CONTRIBUTION BEYOND DUE DATE WAS DEDUCTI BLE BY INVOKING THE AFORESAID AMENDED PROVISIONS OF SECTIO N 43(B) OF THE ACT. 15. COMING TO THE FACTS OF THE PRESENT CASE, WE FIN D THAT IT HAS BEEN CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT PAYMENTS IN RESPECT OF EMPLOYEES CONTRIBUTION TOWARDS P.F. AND E.S.I. HAV E BEEN MADE BEFORE THE DUE DATE OF FILING OF THE RETURN. IN VIEW OF TH E DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF VINAY CEMENT LTD. (SUP RA) AND HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY SHRE E LTD. (SUPRA), WE DEEM M.A. NOS. 65 & 66-KOL.-2011 (ITA NOS.1762 & 1763/KO L./2007) 6 IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO FIND OUT WHETHER THE PAYMENTS HAVE BEEN MADE BEFORE THE DUE DATE OF FILING OF RETURN OR NOT. NEEDLESS TO SAY THAT ASSESSING OFFIC ER WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE.ACCORDIN GLY, GROUNDS NO. 2, 3 & 4 OF THE ASSESSEES APPEAL ARE DEEMED TO BE ALLOW ED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06/ 01 /2012. ) * ( 06/01/2012. SD/- SD/- [MAHAVIR SINGH / ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 06/ 01/ 2012 COPY OF THE ORDER FORWARDED TO: 1. M/S. KAMARHATTY COMPANY LIMITED, 16A, BRABOURNE ROA D, 8 TH FLOOR, KOLKATA-1 2 DCIT, CIRCLE-1, KOLKATA-1, 3. COMMISSIONER OF INCOME-TAX (APPEALS)- , KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.